Used Car Extended Warranties

Extended Warranties: Deal or no Deal?

With profit margins that industry analysts estimate exceed 50%, it's easy to see why retailers promote extended warranties on everything from computers to cars.

Having future repair or replacement costs covered can indeed be reassuring. And even just knowing where to call can reduce stress. "Service contracts are designed to minimize the hassle associated with downtime and repairs, while maximizing a product's functionality and the owner's enjoyment of the product," says the Service Contract Industry Council, or SCIC. The trade association's members offer about 80% of all U.S. service contracts, a term used interchangeably with extended warranties.

But experts warn that the peace of mind comes at a stiff price that can be hard to justify, particularly if you charge it and pay financing costs as well.

"I never buy extended warranties," says James Ward, a marketing expert at Arizona State University and director of its full-time MBA program.

Ward's aversion to extended warranties is widely shared. Consumer experts say that savvy shopping and solid financial planning can help you prepare for breakage or repairs without forking over big bucks for a contract you may never use. The keys are to do your research, explore alternatives and don't let fear drive your decision-making.

Start with basics. How much is the warranty, relative to the product's price? If it's more than 20%, it's higher than normal. The SCIC says most extended warranties run 10% to 20% of the sales price.

Even at the low end of that range, some consumer advocates say the price is too steep, especially if you routinely pay it on every household item. Consider skipping the warranties and paying for the occasional repair.

"The problem is extended warranties are expensive -- more than the cost of the repair, and things don't break down (that) much," says Anthony Giorgianni, associate finance editor for Consumer Reports Money Adviser. A truly defective item will probably fall apart during its original warranty, he says. And retailers, to keep customers happy, often fix items outside of a warranty if asked nicely, he adds.

Consider also the life span of your purchase. Do you really want a lifetime warranty on the latest computer? There's a good chance you'll want to upgrade in a year or two, anyway. Furthermore, tech products traditionally drop in price over time. So future replacement cost isn't necessarily the value it appears to be today.

An Extended Car Warranty Is a Wise Investment | Used Car Warranty

Even if you are purchasing a new car with a warranty it could be extremely wise to purchase an extended warranty. This is particularly accurate if you intend on keeping your vehicle for more than a couple of years.

Most times new cars run comparatively well for the 1st year or two off of the lot. Nevertheless, trouble oftentimes begins to arise correct around the time when the manufacturer’s warranty expires. It is for this reason that an extended warranty is such a wise investment.

Most men and women who buy new cars do so with a payment plan. In other words, you are likely to be paying off your auto for three to five years right after you drive away from the dealership.

Vehicle payments can be as a lot as numerous hundred dollars a month. In today’s economy, that is very a bit of cash. What numerous individuals do not take into consideration when they obtain a new auto is that there will undoubtedly be extra expenses for automobile repairs and maintenance.

The expenses for repairs and maintenance get really high-priced. Some months, the price of repairs exceeds the cost of the monthly auto payment. When this occurs, many auto owners fall short of the mark and are either unable to make a car payment or unable to repair their automobile. This is really a predicament thinking about how dependent most Americans are on their automobile.

This predicament can be avoided by purchasing an extended auto warranty. An extended automobile warranty covers the cost of high-priced car repairs. Knowing that your vehicle repairs will be covered when they arise will go a lengthy techniques towards giving you peace of mind.

There is nothing worse than coming up short on the bills and an extended auto warranty can assist you avoid this from occurring. Uncover more about extended vehicle warranties at http://www.autoservicewarranty.com/extended-warranty-quote.

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