Are Extended Warranties Worth It?
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But, much of the time, you may be wasting your money when opting for the longer protection, Consumer Correspondent Susan Koeppen said on "The Early Show on Saturday Morning."
She gave numerous specifics, drawing on information gleaned in large part from .
When asked by co-anchor Betty Nguyen whether consumers should buy extended warranties, Koeppen replied, "In most cases, the answer is 'No.' Do not buy the warranties. Stores bring in $15 billion a year selling extended warranties, so it's great business for them. It might not be so good for you."
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"Rule of thumb is no, do not buy the extended warranty." Koeppen showed one that sold for $100. The extended warranty was $60. "You can buy a new camera for that and the rate of repair on a digital camera is about 10 percent. So the chances of yours breaking -- really not very high."
"The rate of repair on a TV is three percent. So, the answer is no extended warranty on a flat screen TV. You probably do not need it."
"The rate of repair is 13 percent. (A vacuum cleaner on the set was) $150. The extended warranty they tried to sell us was $50. If I need a new one, I'm just gonna buy a new one."
So again, no, said Koeppen.
"Here we have a 'Maybe,' because the rate of repair on a laptop is 43 percent. So, if ... you know you're going to be carrying it around a lot, you might drop it, might be taking it on road trips, it might be worth your while to get a warranty. Forty-three percent need to be repaired within the first three-to-four years -- it might make sense for you."
"Usually, there are catches. You need to read the fine print. For example, if you get a lifetime warranty on a roof on your house it may only be good for you -- if you sell your house, it may not transfer to the next owner, so you need to figure that out. , the lifetime warranty doesn't cover the labor or the shipping and handling. So those are other things to consider: It might not all be free in the long-run."
Credit Cards' Protection
"You might have an extended warranty if you used your credit card to pay for the product. A lot of credit cards, especially if you have a high-end credit card, will offer you up to one year of an extended warranty. So, if your manufacturer gives you a one-year warranty, your credit card company will match it," bringing the total warranty to two years.
Other Long-term Warranties
"L.L. Bean (doesn't) have a lifetime warranty, but (it does have) something called a 'satisfaction guarantee.' So, they told us a story, someone had bought luggage back in the '50s, something broke on it, the person returned it years and years and years later, and they gave them new luggage! L.L. Bean says, if you're not satisfied with your product, you can return it."
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