3 Myths About Warranties That Are Costing You Money

Warranties are not a sexy topic, but the promise of protecting your most favorite stuff can be an attractive proposition.

Are warranties really worth it? And, are all warranties the same?

Consumers are outfitting their homes, which now also function as classrooms, office space and gyms, with the latest and greatest personal electronics, equipment and devices to keep life moving in our “new normal.” But here’s the problem: a lot of big box retailers are pushing customers to buy overinflated warranties on things like iPhones, laptops and Pelotons. These retail warranties are often not a very good deal for consumers.

If you’re not careful, you could end up paying too much for a warranty that won’t really help you if something breaks.

Here are 3 myths about warranties that may be costing you more money, with advice on how to save.

Myth #1: Buying a warranty from the retailer is your best choice.

Truth: Big box retailers are making big profits off of warranties. Did you know that the average retailer marks up warranties up to 900%? We’ve all been there, especially if you’re in a big box retail showroom, it seems like the sales people know just how to put the pressure on you to sign up for the extended warranty - especially at the point of purchase.

But don’t do it! You don’t have to sign up for the big box retailer’s warranty - nor do you have to purchase a warranty the day you purchase the product. There are other options like Upsie that offers lower-cost extended warranties on products like laptops, iPhones and more. They even offer the same protection as Apple Care but their deductibles are cheaper, resulting in much less overall cost - and will cover things like accidental pool plunges as we enjoy our final dog days of summer, toilet mishaps, used devices and more.

Myth #2: You cannot buy a warranty for refurbished or used products.

Truth: Buying a previously owned product does not mean you are not eligible for a warranty. In economic hard times like now, it can be a smart money move to buy used or refurbished and doing so does not mean that you cannot get coverage you need.

For example, as kids ease into e-learning, opt for a refurbished laptop which can provide you hundreds of dollars of savings. There are great options that are kind to your pocketbook while giving you much needed peace of mind. Just look for warranties that cover used and refurbished products beyond the more costly manufacturer protection options.

Myth #3: Free isn’t always free.

Truth: Always be skeptical of free protection. After all, free isn’t always free. For example, some credit card companies will give you built-in extended warranties for free if you use their card to buy certain products. However, pay close attention to the fine print as there may be limitations of your card’s coverage. For example, some credit cards won't cover used or antique items, computer software or items purchased for resale. Or, your purchase won’t be covered at all.

In short, don’t fall for these common warranty myths. Know the facts and make a well-informed decision when you make a purchase.  In the end, you will save money and still get the protection you need.