smart spending

Are warranties worth the peace of mind?

He begs to differ with warranty critics, particularly on pricey toys like tablet computers or e-readers. "You're carrying around a quite-heavy piece of glass that you wouldn't have to years ago," he says.

Don't drive away with one

What about cars, which you may own for years and are certain to require service? Extended warranties are often touted as a long-term financial stabilizer.

Actually, it's the dealer getting the deal, says Graham Lapolla, owner of AutoQuire, an Atlanta company that locates vehicles for buyers and negotiates sales terms.

"Most of the time there's really no value in getting an extended warranty," he says. "It's really not a good deal."

For starters, they aren't used 95 percent of the time, he estimates. Most major problems happen after a car hits 100,000 miles. Manufacturers' defects are often corrected free via recalls or under the original warranty. Buying a well-built car is money better spent, Lapolla says.

Giorgianni issues another warning to the warranty-wary: You may be duplicating coverage you already have.

  • Buying with a credit card often extends a manufacturer's warranty. But put the full purchase on the card; paying partly with cash or a gift card will void the extension, he says. Your homeowners insurance may have you covered, too.
  • Then, there is an area of law called "implied warranties.'' An implied warranty maintains a product must function as a reasonable person would expect for a reasonable amount of time. So if a printer expires just after the two-week warranty does, consumers can still get a refund.

Giorgianni offers a final option to help you sleep: self-insure. Estimate the cost of eventual repairs and set aside money each month to cover such contingencies. It will run less than a warranty, which includes the retailer's markup. If you need cash for a different emergency, it's there for you.

"You're acting like your own extended warranty, and you can overcharge yourself,'' says Giorgianni. "It's great."

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