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 something. It can be something as relative inexpensive as a cell phone and 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 Fat Wallet and I offered the opinion that for the most part extended warranties are a waste of your money. 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. Even smartphones, some of which are pretty expensive, have a six month warranty unless you do something stupid like drop it in the ocean (a friend of mine did that), and that wouldn’t be covered under a regular warranty anyway.

It’s in those situations where you have to think seriously about whether you should have an extended warranty or not. With smartphones, you can pay for an extended warranty that covers things like getting your phone wet. The downside of that is that smartphones become obsolete very fast, so if you get a copy of what you previously had it’s probably going to be a refurbished model, which never works as good as new (no matter what any of them say) or you’re going to have to deal with something totally different, and there’s still the possibly of an out of pocket amount, usually around $50, to replace it.

With things like cars, if you’re driving between 25,000 and 30,000 miles a year you might want to look into an extended warranty because at around 60,000 miles or so, depending on dealer, some things aren’t covered by the dealer anymore unless you have an extended warranty, but for most driver who average 10,000 miles or less a year, you’re pretty safe with what comes with the car when you purchase it.

Items like computers are dicey. If you have any knowledge whatsoever you’re never going to pay for an extended warranty. If you have a friend with some knowledge they’re going to talk you out of it as well. But for everyone else… since most people on their own never think about adding either virus protection or firewalls, their computers will constantly be in danger of bad things happening, so paying for that peace of mind might be what you need. However, if you’re paying for it and they don’t add those protections the first time around then you know you’ve given your money to hacks.

As with everything else you as a buyer has to make a real determination as to whether your money is being spent well. If you pay for a warranty on anything less than $100, at least in my mind you’re throwing your money away. Over that amount and, though I probably wouldn’t bother, it all depends on your comfort level.

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