Why You Should Always Skip The Extended Warranty

It’s hard to save money when everyone is always trying to get into your pocket. There’s no meaner scam, however than the extended hardware warranty.

You buy a TV for $1,500 and are told there’s a warranty that’s “only $299” to go with it. That’s 20% extra on the base price of the TV!

What Do You Get For That 20%?

What you get is a pretty bad value insurance policy. Many of the terms are already included in your household insurance or even on your credit card’s insurance policy. The rest are often unclaimable exclusions designed to ensure that the $299 is the retailers and you’re not seeing any of it ever again.

Deep down everyone knows this but retailers still sell you the policy because, we’re all risk averse and it sounds sensible.

The worst of it is that the manufacturer’s warranty will usually cover any gaps that your credit card and household insurance won’t – so really there is nothing that you need from this kind of extended warranty.

Here’s What To Do Instead Of That Warranty

• Breaks in the first year. Contact the manufacturer and use their warranty scheme to fix it. In fact, even if it’s not the first year, check with the manufacturer they often replace known faults for free even when the warranty period is over.
  
• Breaks in the second year. Contact your credit card about their product protection plan. Then claim on it.
  
• Breaks in the third year. Fix it yourself if it’s economic and replace the item if it’s not. In the main fixing stuff is pretty cheap, much less than $299 that’s for sure.