To Warrantee or Not to Warrantee

There is no shortage of opinions on whether warrantees are a good buy. Most of the time, warrantees cost more than the benefit received from them. If that weren’t so, businesses wouldn’t offer them. So, shelling out good money for a warrantee you probably won’t need is a bad idea, right?

Not necessarily. The benefit of a warrantee is that you know if the warranted item breaks down, it will be fixed or replaced. For luxury items, that may not be a big deal. If it comes down to it, you can probably live without an iPad or HDTV for a few weeks. Other items aren’t quite so optional. You’re going to shell out the money to repair or replace items like:

  • Cars or trucks. Most of us need them to get to work. You know, so we can pay the car and insurance payments. At some point, all cars get past the point of being worth buying an extended warrantee-or beyond the point where you could buy one if you wanted to. In such cases, a service plan (essentially, pre-paid mechanic services) may be a good idea to save your budget from surprises.
  • Major appliances. Unless it’s freezing outside, a refrigerator isn’t optional. Most of us wouldn’t last long without a washer and dryer, either (and even if we did, we’d spend more than it’s worth at the Laundromat). Before you buy the warrantee, check with your utilities company. Many of them offer an inexpensive appliance repair program which may be a better deal than an extended warrantee.
  • Work equipment. Whether it’s a laptop and printer or a jackhammer and backhoe, equipment you need to earn your living is often worth the price of the warrantee.

Having those kinds of items warranted can really save your budget when the car or the stove breaks down. If you have items which can be warranted and which are essential to your lifestyle, buy the warrantee. The exception to this is if you are in a financial position to replace the items without straining your budget.

Like any other cost, you’ll want to work the price of warrantees or service plans into your budget. The main benefit warrantees offer your budget is protection from surprise expenses. Any time you purchase a warrantee, spend the time to look it over and make sure you understand what it does and doesn’t cover.

What kinds of items do you buy extended warrantees on? On which items do you pass on the warrantees?

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