Extended warranty experiences

valhalla360 wrote:

RetiredRealtorRick wrote:

Buzzcut1 wrote:
In all the purchases I have made since my first vehicle in 1975 I have never purchased an extended warranty. I have never regretted not doing so. Its a scam IMHO. I will not be buying one in the future either

First off, just for the record, most of these are not extended "warranties", as a warranty is issued by the manufacturer. They are "service contracts", which usually have nothing to do with the original manufacturer.

That being said, service contracts are purchased and serve the purchaser much like auto insurance or health insurance -- you hope you never have to use it, but if you do, you're glad it's there.

Being in the automobile business for 30 years, then in the Real Estate business for another 12 years, I have seen many, many of these service contracts pay out hundreds of thousand dollars to purchasers over the years, and I have had scores of auto buyers and home buyers share stories with me of how happy they were that they made such a purchase.

So is it a scam? No more than your auto insurance or health insurance is a scam.

The difference is auto/health insurance is heavily regulated (and still problematic). These are profit making schemes that have very little to do with protecting the buyer.

You could as easily point to lottery winners and say the lottery is a great way to get rich...ignoring the horrible odds.