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The truth about extended warranties, and what to do instead

thinksaveretire.com

Extended warranties are a product. They help the business more than they help the consumer, as no business offers a product at a loss.

A Consumer Report revealed that 55 percent of owners who purchased an extended warranty hadn't used it for repairs during the lifetime of the policy. T...

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For most, extended warranties are bad investments, because we never use the coverage they pay for.

For a warranty to be worth it,

  • Something needs to fail that is covered.
  • We need to use the warranty during the repairs.
  • The cost of the repairs should exceed ...

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Instead of buying warranties, consider setting up your own warranty coverage by putting the money aside in an interest-bearing savings account. Then you have full control over the money and can re-purpose those funds.

This strategy will work in your favor more often than it won't. Consider...

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Before accepting an extended warranty, ask yourself:

  • How likely is it for this thing to break? Search online reviews to find out. Remember that the manufacturer's warranty is often sufficient.
  • Would depreciation make buying a new one worth it?

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