Are Extended Warranties Worth It? Experts Urge Caution When Deciding
OMAHA (KPTM) - You might think an extended warranty for your car will give you peace of mind, but consumer specialists warn they can actually turn into a headache if you don't read the fine print.
"It used to be just an extension of the manufacturer's warranty, but today you might be buying something that offers several levels of service," said Dr. William Duckworth, a Creighton University business professor.
As travelers get ready to hit the road this busy Labor Day weekend, some people may think extended warranties are ultimately the best option, but once you sign up do you really know what you're getting and what you're protected against?
"Even just the wiring and the switches and the lights, you might find that the wire is covered, but the switch that's hooked to the wire isn't, so those are the kinds of things you'll want to look for," said Dr. Duckworth.
It's not just the loopholes that can put you in a tough spot either. A study by Consumer Reports found 42 percent of extended warranties were never used. Those who did wound up paying more for the coverage than they did in repairs putting the average customer behind almost $400.
"When you see calculations online where people say to never buy an extended warranty they're always a bad deal or you should always buy one they're a good deal, I mean the truth is somewhere in between for individuals," said Dr. Duckworth.
Something else to consider before you sign on the dotted line is the legitimacy of the offer. The Better Business Bureau says it's received complaints about extended warranty scams, so it recommends checking with your dealer first before accepting the offer.