Clark Howard's Two Word Extended Warranty Advice Has No Exceptions

"Extended warranties are statistically designed to benefit sellers, not buyers. According to Consumer Reports survey data, warranty buyers paid an average of $1,000 for coverage that provided just $700 in benefits, resulting in a 30% loss. Even more striking: only 1 in 10 people who purchase extended warranties ever use them, meaning 90% of buyers pay for protection they never need."

""The answer is no, they are not worth it," Clark says on his website. "You should not buy them. I cannot think of an exception." This holds true whether you're buying a car, appliance, or electronics. Most products already include manufacturer warranties covering defects during the period when failures are most likely. Extended warranties typically kick in after this initial coverage expires, when you're past the highest-risk window."

"One Reddit user shared their experience canceling a $3,300 extended warranty on a 2019 Subaru Forester just four days after purchase. Despite dealership staff who "were pissed" and said "this never happens," the couple secured a full refund. "We ended up deciding we'd rather cancel and save the 3k for a future repair rather than pre-pay for one that might not happen," they wrote. Their vehicle already had a manufacturer powertrain warranty at no extra cost."

Extended warranties are structured to favor sellers and often provide less value than their cost. Consumer Reports survey data show buyers paid an average of $1,000 for coverage that delivered only $700 in benefits, a 30% loss, and only 10% of purchasers ever use their warranties. Manufacturer warranties typically cover defects during the highest-risk period for new products, while extended warranties begin afterward. Many consumers can save money by canceling unnecessary warranty purchases and building an emergency repair fund instead. A real-world example involved canceling a $3,300 Subaru extended warranty within days and receiving a full refund.

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