In many cases, the question of whether or not an extended warranty should be purchased is answered quite simply with a resounding, “No!” However, there are some instances in which an extended warranty might be worth purchasing.
Before you make a purchase, consider the possibility of purchasing the extended warranty, so that you know what you should do ahead of time. Think about the cost, and determine under what circumstances it might be worth it to purchase the extra protection. This is a decision you should make before you are caught off guard by a cashier or salesperson asking you if you want to get the extended warranty.
When to Consider Purchasing an Extended Warranty
There are some times that it makes more sense to purchase an extended warranty, or protection plan, than others. One of the most common reasons to buy an extended warranty is if you are buying something expensive, and you are concerned about the replacement cost. In the past, we have bought AppleCare to go with our desktop and laptop computer  purchases — and in one instance we were glad we had bought the service, since it covered the repair of my desktop when it unexpectedly died on us.
If you are the sort of person who worries when making an expensive purchase, an extended warranty can buy you peace of mind, as well as protection for your purchase. If the warranty plan is relatively inexpensive, and replacing the item would present financial difficulties, an extended warranty might not be a bad idea.
Understand the Terms of the Warranty
Before you purchase any sort of protection plan, though, you should make sure you understand the terms of the warranty. Find out what kinds of damage are covered. Some warranties will cover everything; these are the better deals. You don’t want to find that an accident voids your warranty after you put your Wiimote through the TV.
Determine what is covered, and whether or not it stipulates repair or replacement. Also, find out if the replacement could be a refurbished version of the item, or if it will be new. Find out how quickly you can receive your repairs or replacement under the warranty, and whether you will be expected to pay for shipping if needed. Some warranties come with so many stipulations and difficulties that it’s really not worth it.
In many cases, you might not need the extended warranty at all because of other considerations. First of all, find out how long the manufacturer warranty lasts. If you are likely to replace the item before that time — or shortly after — there is no reason to get an extended warranty. Your credit card may also cover items purchased. Find out the credit card policies before you purchase an extended warranty. Some cards will offer purchase protection even after the manufacturer warranty expires.
If you know that the time you purchase will be outdated soon, you might want to consider a buyback plan, instead of a warranty. In some cases, you can receive a sizable chunk of your purchase back to use toward an upgrade. That might be a better use of your extended warranty money when it comes to some consumer electronics.
(Photo: Balazs H )