Are Extended Warranties Ever Worth It?

Illustration of a white tablet with a heavily cracked blue screen floating inside a transparent blue bubble against a light blue background.

Listen and follow The Wirecutter Show

Apple Podcasts | Spotify | Amazon Music | YouTube | iHeartRadio

If you've ever bought a cell phone, an appliance, or any other high-value item, you've likely felt pressured to buy an extended warranty for peace of mind. However, these protection plans rarely pay off for most people.

In this episode, Wirecutter senior writer Liam McCabe explains why extended warranties are generally a “terrible investment,” how incredibly profitable they are for warranty companies, and the very few instances when paying for extra coverage might actually be worth it.

This episode covers:

  • The difference between manufacturer and extended warranties: A manufacturer's warranty is automatically included for free as a promise against defects (usually for 30 days to a year). An extended warranty, on the other hand, is an optional, extra-cost protection plan that you have to actively choose to buy.
  • Why you probably won’t use an extended warranty: People tend to overestimate the failure rate of most products. And the likelihood that the product will fail during the extended warranty period is quite low.
  • How extended warranties mainly benefit warranty companies: Extended warranty companies generally only pay out around 25% of what they take in, keeping 75% of the money. By comparison, health insurance companies generally pay out 80% to 90% to policy holders.
  • When it’s worth getting an extended warranty anyway: Sometimes it’s worth getting one of these warranties, even if you’ll likely lose money. It could make sense if it offers you peace of mind, the product has a bad reliability reputation, or you’re buying something for an accident-prone kid.


from Wirecutter: Reviews for the Real World https://ift.tt/FKMetuN
via IFTTT

Comments

Post a Comment

Popular posts from this blog

The Nugget Is the ‘Original Play Couch.’ Costco’s Version May Be Better.

Image
If you’re a parent of a child under 10, you’ve probably heard of The Nugget, the beloved play sofa that launched a thousand (well, at least 20) competitors. I’ve only recently discovered the category; but now that my eyes are open, play-cushion sets seem to be everywhere — even at Costco. I’m inherently skeptical of any product that claims to solve a need that I’m unaware of having. But, last summer, a junk collector hauled away our sofa, whose base had finally broken clean in half from eight years of my son’s intense, anime-inspired dance-jumping. It turns out we could’ve used a play sofa — and saved our couch  (as well as our cushions). The Nugget , the first play couch to widely popularize the concept, experienced viral popularity during pandemic lockdowns in 2020. It is also a Wirecutter favorite . Its modular design is simple: There are two long, hinged cushions and two triangular bolsters, all with removable, washable covers. And while The Nugget is arguably the most popu...
Read more

The 30 Most Popular Prime Day Deals, According to Wirecutter Readers

Image
Amazon’s summer Prime Day — which is now a four-day event rather than the usual two days — is well underway, and we’ve been working hard to surface the best deals for our readers. We’ve sorted through thousands of on-sale items to pinpoint truly excellent discounts on the things our experts have found are worth your time and money. Among the 500-plus deals we’ve posted so far —less than 1% of every discount we’ve reviewed — some have grabbed the attention of our readers more than others. Here are the 30 Prime Day deals that our readers have loved the most, including soft sateen sheets, a luxe leather tote, an investment-worthy blender, and more. from Wirecutter: Reviews for the Real World https://ift.tt/tDSahdQ via IFTTT
Read more

We Bought a 450-Pound Mystery Pallet Packed With Returned Goods From Amazon and Beyond. Here’s What We Found Inside.

Image
When I convinced my bosses at Wirecutter to spend over $700 on a 450-pound, 6-foot-tall cardboard box filled with hundreds of mystery products that had been returned to Amazon and other retailers, I assumed that what we’d find inside would be a revealing snapshot of what shopping looks like today. Anyone can buy these pallets stuffed with discarded products. For months, I’d watched content creators on social media giggle in excitement as they’d pull packages one by one from their own surprise boxes and rip them open, ceremoniously revealing a bevy of weird and wonderful items. A sparkly diamond ring! A cozy custom blanket emblazoned with the faces of a young couple! Some sexy (unworn) lingerie! I was certain that my own box would be a mix of great stuff, mediocre stuff, and some downright lousy stuff. My Wirecutter colleagues and I would use the items we found to meditate on product quality, manufacturing, and the retail life cycle. And we’d likely discover something interesting an...
Read more