It is getting harder and harder to find a product that does not offer an extended warranty these days. It seems like every store now offers some sort warranty on some of their merchandises. For $3, $8, or $40, you can get an extra one, two, or more years warranty. And the pitch usually goes like this: “things usually break after the factory warranty runs out, with the extended warranty, you can bring it back and we’ll take care of you.” But, is it a good idea to spend extra money for the extended warranty?
What You Should Know Before Purchasing An Extended Warranty
Photo by S_Baker via Flickr.
Extended Warranties are Generating Huge Incomes for Stores
Extended warranties are very lucrative for the stores that offer them. For the store to make a profit, people must not make claims frequently. This means statistically you are not likely going to need the warranty.
Why do you think everyone now offers an extended warranty for everything but your toothbrush? Why do you think that many stores are requiring clerks to ask you about an extended warranty? Some car sales locations have been known to put a lot of extended warranty pressure on people.
Why? Because they are a significant source of highly profitable income.
Extended Warranties Require a Good Memory and Organization
I’ve purchased a lot of products that offer credit card purchase protection, but I don’t think I’ve ever made a claim. Want to know why? When something breaks, it is hard for me to think to check on my coverage. In addition, I often can’t find the necessary paper work. In the end, I just conclude that it is easier to go and buy a new item.
Here’s a good list on what paperwork to keep and what to get rid of.
To capitalize on an extended warranty, you need to be organized and keep all your records accessible. Most people are not that financially organized.
Most Products Already Have a Warranty
Many products come with a manufacturer’s warranty. Some already with a lifetime warranty. I’ve found that if you contact a company about a product even after the warranty is expired, they will often help repair or replace the product at a discount.
Even if a product does not have a warranty it is possible you can get a warranty …