Image Image Image Image Image Image Image Image Image Image
Scroll to top

Top

No Comments

Should You Splurge on a Warranty?

Should You Splurge on a Warranty?
Linsay Thomas

So you finally broke down and decided to buy the new Apple iPhone or that fancy sports car you have been eyeing. But as you get to the cashier or finance manager, you are asked that infamous question many of us dread hearing: Would you like to purchase the extended warranty?

You just spent hundreds or thousands of dollars and now they want you to spend even more? Of course! Warranties are cash cows for stores and car dealerships. They will pressure you in any possible way to get you to relent and agree to one. But is it worth it to purchase one or is it just a waste of money? Here are some things to consider.

Extra Cost

On top of the purchase price, a warranty can add another 10-20%. For a $500 laptop, this can mean an extra $100. That is not small change for a person with a low-paying job and a budget.

LimitationsWarranty2

Unfortunately, warranties do not cover everything. If you drop your laptop or hit a pothole and ruin the alignment on your car, your warranty likely will not cover the repairs. Nowadays, many car warranties even have different levels of coverage, making things even more complicated. Common issues are typically not covered, so read the fine print before making a decision.

Reliability

Many electronics, appliances and cars are exceptionally well-made nowadays, so splurging on a warranty that offers a few extra years of coverage may not even be worth it. If you do your research first and buy only top-of-the-line products, you will find that they rarely encounter any major problems, making a warranty unnecessary.

Replacement

Many consumers replace products often. Many cellphone contracts allow you to upgrade every year or two, so a warranty is not really necessary unless you handle your phone roughly or frequently drop it. The same goes for electronics. Most laptops come with a warranty of 2-3 years, so why go beyond that? Software and operating systems change so rapidly that you might be ready for a new laptop by then anyway. If you are a consumer who prefers to buy a new car every 3-4 years, then an extended warranty would be a waste for you as well. Consider this before purchasing.

Statistics Tell the StoryWarranty3

The truth is that if a product were to break or require a repair, it will happen within its original warranty period or later on when the extended warranty expires. If a repair is needed, the cost is typically not more than the cost of the warranty plan, so you are not saving anything by purchasing one. In some cases, the product breaks down due to a manufacturer defect. If this is the case, then the company will issue a recall and either fix your product or replace it for free.

Peace of Mind

Many people buy warranties because they offer peace of mind. Some people worry about what will happen if their car breaks down and they are stuck with a $3,000 repair bill. Not many consumers have that much extra money lying around to pay that bill. But that truth is that these types of issues are rare nowadays. Electronics and cars are becoming more and more sophisticated, making huge breakdowns a thing of the past. While many experts advise against buying a warranty, if it helps you sleep at night, then by all means get one. Just be wary of the price and offerings.

Featured Image Credit, Image 1 Credit, Image 2 Credit

Submit a Comment