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Sunday, June 2, 2013

Extended Warranties

An extended warranty, sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers when they purchase a vehicle. While you want to get as much value out of your new purchase as possible, is it necessary to purchase an extended warranty?
Keep in mind that in most cases the manufacturers warranty is sufficient. A typical manufacturers warranty lasts a year and if something is going to happen it’s typically in the first year or much later after the extended warranty has expired. The other issue with Extended Warranties is the fine print, they often don’t cover much, so you’re stuck with the cost anyway. If you want to purchase one of these for your own peace of mind, be sure to read all of the terms and conditions. Consumer Reports has done studies on repair rates for a variety of small electronics and home appliances, and the percentages range from 5 to 37 percent, which generally indicates that you're more than likely not going to need a repair. Wouldn’t it make more sense to start an auto repair savings account and put that money aside for repairs if you need them in the future?

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