Why Extended Warranties Suck; Never Buy Them

Why Extended Warranties Suck; Never Buy Them

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  1. SEAN L on October 8, 2020 at 11:17 pm

    Not sure if my situation is relatable, but I own a forestry company and bought a ford raptor in 2013, I purchased a $5000 Endurance 10 year unlimited mile warranty with a $300 deductible when the truck was brand new online. Since then I had blown 2 engines, bottomed out my suspension 3 times, and put 250,000 miles mostly off-road on it. Best financial decision I had ever made. Then again, I did buy the warranty because I knew the truck was going to be driven fast off-road and abused. Best thing about extended warranty is that unlike insurance, your premiums will never go up, and the company cannot cancel your policy unless they go out of business.

  2. Gio Mercado on October 8, 2020 at 11:17 pm

    I used to work at Best Buy, and yes he’s 100 spot on!

  3. kiwi8476 on October 8, 2020 at 11:18 pm

    Should I cancel my warranty on my car and also cancel it on my MacBook? Aka, AppleCare? I mean, on the car probably should but MacBook? 🤔

  4. Isthisappropriate on October 8, 2020 at 11:23 pm

    I will say that i work for bestbuy and disagree. There are plenty of reasons to get warramties on laptops and things like that because of accidental damage protection

  5. Scott P on October 8, 2020 at 11:23 pm

    I bought a Ford truck some years ago. Purchased a warranty which cost me 2,800 all said and done. The truck was pristine, at a dealership, was “certified pre-owned”, clean carfax, all the right boxes were checked, had every piece of paperwork ever but I got the warranty because it’s the one vehicle I didn’t want to have out of commission longer than necessary while I found time to fix it rather than just take it in.

    In eight months Ford put over $11,000 in repairs over the span of seven weeks to the truck. The timing chain failed four days into ownership. Turbochargers, various leaks, the full gamut of issues.

    The warranties aren’t all bad.

  6. Miguel Sandoval on October 8, 2020 at 11:23 pm

    If you buy a bmw, or European car get it. They are unreliable after 4 years. Other than that don’t need it

  7. R B on October 8, 2020 at 11:25 pm

    This is a YMMV situation. My wife bought the extended warranty on a Jeep Cherokee Laredo and it has paid off in spades. Of course, Jeeps aren’t the most reputable brands so it was a good insurance policy to have. She’s had a lot replaced under warranty and only paid a $100 deductible on each repair, mostly the technology components of the car.

  8. Kakusei on October 8, 2020 at 11:26 pm

    I lose commission if you choose to finance. I am in audio video sales.

  9. Reinaldo Dejesus on October 8, 2020 at 11:26 pm

    Front suspension work is not cheap , 1 ball joint replacement is between 400 and 500 dollars , unless you know how , your at the mechanics mercy .

  10. Robert Campbell on October 8, 2020 at 11:27 pm

    About 30 years ago, a friend of mine bought an extended warranty on the conversion van he bought. He tried to make a few yeats later and he got burned. The warranty was not issued by General Motors, but a third party warrantor. The warrantor went out of business and my friend had zero coverage.

  11. jimmy_t on October 8, 2020 at 11:27 pm

    I got an extended warranty on my college education. Big rip off!!

  12. Milo Tay on October 8, 2020 at 11:28 pm

    I bought a new Electrolux fridge freezer on Ebay. When I phoned 4 the 10 warranty, they wanted £2.69 a month, this is 2 cover 4 the engineer’s cost 4 the 9 years after the 1st years main warranty. By 6 years later,
    I could buy another fridge. An engineer cost £110-, that’s 1/2 or over 1/2 half the price of a new fridge.
    It’s insurance rip off.

  13. RD S on October 8, 2020 at 11:28 pm

    NEVER buy a warranty on a disposable item…..that item that if it breaks you’ll most likely toss it out and buy another. Stereos, TV’s, etc etc.
    Buy them if when it has a major issue, you cannot afford to toss it out.
    Pretty simple decision actually. His answer should have been "It depends".

    Example: I have owned over 30 cars. Never had an extended warranty. Never needed one.
    Now, I am newly retired (car paid off 100%), and I want to travel extensively by car. I am at a point in life where a major mechanical problem would cause me some heartache and inconvenience………especially on the road somewhere trying to enjoy life.
    So I bought an extended warranty from the manufacturer….120,000 miles on EVERYTHING.
    Now….I just drive and have fun. Easy.

  14. nemoz_wrx on October 8, 2020 at 11:31 pm

    Excellent video. Explained perfectly. Thank you sir 🙏

  15. Kuya Arbee on October 8, 2020 at 11:31 pm

    wait 180 dollar repair….. are you not considering labor costs…… smh. Warranty depends on the car and make etc. If people and businesses are here if not making for profit then how would the free market exists. For every demand there is a price. Yes its up to the consumer but there has been times where extended warranty does work

  16. wierdawgg on October 8, 2020 at 11:32 pm

    That is great definition quality.

  17. Bob nob on October 8, 2020 at 11:32 pm

    0:44 because the failure rate is 12% you’re saying that 12% of the money is paid back out on repairs? That completely depends on the cost of the repairs and the pricing of the warranty.
    If a company sells items they buy from a manufacturer and they also have a company that does repairs they could sell a warranty and repair it themselves.
    So when you come back to the store after it broke it would be better for the store to repair that item for you and get all of that money, rather than selling you a new one and the manufacturer getting a cut of that money. With that in mind they could set a price for the warranty that benefits both them and the customer because they would not necessarily have the manufacturers costs or profits to consider.
    Why would you not buy that kind of warranty?

  18. SK Lewie on October 8, 2020 at 11:33 pm

    I bought a car then cancelled the warranty then a month later my whole power steering system went out that cost me 2500$ 😫

  19. 64Jethro on October 8, 2020 at 11:33 pm

    I purchased a used Honda from a dealer that offers free powertrain warranties. 30k miles later, the CVT transmission died. That warranty save me $5000.

  20. Matthew Christy on October 8, 2020 at 11:37 pm

    What about a home warranty? Does Dave have any videos on that?

  21. Andrew Mishler on October 8, 2020 at 11:38 pm

    Thank you
    I just got suckered into buying a extended warranty through clear path.

  22. LEE WALKER on October 8, 2020 at 11:40 pm

    Those banksters and politicians have guarantees because the can legally STEAL and create money/loans (stealing) and it’s all enforced by GUNS.

  23. Doug Gentry on October 8, 2020 at 11:41 pm

    My extended warranty saved me over 10,000 dollars over 150,000 miles

  24. James Esquenazi on October 8, 2020 at 11:42 pm

    Im cancelling my home warranty today. My a/c went out in the middle of July the company they gave me was out of business. And it took 4 days to finally get someone out here. The other problem is they out band aids on things instead of really fixing them. Been spending $60 a month that’s money spent elsewhere.

  25. Craig Jones on October 8, 2020 at 11:43 pm

    Sorry buddy, you sound stupid, if you buy a used car you better get a warranty past the manufacturer warranty.

  26. Richard Bott Slots And More on October 8, 2020 at 11:46 pm

    Awesome videos..Always learn from your content…..Thank You!!

  27. M C on October 8, 2020 at 11:47 pm

    I’m with his statistics but I don’t think his numbers are 100% correct. Extended Powertrain Warranty was quoted to me for $2500/5yr and no repair costs just a couple hundred like Dave says. God forbid, if engine or transmission needs repair, that’s easily $5000 or so with labor. So I wish he addressed that in this video.

  28. Antonio on October 8, 2020 at 11:48 pm

    I gotta extend warranty with my financed car. it’s 2009 impala with under 60k miles. had it almost 2 years now. almost finish paying off. my warranty paid over $3k worth of repairs so far. it’s just a long annoying process. you gotta have patience.

  29. Ken De Silva on October 8, 2020 at 11:51 pm

    Doug DeMuro says one of his favorite cars is a Range Rover. He bought it from car max bc he could buy an extended warranty. It cost him 3,600 but replaced 20k of parts.

    Recently, I did the same thing but they increased the price to 10k. Still bought it for the peace of mind, plus, I really do expect to use it on the air suspension which is 8k and will wear out.

    Edit: warranty is 6 years for 125k mikes and is bumper to bumper with 0 deductible.

  30. Andrew Salazar on October 8, 2020 at 11:52 pm

    I bought a $4000 extended warranty for my Ford Focus. It’s on its way to pay for itself because WOW I got myself a donut.

  31. Simon Saucy on October 8, 2020 at 11:55 pm

    So with this extended warranty philosophy still apply to something like a GoPro where you’re constantly breaking it where it might be worth an extra $20 to get free replacements on it if you know you’re going to be breaking it

  32. songbird372 P on October 8, 2020 at 11:55 pm

    When u bought that case, did u say do u know who i am!?

  33. sjr341 on October 8, 2020 at 11:57 pm

    I used to work at Circuit City. If you didn’t sell the extended warranty then you’d be scolded.

  34. Hero of Culture on October 8, 2020 at 11:58 pm

    Wrong… not always. Youre sometimes right, perhaps. I got my money back so much on warranties, i cant even begin to tell u, mr woke guru

  35. gummywurms226 on October 8, 2020 at 11:59 pm

    I Worked at Sears over 6 years ago. I bought a $3500 display fridge for $1600 spent $500 for a Repair agreement. Get the fridge delivered and it has a leak. Call service, they say it need to be replaced. Get a brand new $3500 fridge. Sometimes it just pays to get it. The problem with advice is it isn’t black and white. I’d hate to know what would have happened if I didn’t get the repair agreement. Yes I have been burned before, but in the long run I’ve come out ahead.

  36. WanSkee on October 9, 2020 at 12:01 am

    The money the companies making selling this is true but what cars on 2020 have $200 repairs??? That’s not logical and the cost of these repairs are getting higher by the day with the newer technology being added to these vehicles….

  37. Lisa Smith on October 9, 2020 at 12:02 am

    Dave my new Subaru Crosstrek at 15,000 miles needed a new transmission $7k was covered. now at 18,000 miles transmission survo went out $400. Now it’s 2 years and 8 months old 19,000 miles (I don’t drive much). I’m 19 DO I SPEND $ 1500 at Subaru and get a factory warranty 8 years or 100,000 miles or sell the car ?

  38. Caleb A on October 9, 2020 at 12:02 am

    Just bought a car yesterday and turned down the $2100 extended warranty. The finance lady was really working me over on it and I almost gave in. Glad Dave agrees that extended warranties are a rip. Now I guess I just have to wait and see if I made the right decision, lol.

  39. Mr. Z on October 9, 2020 at 12:03 am

    The only warranties I like are the ones I don’t have to pay for them. Like costco gives out warranties and even credit cards extend warranties (though you should heed control when using credit cards). I have used warranties in the past and they are great. But buying extended warranties most of the time is a waste of money.

  40. Derrick Bonsell on October 9, 2020 at 12:03 am

    People apparently don’t understand what an average is.

  41. sirodic on October 9, 2020 at 12:04 am

    Lol, my Passat needed a new engine.. 3k plus 1200 from rental car Bc the vehicle was in the shop for a month.. if I add 20-60 dollars a month on my payments I would of been at a better place with a warranty. Oh and I happen as the worst time. Don’t self insure a car with a loan.. this is crazy talk

  42. Darryl Williams on October 9, 2020 at 12:04 am

    For what its worth. They said gap insurance was 750$. I said no. He pretended to look in a file n said employee discount i can sell it to you for $350. Not a warranty but always say no to the first offer. You can always get it at that price later.

  43. lucus lopez on October 9, 2020 at 12:04 am

    Well if you have an Apple product the probability of it breaking are very high.

  44. Mike Buchan on October 9, 2020 at 12:05 am

    My company makes $0 on ac , furnace extended warranty, it’s all supplied by the manufacturer and doesn’t cost me or the customer anything extra. They have only to register online for the additional 5 years. I know nothing of warranty companies that push extended warranty for a price though.

  45. Mike juba on October 9, 2020 at 12:08 am

    I understand everything you’re saying Dave, but these modern cars are getting insanely expensive to repair, and insure for that matter, especially when everything but the ashtray is computerized and fewer technicians are able to repair them. I was one of the lucky (or unlucky) ones to get back every penny on my extended warranty when both head gaskets needed to be replaced. (different times). I won’t buy another one but lucked out the one time I did. Keep up the great work.

  46. Andrew Williams on October 9, 2020 at 12:10 am

    I typically only purchase warranties on items I don’t have the money to replace at cost if it were to break. This is usually something like a major appliance, but if it’s something like a video game console, then no I’ll just replace it.

  47. ie1Xt4 on October 9, 2020 at 12:11 am

    This may be the case for many many products, however I personally purchase and use the Best Buy warranty A LOT for expensive headphones and portable speakers, which are very likely to break down within 2 years of normal use anyway. Rather than spend $150-$300 every 2 years to replace the item, I simply return the "broken" product for the latest shiny brand new model and spend only $30-40 to insure the item again. The employees literally do not care what the reason for the return is, whether it broke due to normal wear and tear, if I was clumsy and broke it myself, or if I just got tired of it and wanted the new model. Usually I tell them the item has either broken or degraded over time (which is technically true, cables get frayed, speaker drivers wear out, batteries don’t hold a charge as well as it used to, etc.) and they don’t even flinch, especially after I tell them I’m just going to re-insure the replacement item again anyway which I guess to them makes their warranty quota look good. Using this method I’ve literally saved 5x the money since the original product purchase almost 10 years ago because I didn’t have to fork over the full retail price each time I needed to replace the old/broken item. So yeah, that’s my life hack!

  48. Phillip Dominguez on October 9, 2020 at 12:11 am

    I love Dave Ramsey but I HIGHLY disagree. I got an extended warranty on my used car for $950 and it broke down right away. My warranty covered the $4000 dollar transmission repair! Otherwise Dave’s advice is a God send!

  49. Daniel Teunissen on October 9, 2020 at 12:12 am

    Extended warranty or protection plan are B s 98 % of tvs die because of a broken screen or water damage the tv will run for for almost forever now days guess what the protection plan don’t cover broken screens or water damage so it’s a waste of money if the warranty covered accidental damage and broken screens it would be worth it. But it’s not

  50. Billy Smith on October 9, 2020 at 12:15 am

    agree with Dave on this one ,wow go buy a car they really push warranties hard BIG time !!!I hate it !

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