Would You Like To Add The Extended Warranty?

When you're at the checkout counter and they ask, “Would you like to add the extended warranty?”—it’s tempting to say yes. You’re already spending money on a new appliance, laptop, or phone, and the idea of protecting it “just in case” sounds like the smart thing to do.

But here’s the truth: most extended warranties are more about your peace of mind than actual value—and they often don’t pay off.

Let me explain why I never pay for extended warranties and never have, and what I do instead that actually saves me money.

Never pay for an extended warranty

Extended warranties do not have any actual value

The Reality of Warranties

Manufacturers typically offer a standard one-year warranty that covers defects or malfunctions. That’s usually enough for most electronics and appliances. Usually, if an item is defective, it will appear within the first year. Extended warranties, on the other hand, can cost anywhere from $30 to $300 depending on the item—and often come with fine print, limited coverage, and hoops to jump through when something does go wrong.

In many cases, the cost of the warranty is close to what a basic repair would be, or the item becomes outdated before it ever needs servicing.

What I Do Instead: My “DIY Warranty Fund”

Instead of handing over money to the store or manufacturer for a warranty, I put that money into a separate savings account I call my “Warranty & Repair Fund.” Usually, you can open an online e-savings account at your bank. Some banks offer a high interest for these types of online accounts. Here’s how it works:

• I skip the extended warranty at checkout.

• I mentally note what the warranty would have cost.

• I transfer that amount into a small savings account I’ve set up for unexpected repairs or replacements.

Let’s say I buy a new microwave and decline a $49.99 extended warranty. I move $50 into the fund. That way, if something breaks, I’ve already set aside money to cover it. If nothing breaks? Even better—I keep the money!

Skip the extended warranty

Transfer what you would have paid for a warranty into a bank account specifically for repairs

I don't buy a warranty even for big items, like a refrigerator. Most companies that produce appliances offer a one-year warranty. Usually, problems will show up in that first year. I had that issue with my LG refrigerator. (Side note: I will never buy LG appliances again.) The fan kept breaking down. It was replaced three times. The warranty expired the third time I needed the fan repaired, but I argued with the company that this problem was ongoing. They ended up fixing it for free, and it has remained in good working order this time. The last repairman seemed to do a better job than the first two, which makes me think (with my suspicious mind) that they don’t fix the repair properly, so the appliance keeps breaking down, and then your warranty runs out of time, so you have to pay. The last repairman even questioned why the fan kept breaking down and why it wasn’t fixed right in the first place. Don’t let them get away with this if the repair has been an ongoing problem.

Most of the time, things don’t break within the extended warranty window—and if they do, you’ll be surprised how often a small repair is cheaper than the cost of the warranty. Not to mention, that the replacement of that item can sometimes be cheaper than the actual warranty a store offers you.

The Bottom Line

Extended warranties are like insurance—and insurance only makes sense when the risk is high and the cost of failure is more than you can handle. For most everyday purchases, skipping the warranty and starting your own small “just in case” fund can save you money in the long run.

So next time you're offered that extra coverage, think twice. Then move that money into your Warranty & Repair Fund and feel good about making a smart money move.

Have you ever paid for a warranty and regretted it—or skipped one and wished you hadn’t? Share your experience in the comments!