Many times after the purchase of an item, we stuff the receipt and warranty information into an “important” place in case it is ever needed. Unfortunately, we often forget about the paperwork until the item is no longer working or experiences damage.
Keeping track of your warranties can save you money if you buy the correct type for your items. Unfortunately, some purchases can end up costing you more if you opt to use an extended warranty. The following is a list of three purchases that may save you money if you add a warranty as well as the type of warranties available.
Automobile And Auto Repair Warranties
When you buy a new car, a standard manufacturer warranty agreement is usually included. The automobile warranty varies, but for many manufacturers the warranty is good for three or four years or between 36,000 and 50,000 miles. You can also check with your dealership about extended warranties on new vehicles.
Should you bother purchasing a warranty on a used car? If you plan to drive the vehicle for a few more years, you can buy an extended warranty from the manufacturer or a vehicle service plan through a third-party provider. These warranties can cover unexpected expenses that are too expensive for many people to fix quickly, like an engine or transmission.
Home warranties are one of the most important warranties you should purchase. You can buy home warranties for up to 10 years. Depending on the details of the warranty, the homebuilder may place a warranty on any structural defects such as stucco, drywall, paint, HVAC, plumbing and electrical issues. The warranty may cover certain defects for a specific time period, such as one year for drywall and paint.
This is typically for new homes and does not include homeowner’s maintenance. Advantages of purchasing a home warranty are:
Peace of mind regarding the structural elements of your new home
The ability to transfer the warranty to new buyers if you decide to sell
Insured coverage even if your builder files bankruptcy
No litigation expenses during an arbitration process through the company between you and the builder
Major And Small Appliance Warranties
It might be cheaper to bypass the extended warranty on small appliances such as toasters and coffeemakers. Most of these are under a manufacturer warranty for a reasonable time period. It may cost you more to use the warranty for a replacement by the time you pay shipping costs. Replacing the small appliance after the warranty expires may be the more cost-efficient choice.
Major appliances, like your stove or washing machine, may be worth the extended warranty, either through the manufacturer or a third-party provider. Research the cost of a service call for the appliance and you may find the warranty is a better alternative, especially if your appliance costs $1,000 or more and the repairs will cost a few hundred dollars on average.
The Types Of Warranties Available
The Federal Trade Commission (FTC) states that a warranty is the contract between the manufacturer and the consumer stating the product will perform as advertised with standard use.
The FTC recognizes the laws for two types of warranties: implied and express warranties.
Implied warranties refer to the purpose of the product. If you purchase a dishwasher, you expect it to heat the water and thoroughly clean and dry the dishes at a controlled temperature. This is the implied warranty of merchantability.
An implied warranty of fitness for a particular purpose means the product sells for a designated use. If you want a dishwasher that starts with a one-button push and does not leave any water spots on the dishes, the company may recommend a specific model. If the dishwasher cannot handle the task, then the company is responsible for a breach in the warranty, even if the model performs other tasks perfectly.
Express warranties are explicitly stated by the company in the form of certificates or advertising. The law governing consumer warranties, known as the Magnuson-Moss Warranty Act, covers the written form of these warranties.
You can also purchase extended warranties on products that are too expensive to replace. Research the advantages and disadvantages of purchasing an extended warranty on certain merchandise.
A cellphone with an extended warranty may end up costing you more. Your out-of-pocket expenses may prove higher after you pay the cost of the extended warranty, the deductible for replacement and shipping costs. If the company sends you a refurbished phone instead of a new phone as a replacement, you may find that purchasing a new phone would have been less expensive.
Third-party companies offer extended warranties for manufacturers that tend to be less expensive than purchasing the warranty through a retailer. You can find these companies, like Square Trade, online.
As an incentive to members, some credit card companies now offer additional manufacturer’s warranties on merchandise purchased with their card.
You can keep track of your home, auto and appliance warranties easily by scanning the information into your computer or keeping a specified box for all the paperwork and receipts. Cash-register receipts tend to fade months after a sale, so consider making a copy of your receipt before adding it to the box. There are also several mobile apps available to help you buy warranties and manage receipts.
Choose the type of warranty and keep track of your paperwork to save money in the long run for your purchases.