After you’ve spent your hard-earned cash on an appliance or tech item that costs a pretty penny, do you still need to plunk down more money on an extended warranty for it? CNBC’s Sharon Epperson gives you the insight the next time you are asked at the register if you want the extended warranty.
You’ve saved! You’ve researched! And now you’re finally ready to buy that big ticket item. But do you really need to shell out more cash for an extended warranty?
Is it worth what could be hundreds of dollars just for your peace of mind? According to Consumer Reports the answer is almost always no. And here’s why!
Those warranty plans are moneymakers for the stores. They get to keep 50 percent or more of what they charge for those contracts. Meaning they’ll make more of a profit selling the warranty than they will on that refrigerator.
Plus, new products already come with a manufacturer’s warranty, which can last up to a year or more. The window on extended warranties is usually last up to five years and products rarely break within that timeframe.
So what should you do? Pay with a credit card that has its own extended warranty benefits if you use that card to make the purchase. Now each warranty program varies. And there could be some restrictions. So you want to make sure to read the fine print and hang on to your receipt.
Instead of spending extra money on a warranty. Save what you may need for future repairs. Create a separate account and sock away the hundreds that you would have spent on a warranty. That way if something does happen to the item the money will be there when you need it.