When to Buy Extended Warranty? Usually Never

You just bought a new dishwasher, TV, tablet, refrigerator or other big-ticket item you’ve been wanting for months. The salesperson, or maybe even the cashier, asks if you’d like to add an extended warranty for a few dollars more.

Is it a worthwhile extra expense? Our cars, appliances, gadgets and almost anything electrical have complicated parts that can break and make repairs more expensive — sometimes more costly than buying another new item. An extended warranty would cover such repairs, we’re told, and give us peace of mind.

But don’t buy one so fast. For one thing, they’re almost an impulse buy and are sold without giving you much time to think about them or read the fine print of the contract.

They can also be repetitive. Most new products come with a free manufacturer’s warranty for three to 12 months, promising a free replacement or repair if something breaks. Accidental damage may not be covered or coverage could be denied if you don’t follow the company’s instructions for routine maintenance.

Extended warranties are meant to extend those protections for a year or more, depending on how much extra coverage you buy. Some may require paying a deductible to get service, or for the customer to pay shipping fees.

Also called service contracts, the Federal Trade Commission warns that extended warranties may not be needed simply because the product isn’t likely to need repairs or the cost of repairs is low.

The claims process could be complicated. Instead of the retailer handling a problem, you may have to mail the item to another company and file a claim with a third party.

If you buy something with a credit card, the credit company may automatically extend the manufacturer’s warranty for a year or more without you having to pay anything extra.

Another way to protect yourself from being pressured to buy an extended warranty is to put the money you would have spent on it in a savings account. That fund can be used to pay for any repairs if they’re needed later, or could eventually be used to replace a broken product.

The best method may be to research products for reliability before buying, giving you the best chance that a warranty won’t be needed at all. After that, caring for them as recommended by the manufacturer should help ensure a long life that will keep your gadgets running long after any extended warranty would have ended anyway.

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