We have all received a sales pitch to purchase an extended warranty, but a new report in US news and World report lists several reasons why in most cases that may not be a good idea.
1. The original warranty is sufficient
2. Extended warranties are filled with exclusions
3. Your gadget will be worthless when it finally breaks
4. Most items do not need repair the first few years
But what do you do when a business that sold you a warranty closes down? Melanie Duquesnel, the president and CEO of the Better Business Bureau serving Eastern Michigan said, "the difficulty is with retailers, especially those that we know are having financial difficulties, is those extended warranties may be by the retailer or it might be by a separate company."
Duquesnel says that you should make sure you know who owns all warranties before you purchase them, and always keep the paperwork in case of a store closure.
Another red flag to watch for are the calls and postcards stating the warranty is up. An extended warranty could be usurped by the manufacturer, or if you made the purchase on a credit card, most cards will extend the warranty by another year.
The BBB says you need to make sure you know what you're purchasing. If you are uncertain that a store will remain open, you might want to look elsewhere for coverage.
