Buying an extended warranty seems reasonable, even fiscally responsible. Who wouldn’t want to know that their expensive car or gadget is protected against freak accidents and random failures? But savvy Redditors are almost universally against warranties, with some arguing that they’re a “scam.”
“I just don’t see the point of paying for a contract (with loopholes) to ‘protect’ something that should just work,” a popular post on r/Frugal reads.
The original poster adds that if a product breaks within the first year, consumers usually have other ways of getting their money back — from calling the company out on social media to requesting a credit card chargeback.
Commenters resonated with the original poster’s “rant,” with many sharing their own experiences with deceptive warranties.
One Redditor shared that when their engagement ring fractured, the Etsy seller said that the “lifetime warranty” they had advertised only applied to the diamonds.
“Easy to give away a warranty on a substance that is literally indestructible, right?”
Experts generally agree that warranties — especially extended car warranties — are not worth the extra cost.
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In an interview with Consumer Reports, money expert Dave Ramsey explains that extended auto warranties are intentionally “overpriced.”
“That’s the reason people sell them, because they make a bundle on them in commissions,” Ramsey says. “I don’t recommend buying extended warranties, ever. If you can’t afford to repair your car, then you can’t afford the car.”
Extended coverage is particularly superfluous on vehicles that already come with robust bumper-to-bumper warranties. Case in point: Both Kia and Hyundai offer 10-year, 100,000-mile limited powertrain warranties.
For extra peace of mind, buy a reliable car that also comes with a solid factory warranty. Hondas and Toyotas are both known for running well past the 100,000 mile mark, and when they do break, repair shops can fix them for cheap.
The story is similar for electronics and appliances.
A Consumer Reports analysis calls extended warranties “money down the drain,” listing half a dozen reasons why they just aren’t worth the extra cost.
Repair costs, for example, might be cheaper than warranty coverage, and some defects may be covered by the included manufacturer warranty. What’s more, many credit cards already offer their own extended warranties for free.
So instead of shelling out cash for something you don’t need, it’s often better to set aside the money you’d spend on a warranty and buy reliable products.
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