Should You Buy That Extended Warranty?
You buy a new phone or a washing machine or a car. It’s a big purchase and you want to keep it working as long as possible. At some point, the salesperson will ask you if you want to buy an extended warranty. What exactly is it and is it worth the money? What exactly does it cover?
Sometimes extended warranties are worth the money, and sometimes it’s cheaper to pay for a malfunction out of pocket. You’ll find this add-on cost, sometimes called “insurance,” offered in many kinds of purchases: home service contracts, car sales, electronics and home appliances from major retailers.
This post originally appeared on Money Crashers.
An extended warranty is an agreement or contract to repair, replace, or maintain an identified vehicle, residential or other property due to operational or structural failure from a defect in materials, workmanship, and, in some cases, normal wear and tear. It is generally sold as an add-on product, and covers a specific duration of time in return for the premium paid.