Is an Extended Warranty Worth the Money?

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When you spend a couple of hundred dollars on a new piece of technology, the last thing you think about is that you may have to get it repaired at some point. But that’s not what the salesperson tells you. “For only a few extra dollars, you’ll have peace of mind knowing that your printer will be covered in the event of a disaster,” is what you might hear when you buy any new technology device.

Manufacturer's Warranty

Is an extended warranty worth the extra money? Probably not. First of all, most products come with their own limited warranty that’s good for a year in case it is defective. Many of these warranties may not cover “electrical current fluctuations,” but if you have a surge protector (and if you have computers and peripherals plugged in, you should). Most major manufacturers are going to offer a similar warranty.

Use a Credit Card for Extra Protection

Often when you buy a product with a credit card, there’s also some additional protection there. American Express offers to reimburse you if it’s lost, stolen, or zapped by lightning in the first 90 days after purchase. If for some reason the store you bought the product from won’t exchange it if it’s faulty, American Express also offers a certain amount towards a refund.

Other credit cards offer similar plans; check with your card’s issuer to find out what your options are if you have a problem with an item you purchased using that card. Just make sure you hang on to your receipt. Consumer Reports calls extended warranties “notoriously bad deals” and even took out an ad in USA Today that said simply, “Despite what the salesperson says, you don’t need an extended warranty.”

How Long Will It Last?

Since most extended warranties are generally for only a year or two and most technology usually becomes outdated or obsolete within a few years, many extended warranties may be a waste of money. It's important to ask yourself how long you intend to have your product, how long the warranty will cover your product, and then weigh the pros and cons.

Bottom Line

If you want peace of mind, check the manufacturer’s warranty before you make your purchase, pay for your new technology with a credit card that offers some assistance, choose a good surge protector and keep the machine in good shape, and be gentle with electronics.