Say ‘no thanks’ to extended warranties

You’re better off repairing or replacing the item yourself



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Purchase a new TV or computer these days and you’ll likely be offered an extended warranty that goes beyond that of the manufacturer. Don’t buy it.

Manufacturers and retailers know precisely how likely a product is to malfunction and they price warranties to yield a generous profit margin for themselves. You’re usually better off to pay for repairs or a replacement yourself.

Besides, if your new TV does break down three years after you buy it, how likely is it you’ll be able to find the receipt?

4 comments on “Say ‘no thanks’ to extended warranties

  1. Places like Sears offer store credit if you do not use the extended warranty and extra peace of mind makes it worth it. You will also be contacted when it is about to expire.


  2. Generally this is true, but if the device has a moving part – like a disc player, lawn mower, or snowblower, then it may be worth. Twice I've been able to take advantage of an extended warranty which, if I had not purchased, would have cost me much more to fix.

    It's basically a gamble – "you pays your money and you takes your chances."


  3. The warranties are priced to favor the seller. Which means on average, the seller of the insurance will have to pay out less then the overall claims. If you don't buy it, it will be ok in this case. Auto insurance is the same, however, it could be a good idea as one claim can take out all your savings if you didn't have insurance, even though they over charge on insurance fees. Here you are risking your lively hood for not buying insurance, where on Electronics, you risk a thousand or so bucks.


  4. If you can wrangle a deal, some vendors are willing to discount the product price the amount of the cost of the insurance. They do this because they get a better return on the insurance than on the product. Got my flat screen TV and related electronics that way, and they were already on sale.


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