Digital Crave

Don’t buy the extended warranty – ever

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There comes a point near the end of most transactions when the salesperson asks you if you’d like to purchase the extended warranty. Many consumers dread this moment because it is a widely held belief that extended warranties are for suckers. But they sound so comforting, so necessary. The salesperson has been ordered to offer this warranty, and to make it sound like a crucial purchase. There must be a time when the warranty is a good idea, right? Wrong.

“Extended warranties are pure profit for retailers as they pocket more than 50 percent of an extended warranty’s cost,” wrote retail expert Louis Ramirez, in a recent a piece for that debunked a dozen tech shopping myths. Still not convinced? Here are five things you can do instead of buying that expensive – and useless – extended warranty.

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1. Check the manufacturer’s warranty
“Rather than be bullied into buying one the next time you’re at a retail store, take a look at the warranty provided by the manufacturer (which oftentimes is more than sufficient) and research warranties provided by third parties like SquareTrade,” Ramirez says.

You’d be hard pressed to find a gadget on the market that doesn’t come with a decent manufacturer’s warranty, often covering your purchase for one year. A study by none other than Consumer Reports found that most products rarely need repairs during the period of time covered by the extended warranty.

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Federal Trade Commission

Federal Trade Commission

2. Check with the Feds
The Federal Trade Commission is a reliable source for consumer advocacy and advice. They suggest consumers do their homework prior to purchase. Research the terms, conditions and dates of the manufacturer’s warranty and find out whom to contact if you need service.

Finally, ask about the depth of the coverage. Are all parts covered? Will you still be covered if the device fails because you dropped it? If a salesperson makes a promise orally, such as that the company will provide free repairs, get it in writing. Otherwise, you may not be able to get the service that was promised.

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3. Check with the state
All states have implied warranties. Almost every purchase you make is covered by an implied warranty. The most common type is known as a “warranty of merchantability,” which means that the seller promises that the product will do what it is supposed to do.

Another type of implied warranty is the “warranty of fitness for a particular purpose.” This applies when you buy a product on the seller’s advice that it is suitable for a particular use. For example, the salesperson that suggests you buy a laptop accessory for a specific need warrants that it will fill that need.

4. Do you trust the brand?
If you’re sticking with the manufacturer’s warranty – and you should – also consider the reputation of the manufacturer.

For instance, Microsoft took a lot of heat for shipping early Xbox 360’s that were prone to failure. However, the company made right by their customers by greatly extending the warranty and, later, releasing a better model. Keep this in mind when buying a popular brand. Companies such as Sony and Nintendo have excellent track records for building quality products. If you’re not familiar with the company that makes your gadget, ask your local or state consumer protection office or Better Business Bureau if they have any complaints against the company. A warranty is only as good as the company that stands behind it.

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Wii U

Wii U

5. Save your receipt and warranty info
Are you so excited to get that new HDTV or laptop home that you ignore the warranty paperwork in the box?

Don’t be. It is the buyer’s responsibility to keep the receipt to document the date of purchase or prove that the buyer is the original owner in the case of a nontransferable warranty.

While we’re on the topic of responsibility, make sure to perform required maintenance and use the product according to the manufacturer’s instructions. If you beat up that laptop or throw a Wii controller through the HDTV screen, you’re probably on your own.

(On an unrelated note: If you’re thinking of trading in your Wii for a Wii U keep your controllers. They work with the Wii U for old and new games.)

What if you’re still not convinced? Although we can’t think of a time when buying the extended warranty is a good idea, there are consumers who disagree. If you are among them, here are some things to consider.

First, read the agreement. This is no fun, but it’s important. Keep your eyes open for exclusions and conditions that would void your warranty.

Second, find out how long the extended warranty lasts. If it says three years, find out if that means from the date of purchase or from when the standard warranty expires. Also, consider if you’re still going to want that item three years from now. If you’re buying a gaming console or an MP3 player that you plan to upgrade in three years, why buy the warranty?

Finally, think about the cost. suggests that if the cost of the warranty exceeds 20 percent of the cost of the product, you’re probably spending more than a repair job will cost you.

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