Extended Warranties: Don’t Let the Exceptions Rule

Photo (cc) by Remko van Dokkum

Back in April, Money Talks News deals diva Karla Bowsher wrote about the amazing benefits of extended warranties – with a wink and a nod. In Extended Warranties: Worth the Cost?, she detailed a new study that praised extended warranties as “a testament to their value.”

Of course, that study was conducted by something called the Service Contract Industry Council (SCIC). As Karla wrote…

While the SCIC helps consumers by lobbying for better regulation of extended warranties (the “service contract industry”), their members are companies that sell extended warranties – so SCIC is not going to sell them out.

So now a more objective source has weighed in. The nonprofit Consumer Reports delved into the debate in its August issue. As part of a larger investigation called Repair or Replace It?, the magazine declared, “Extended warranties don’t deliver.”

Appliances usually don’t break during the extended-warranty period, normally after the standard warranty has expired but within two to three years of purchase. Even when breakdowns do occur in that time, the median cost of repair, $150, isn’t much more than the median price of a warranty, $142. And if the product doesn’t break, you haven’t wasted your money on needless protection.

But every rule has its exception.

“A computer might be an exception, especially if you travel a lot or it’s for your busy teenager,” Consumer Reports says. “Make sure the warranty covers accidental damage and extended tech support. Some credit-card companies extend the manufacturer’s warranty free. American Express, for example, adds a year of protection for computers.”

(For owners of Apple laptop and desktop computers, the rules are slightly different. Many owners do seem to benefit from the extended warranty the company offers, called Apple Care. While most user forums sing its praises, some owners prefer to go without it.)

In an interesting twist, one of the early architects of the SCIC responded to the August issue of Consumer Reports by spinning it toward the need for more extended warranties.

“If you’re someone who has ever had to find a quality repair vendor to come into your home to fix your washing machine, or if you’ve had to track down a manufacturer on the weekend of a big game to help you troubleshoot your big-screen TV, then you understand the value and benefits of a service plan,” said Fred Schaufeld, chairman of NEW, which offers extended warranties.

Consumer Reports’ latest issue backs up what Money Talks News has been saying since 1991: In general, avoid extended warranties. But study the few exceptions. Check out these helpful videos…

Are Extended Warranties Worth It?

Extended Car Warranties: 3 Things to Know

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
5 Ways to Put an End to Junk Mail
5 Ways to Put an End to Junk Mail

Here’s how to keep unwanted mail from clogging your mailbox and trash can.

New Ways to Save Money on Insurance of Every Kind
New Ways to Save Money on Insurance of Every Kind

Tech startups are making it easy to find the best rates for all kinds of insurance policies — and get covered fast.

11 Home Upgrades With the Best Payback in 2020
11 Home Upgrades With the Best Payback in 2020

The home remodeling projects that deliver the best bang for the buck tend to have one thing in common.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

19 Things You Should Never Buy at a Grocery Store
19 Things You Should Never Buy at a Grocery Store

These household necessities are overpriced at the grocery store. Get them cheaper at these places instead.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

11 Generic Products You Should Buy at Costco
11 Generic Products You Should Buy at Costco

Not all generics are worthwhile, but these are among the best from Costco’s Kirkland Signature brand.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.

8 Tips for Retiring Comfortably on Social Security Alone
8 Tips for Retiring Comfortably on Social Security Alone

It’s never too early to start learning how to live well while living on less.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

7 Bank Accounts With Extra Perks for Seniors
7 Bank Accounts With Extra Perks for Seniors

These accounts offer exclusive discounts and other perks — including interest — to older customers.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.