Buying an extended warranty is the same as purchasing insurance. There is the risk that the item you purchase is going to break down sometime during the lifetime that the insurance covers and there is a cost to being covered for this possibility. Generally speaking, it is a bad decision to buying an extended warranty, since most manufactured goods are of very good quality. When you think about it why would a company offer an extended warranty that you pay for other than to make money. They have figured out the probabilities of having to make repairs under the warranty and feel that they will make a profit on the premiums. This is just good business. However there are times or situations when an extended warranty is worth it.
Buying an extended warranty
Take the purchase of a car for example. If you plan to keep a car well beyond the regular manufacturers warranty it might be worth it to pay for an extended warranty. The price of major repairs on a vehicle can be very expensive. One claim may be sufficient to cover the cost of the warranty and this cost could also be expensive enough to drain your bank account. It basically comes down to risk vs. cost and this is one situation in the writer’s opinion it would be worth it to take the extended warranty and pay whatever it costs.
Electronic stores routinely ask you if you want to purchase insurance for your purchase. A TV that costs $300 to $600 is not going to break your bank account and if it does stop working purchasing another is not that expensive. Besides it may be time for an upgrade since electronics are changing so fast. In the writer’s opinion we suggest never to purchase the extended warranty for electronics. Save your money and use for other items that are more important.
There is one caveat to this rule. If you depend on your computer for your livelihood and cannot afford to be without one for any length of time you may want the insurance to ensure a quick turnaround for repairs. Make sure that this is one of the features that comes with the insurance. Twenty four hour turnaround will be important in situations like this. Waiting for 3 weeks for your computer to come back is not something that you would want to deal with. The alternative is to have a back up computer. It should have all of the same software and data on it so that you are never without a computer.
