Extended warranties

Just as you're preparing to pay for your new car, fridge or computer, the salesperson may stall you for a moment by offering you an extended warranty.

Extended warranties generally cover repairs, and sometimes service on the item you've just bought, once the guarantee has come to an end.

Top tips

  • It helps to research items you want to buy carefully before buying them. If you're choosing the most "durable" product, an extended warranty may be unnecessary since the odds of it breaking, according to your research, may be relatively slim.
  • The salesperson tends to get paid a commission for selling an extended warranty. Their praise of your purchase quickly changes to fear and doubt about how long your purchase will last. The extended warranty sales technique makes you doubt the reliability of what you just bought so you will fork over the extra cash on an extended warranty.
  • In all cases, it's important to read the small print of an extended warranty before taking one out. These can be very complicated documents with many exceptions that void the warranty. Don't rely on a salesperson's description of the warranty, and although it takes time, actually read it through, and pay close attention to any exclusions.

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