This week we’re talking about extended warranties. When purchasing electronics, home appliances, and other devices, many retailers now offer an extended warranty, sometimes called a protection plan or service contract. But is the peace of mind worth the extra price? Here are BBB’s tips on what to consider before you purchase an extended warranty.
Determine whether an extended warranty is worth the cost. Review the manufacturer’s warranty first. Since most products already come with a free manufacturer’s warranty, extended warranties often provide overlapping coverage you might not really need.
Check your credit card benefits. If you make a purchase with your credit card, you may already qualify for an extended warranty, free of charge. Typically, credit card companies add up to a year of additional coverage and cover the same defects as the manufacturer’s warranty. You’ll need to check with your credit card company to find out if they offer extended warranties and what kind of purchases are eligible.
Read the fine print. Before you purchase any protection plan, read the fine print You may find there are many exclusions that make the plan less valuable. If you are worried about theft, loss, and water damage but these factors aren’t covered by an extended warranty, or if you see phrases like “coverage excludes repairs due to accidental damage” you may decide the coverage isn’t worth the cost.
Understand how to make a claim. You’ll also want to make sure claims are relatively easy to file. If you decide to purchase an extended warranty, know what documents you’ll need to file a claim and keep them somewhere safe. If the claim filing process seems extremely complicated, ask yourself if you’d even use the warranty.
Find out which servicing companies you can use. With extended warranty plans, you will be limited as to what companies can make repairs or offer replacements. Find out what companies you’ll be getting service from and how long it usually takes them to complete a repair.
