Extended warranties, more properly called service contracts, are another hard-sell upsell, especially on electronics and appliances. Personal-finance experts and consumer advocates generally are not fans — they’re almost pure profit for retailers. Many purchases are covered by the manufacturer for a period of time.
And if you made the purchase on a credit card, the card may extend that warranty. For autos, service contracts are “a losing bet,” said Consumer Reports. Because vehicles are so reliable nowadays, “the chance of needing extended warranty coverage just isn’t as great as it used to be,” it said. If you really want a service contract, be clear on what it covers.
For some products, such as electronics, you might investigate third-party providers such as . The third-party automotive service-contract industry has had reputation problems. One new company, , claims it has designed a more consumer-friendly service contract, based on transparency and simplicity. Gregory Karp, The Chicago Tribune
