Paying for pricey electronics or appliances isn’t something most shoppers take lightly. And although stores often try to sell extended warranties as an insurance policy against future breakdowns, most electronics are so reliable that coverage beyond the free manufacturer’s warranty rarely pays off. Use this guide to learn why you should usually hold off—and when to consider buying in.
WHEN TO BUY A WARRANTY
Some extended warranties are worth the price tag. Here are two to consider:
- Laptop warranties. If you carry your computer around every day, the need for a repair is more likely. But read the fine print before you commit. Most extended warranties don’t cover accidental damage (although Apple is known to fix problems not covered under its AppleCare warranty). If you’re more comfortable knowing that tech support is just a call or visit away, this investment pays off.
- In-home service. Before you purchase an expensive item (such as a treadmill, refrigerator or 3-D TV) that you plan to use every day for several years—or one with heavy moving parts—check to see if the manufacturer’s warranty includes in-home service. If it doesn’t, an extended warranty might be a smart choice.
WHEN TO SKIP A WARRANTY
Betting that a product will fail during a specific time period will often cost you. Here's why:
- You’re already covered. Defective products almost always reveal problems before the original warranty expires.
- Your coverage might not extend as long you think. The clock starts ticking on most extended warranties the day you purchase the item (not after the manufacturer’s warranty expires). Repairs usually cost less than the warranty. According to Consumer Reports surveys, even when a product does break down, the cost of the repair is typically less than the price of the extended warranty.
- Maybe you won’t want to repair the item two years from now. By the time your product gives out, you might prefer upgrading to another device rather than fixing it.
BONUS TIP: Set up a fund
If the fear of paying for a repair keeps you up at night, give yourself peace of mind by putting the cost of an extra warranty into a savings account.
Source: Tod Marks, senior editor at Consumer Reports