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Practical Money Matters Radio Series

December 3, 2012
When Do Extended Warranties Make Sense?


Are extended warranties worth the cost? Find out in this radio episode.

Transcript

Seems like almost everything we buy comes with an optional extended warranty. And for good reason: They're highly profitable for stores, but usually not worth the extra cost for you. Plus, many credit cards provide free extended warranties when used for purchases. Sometimes they might make sense, however. For example, a high percentage of laptop computers need repairs or get stolen within the first few years. Likewise, if you or your kids are prone to dropping or losing smart phones, a warranty might be cost-effective. But for cheaper electronics and appliances, extended warranties are rarely worth the cost. By the time they break down, you'll probably be ready for a newer version anyway.

Bottom line: Unless you're a klutz or buy inferior products, extended warranties are not a good idea.


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