Woman cleaning
It’s Time to Spring Clean Your Finances!
April 16, 2018
Couple worried about money
What to Do When Your Spouse is Bad With Money
April 16, 2018
Show all

Should You Get the Extended Warranty?

Woman shopping for TV

These days it seems like you can get an extended warranty on practically anything. But are they worth it? A lot of articles on the internet say ‘no’. But the answer isn’t quite so simple.

From the retailer’s side of things, an extended warranty seems like a no-brainer. After all, you can get extended coverage for only a small portion of the original cost. But a retailer’s purpose is to make a profit. If that’s the case, why would they offer the extended warranty?

From a statistical standpoint, there is no reason to buy a warranty. It’s like going to the casino – the house always wins in the end. But, most people opt into the extended warranty because of “regret avoidance” – they don’t want to feel foolish if something does break.

Here are a few guidelines for when to say yes and when to say no:

When you SHOULDN’T get the extended warranty

  • When you’re purchasing a reliable brand. It may still break, but the odds are in your favour.
  • When the cost of the repair is cheaper. If the cost of the warranty is more than 20% of the product’s price, it’s probably not worth it.
  • When the free warranty from the manufacturer is sufficient. Be sure to check – what does the free warranty cover, and for how long? Does this make the extended warranty redundant or unnecessary?
  • When the extended warranty only covers specific types of damage that is unlikely to happen to you.

When you SHOULD get the extended warranty

  • When peace of mind is more important than the cost of the warranty. If purchasing the warranty makes you feel better, then it’s money well spent.
  • When you’re purchasing a high-ticket, previously owned product, like a used car. The unknown factor in addition to the
  • When the extended warranty offers a replacement for when your product is being fixed – and you don’t want to go without for the duration (like for a cellphone or tablet).

If, against all odds, something major breaks and you need a quick and easy financial fix, a payday loan from Pay2Day is a timely, manageable solution.