Extended warranties: are they worth it? [Video]

If you’re reading this, you’re likely considering an expensive purchase or have recently been offered an extended warranty from a store or sales rep after making a purchase.

Extended warranties aren’t a new concept, by any means. Car and appliance manufacturers have offered them for decades. Today, however, it seems like extended warranties are offered for almost every small electronics purchase. Just the other day, I was offered an extended warranty when I purchased a $50 set of headphones.

Are extended warranties ever actually useful, though? Below, I’ll explain some benefits and drawbacks of extended warranties, and share my thoughts on which warranties can truly be useful compared to the multitude of overrated ones.

Regular vs extended warranties

As the name implies, an extended warranty is meant to pick up where a product’s factory warranty drops.

For example, many auto manufacturers offer a standard 60,000-kilometre warranty on vital components.

• The information you need to …