On this blog we’ve addressed the topic of home warranties a couple of times, with the other post talking about the pros and cons of having one. We’ve never addressed warranties in general until now.

Mack Camera, A Good Place for a Camera Warranty
Thomas Hawk via Compfight

For those who aren’t familiar with the concept, a warranty, often called an extended warranty, offers you the opportunity to pay for some kind of extended protection on products you buy. It can be something as relative inexpensive as a $15 speaker or as expensive as a car. Sometimes you can get it directly through wherever you purchased your item while at other times you’ll have to pay for it independently.

I was part of an article on in-store warranties on a site called Fat Wallet, which no longer exists. I offered the opinion that for the most part extended warranties are a waste of your money. This is my exact quote from the now-lost article:

“I’d say that most extended warranties are a waste of time because you’re paying a lot of money for something that’s not worth it. Most appliances and other technology comes with a warranty already that’s pretty good for anywhere from six months to a year, which is when most things go bad if they’re going to go bad.

If there’s something you know nothing about, such as computers or laptops, it’s pretty much the same thing. I think once you get up into products that cost a lot and are hard to maneuver around, such as 50” or bigger flat screen TVs, or even cars once the normal warranty goes out, then it’s a good deal. But paying for a warranty on anything less than $300 just takes money out of your pocket needlessly.”

Former employees of many companies have even come out saying that they’re pushed to try to get people to pay for them because it’s an almost free source of revenue for them. Why, you may ask?

Think about it this way. How many items do you buy that break within the first year? For that matter how many items do you buy that go bad within the first three years?

When you buy almost anything it comes with at least a six month warranty, but most items come with a full year’s warranty. Most things you purchase are going to go bad within the first three months of use unless you rarely use the item, and thus the manufacturer’s warranty is enough to cover anything you might need.

It’s in extenuating situations where you have to think seriously about whether you should have an extended warranty or not. For instance, smartphones have a six month warranty unless you do something really stupid like dropping it in an ocean (a friend of mine did that). In this case, if you’d paid for an extended warranty your phone would have been covered. The biggest issue most people have with smartphones is forgetting where they are and getting them seriously drenched; this might be a reason to pay for an extended warranty… maybe…

The downside of paying for something like this, even with smartphones, is that a lot of these things quickly become obsolete. If you’re hoping to get a band new version of what you previously had you’re probably getting something old that’s been made to be like new. Not only that, but there’s still the possibly of an out of pocket amount that almost no one remembers hearing about when they signed up for the extended warranty.

With expensive items like cars, it’s something you might want to consider. If you’re driving between 25,000 and 30,000 miles a year you might want to look into an extended warranty, even if you’ve purchased a car that says you have maintenance covered for upwards of 100,000 miles. If you’ve read your maintenance agreement, you see that some things aren’t covered in full after around 60,000 miles. This means that if you’re putting significant mileage on your car it pays to have an extended warranty; if not, you’ll probably be good if something goes wrong (unless you don’t keep up regular maintenance; that’s a violation of the warranty).

Technology items other than smartphones are dicey. Usually the warranty that comes with an item is good enough, yet the cost of an item might make you change your mind.

For instance, desktop computers, laptops and tablets are items you’ll want to consider purchasing an extended warranty for if you don’t have the knowledge to take care of these things on your own. Too many people miss the memo telling them to not only load antivirus and firewalls but to keep them up to date. This leaves the above vulnerable to all sorts of nasty stuff that will either have someone loading things onto your computer or stealing files and passwords from it. Purchasing an extended warranty will help… even if you’re not doing regular maintenance on it. Just make sure you read it to verify that they can’t get out of the deal if you’re not maintaining it regularly.

You as a buyer always has to make the determination as to whether your money is being spent well. If you pay for a warranty on anything less than $100, I believe you’re throwing your money away. Over that amount… it all depends on your comfort level. Just don’t spend money needlessly if you’re the careful type.

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