EXTENDED WARRANTIES: WORTH IT, OR A BUST?
At The Homework Guy, we tend to agree with Consumer Reports on Extended Warranties.
Consumer Reports has generally advised against purchasing extended warranties for cars.
They highlight that these warranties, which cost extra, are often not recommended because they often do NOT provide the value or coverage that consumers expect.
Instead, Consumer Reports suggests focusing on vehicles with reliable track records and considering the coverage provided by the factory warranty included in the price of a new car.
THG agrees.
Furthermore, they note that in nearly every case, it’s best to decline the offer of an extended warranty.
This perspective is supported by a study from Stanford University, which found that consumers often overpay for extended warranties, and a big majority never get their investment back.
Consumer Reports
The general consensus from Consumer Reports is that extended warranties often do not offer good value for the money and that consumers would be better served by selecting a reliable vehicle and relying on the standard warranty that comes with it.
The THG Plan (Our Recommendation):
We aren’t suggesting that you totally ignore the possibility of a car repair. Here at The Homework Guy channel, we strongly recommend that you take the following 4 Steps into consideration and save yourself some money and future disappointment:
1) Buy a good reliable vehicle (see reliability ratings) https://www.wsls.com/news/local/2023/12/05/consumer-reports-most-reliable-cars-of-2023/,
2) PPI Pre purchase Inspection. Always getting a PPI Pre-purchase Inspection, and then
3) Proper continuous maintenance and care. In addition,
4) Car Repair Fund. We recommend having the self-discipline to save some money each month (to add up to at least what the extended warranty would have cost you) so you are financially prepared if/when repairs come up! If you never need a repair, you have money saved to use for your NEXT car!
The THG Plan makes a ton more Financial Sense then blowing money on warranties that most people never use, and for those who do use them, most people NEVER recover what they spent on the warranty.