CORPUS CHRISTI, Texas — So by now, many of us have purchased some type of electronic or gaming device as Christmas presents. But did you buy the extended warranty? Are they really necessary?
In today's Protecting Your Money, the Better Business Bureau weighs in on whether extended warranties are really necessary.
Those smart phones, TV's, laptops and gaming devices you got for Christmas look so nice when they’re brand new; all shiny and bright. Until they break down for whatever reason, then you want to get them fixed as soon as possible.
Now do you remember the salesperson recommending an extended warranty? Because there’s something in it for them as well when you get that extra protection for your gift.
"Yes you’re paying that amount for the warranty. It’s going to either the retailer or the manufacturer, but that sales associate will likely get a small percentage of that on their paycheck," said Katie Galan with the Better Business Bureau.
Now there is a manufacturers warranty and an extended warranty. According to insuranceadvocate.com, a manufacturers warranty is automatically included in the purchase of their product. The extended warranty is not.
It’s up to you whether to add it to the purchase price. It’s generally a one-time cost between $150 and $350.
So why do so many experts like financial advisor Dave Ramsey say extended warranties are overpriced? Consumer Reports says they’re money down the drain.
As Galan explains, you have to ask yourself, "would it be cheaper in three to five years to purchase a brand new TV than it would be to pay for an extended warranty that you’re gonna pay for upfront?"
