Do You Really Need That Extended Warranty?

I don’t purchase extended warranty plans.

Extended warranties don’t make much sense to me. Here’s why. First, I’m buying a new product that comes with a limited-time warranty from manufacturing defects. If it doesn’t work as expected I can likely return it within the first 30 days without a problem so long as I’ve not abused the product. Second, extended warranties are sold with a lot of fine print that typically narrows the liability of the manufacturer. Unless I’m willing to take the time to read it, I have no business paying for a warranty. Even though it sounds unlimited, it’s naive to assume that the warranty will cover anything that may happen to the product while standing in a store line ready to check out. Finally, the issuers of extended warranties don’t offer the insurance coverage unless the financial odds are for their benefit. They’ve done the math, the necessary research, and they know that the probabilities are in their favor, not yours. For these reasons, I usually pass.

Now, I’m sure there are stories of folks who benefited from one of these warranty plans. So I’m not saying you should never purchase one. I’m just saying do your homework, know what you’re paying for, and understand the cost vs. reward before you take the offer. And before you make a major purchase, remember what Jesus warned in Matthew 6. He said, “… store up for yourselves treasures in heaven, where moths and vermin don’t destroy, and where thieves don’t break in and steal. For where your treasure is, there your heart will be also.” (Matthew 6:20-21) Now that’s the only extended warranty worth having!

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