Why extended warranties are hardly ever a good deal

Cost of a three-year extended warranty for a dishwasher: $157.97.

Average cost of a dishwasher repair: $159.

The fact that service contracts often cost about the same as a repair is just one reason extended warranties — also known as service contracts and protection plans — are hardly ever a good deal. After all, what if you never need a repair? Then that’s $157.97 you didn’t have to spend.

“You can insure your life against every possible calamity, but you’ll go broke in the process,” said Anthony Giorgianni, associate finance editor at the nonprofit Consumer Reports. “You are paying for something in advance with the hope that they’ll cover you when something goes wrong, but you may not need the service, or it may not be available.”

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Written By: Elisabeth Leamy

Published By: The Washington Post online

April 23, 2018 In: Current Affairs, Financial Articles Comments (None)