Men's Life Today: Expert Q+A

I never know whether to accept an extended warranty offer. Are they a smart move or a waste of money? Or does it depend on the product?

Often, warranties are just a way for merchants to collect cash for services they probably won’t render. Here are five good reasons why you should pretty much always say “No” to an extended warranty:

1. You don’t know who’s going to fix the product.
Sometimes the retailer who sells you the product determines who fixes it -- and it’s not always the manufacturer. This is not a good position for you to be in. Their people may not be available to repair your product right away. You may even have to wait months for satisfaction.

2. The product may not be worth it.
When considering a warranty, consumers often make the mistake of not taking into account the cost of the original product. If you’re buying a $20 low-end electronic device, what’s the use of forking out the same amount for a five-year warranty? You’re better off just buying a new one when it breaks.

3. The underwriter may go belly-up.
A merchant may have a warranty repair contract with an independent agent company that goes out of business. If that’s the case, the merchant may not have an obligation to fulfill your repair contract. The end result? You’re out of luck.

4. The fine print may come back to bite you.
Close examination of the fine print will often reveal that the parameters of the coverage don’t allow for the specific repair you need. In addition, a retailer will always examine the item, and if there is any kind of external damage (a scratch or a stain -- not unusual after using a device for a couple of years), that may also void the warranty. In essence, they can basically make up the rules to fit their purpose.

5. You may already be covered.
If the manufacturer’s warranty is for one year, and you purchase an extended warranty that runs concurrently and offers the same repair value, you’re basically wasting your money for the first year. After the first year, it becomes increasingly likely that you’ll inadvertently void the contract (see No. 4, above) -- or you may just be ready for an upgrade.

The best advice? Pay with a credit card that allows you to double the manufacturer’s warranty, without any additional cost to you. And this goes without saying, but try to take care of your stuff. -- As told to Mike Hammer