Get-Rich-Quick Schemes = Get-Poor-Quick Realities III

Extended Warranties

Many merchants encourage customers to buy extended warranties when they buy autos, appliances or electronic items. They’re profitable for the merchants, who pocket up to 40 percent of the amount before sending the rest to the insurer. Don’t buy extended warranties on appliances or electronics. While you pay for them in advance, they do not begin until the manufacturer’s warranty runs out—up to three years.

These warranties do not cover normal wear and tear or rough handling—the usual reasons repairs are needed. Certainly don’t finance an extended warranty. You then pay interest on a contract that won’t start for up to three years. Consumers rarely benefit from extended warranties. Name-brand appliances usually don’t break down during the first few years and if they do, they’re covered by the original warranty. Similarly, defective electronic equipment usually breaks within the first few months and is covered by the original warranty.

Your thoughts on this subject? Your comments appreciated!

Content © Rich Brott, 2011

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