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Extended warranties aren’t worth it

You’ve just plunked down $89.99 for the Veg-O-Magic 5000 because this is the week you finally start on that all cucumber juice diet. So, do you buy that extended warranty for just a few bucks a year? Money that you could otherwise be investing? I mean, you’re gonna be juicing until you’re 125, right? Maybe, […]

Extended warranties
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You’ve just plunked down $89.99 for the Veg-O-Magic 5000 because this is the week you finally start on that all cucumber juice diet. So, do you buy that extended warranty for just a few bucks a year? Money that you could otherwise be investing? I mean, you’re gonna be juicing until you’re 125, right? Maybe, but here’s why it’s not worth it:

  1. Most big-ticket products are already covered with a year-long warranty — and your credit card may well extend that term.
  2. Companies make huge profits off extended warranties, as much as 60% according to Bloomberg News. Why? Mainly because …
  3. Things don’t break as often as we think. Consumers estimate a new TV has a 13% chance of failure over three years but the actual rate is more like 5%, according to one study.

The good news: Extended warranties are a bad buy because products are well built.

A well-built Veg-O-Magic ought to last well beyond your taste for cucumber juice. And if it needs a fix, pay out of pocket. Chances are, you’ll end up ahead.

#cucumbers#Financial Literacy#spending