6 Reasons Why Extended Warranties Are a Waste

Your mind is racing. You’re about to press the “Purchase” button when you see that there is an extended warranty or accident protection offered. The price seems reasonable compared to how much it would cost to replace the product. The sweat starts to pour down your brow as you weigh your options. Amazon and other retailers like to offer you extended warranties on everything from toothbrushes to vacuums. Well, as always, Brains Report is here to help you with your decisions: save your money: don’t buy the warranty. Here are the reasons:

  1. The Math Works against You

Manufacturers, underwriters, or whoever is backing the warranty would not offer it if they didn’t make money off of it. Therefore, they are collecting more money (from you) than they are paying out. This is a good sign that you do not need it.

  1. Quality Businesses Will Stand By Their Products

Use capitalism to your advantage. If a manufacturer is going to play warranty games with you, don’t give them your money. It’s that simple. In my reviews, I’ll let you know if manufacturers have crappy customer service and if their warranties – which they should give you for free – are not worth the paper they are printed on. Most of the best manufacturers who are producing quality products will replace your malfunctioning unit whether the warranty has run out or not (within reason).

  1. Warranties Don’t Cover What You Hope They Will

Warranties are squirrely documents. You really need to read the fine print because there are likely all sorts of caveats that can render the warranty worthless for your purposes. For instance, the powers that be love to sneak extra fees in there.

  1. You Are Covered Elsewhere

If there are basic problems with the manufacturing of your appliance, then the manufacturer’s warranty will typically cover repairs or replacements. If they won’t, you can try posting an inflammatory review of the product on Amazon. That gets them to change their tune about 98% of the time. There are also circumstances where your homeowner’s or renter’s insurance will cover replacement of the product, like if it’s stolen or Mother Nature gets angry and destroys it. But, not if God decides to act. Acts of God are what keep the insurance companies in business.

  1. They May Go Out of Business
  • Step 1: Start a warranty business
  • Step 2: Collect millions of dollars for warranties
  • Step 3: Pay yourself a ridiculous bonus
  • Step 4: Declare bankruptcy
  • Step 5: Profit
  1. Only Get a Warranty for Items You Need and Would Have Trouble Replacing

My sixth reason really goes against my whole thesis because extended warranties are not ALWAYS a bad idea. There are rare circumstances where you might want to extend that crap. If, and only if, your situation meets all of these conditions, an extended warranty may be worth it:

  • The item costs more than you could conceivably scrape together within 24 hours’ notice (around $1,000 for most people)
  • Living without the item would have a severe and adverse effect on your life
  • You plan on having the product (and will not look to replace it) for the entire length of the warranty
  • You are certain the warranty covers what you want it to cover (without additional fees): sorry, you’ll have to do some reading of fine print for this
  • The manufacturer’s free warranty doesn’t cover the same thing for the same time
  • The price is right (sit down, Bob Barker/Drew Carey fans)

Do you have warranty stories? How about Warrant stories? Share either with us, Cherry Pie.