By Michael Axe

“Would you like to purchase the extended warranty for a few dollars more?” We’ve all been asked this question at some point, but is that warranty really worth it? In some cases purchasing a warranty is a must-have, other times it’s usually a waste of money.

Must-Have Warranties
Car Warranty
A vehicle is one of the largest purchases you’ll make in your life (in fact you’ll probably make several of these purchases throughout your life). It’s important to protect that investment with an extended warranty, which typically extends the length of coverage of the manufacturer’s bumper-to-bumper coverage. Before you purchase the warranty offered at the dealership, compare it to what your lender has available. You may be able to get comparable or even better coverage at a lower cost through your bank or credit union. (One exception … if you’re the type of person that likes to buy a new car every three years, an extended warranty doesn’t make sense; the manufacturer’s warranty is probably adequate.)

Home Warranty
Your home is your biggest investment – it’s important to protect it. While homeowners insurance is a must in the event of loss or damages, a home warranty can help cover the repairs of certain items in your home such as kitchen appliances, plumbing and the water heater. If you’re buying a home that has a lot of older equipment and mechanicals, a home warranty could be very beneficial. Just like insurance companies, there are a lot of warranty companies selling policies, so do your research before making the purchase.

Maybe
AppleCare
Apple offers an extended warranty service called AppleCare for its products. AppleCare can be added to Mac computers, iPads, iPhones, Apple Watches, Apple TV, HomePod and iPods. The price, length of service and support offered varies by each product. Unlike regular service warranties, AppleCare offers more than just repairs, it also includes over-the-phone technical support, which could be worth it for those of us who are less tech-savvy.

Cell Phone Provider Warranty
When purchasing a cell phone most providers offer a protection plan on their phones. For around $10 to $15 a month, your phone is protected under most situations. You’ll want to read the fine print to see exactly what your provider covers. The service can also be canceled at any time, which helps if you realize that the warranty isn’t needed any longer.

Skip
For most other purchases if a sales clerk offers you an extended warranty, skip it. Many of these warranties provide very little protection. In fact most, if not all, items come with a manufacturer’s warranty, so there’s no need to purchase extra protection. Service warranties offered at stores are more beneficial to the store’s financial success than yours. It would be more cost-effective to take the money you would have spent on the warranty and put it into savings.