Should You Buy Extended Warranty -

If a $2,000 engine or transmission repair would be a financial disaster, paying a smaller, fixed amount for a warranty functions like an insurance policy. When to Skip It

Avoid buying the warranty at the moment of purchase for new cars. You won't use it for several years while the manufacturer's warranty is active, and you can usually buy it later. The "Self-Insurance" Alternative should you buy extended warranty

If you are buying a product with a proven track record of durability, the statistical likelihood of needing a major repair is low. If a $2,000 engine or transmission repair would

For many consumers, the cost of the warranty exceeds the likely cost of repairs. However, it can provide significant "peace of mind" for those who cannot afford a sudden, large repair bill. The "Self-Insurance" Alternative If you are buying a

Items with complex electronics or proprietary parts (like electric vehicles or high-end appliances) can be prohibitively expensive to fix out of pocket.