Extended Car Warranties Are A Ripoff

Most consumers spend more on extended warranties than they get back in repair savings, according to a Consumer Reports reader survey. On average, buyers paid $1000 and got $700 back in the amount of money they saved in repair costs.”Extended warranties sell costly ‘peace of mind’ for repair nightmares that probably won’t occur,” said Rik Paul, automotive editor, Consumer Reports. “Sellers know what tends to break, and in most cases consumers are betting against the house.” The only one with a peace of mind is the dealer as he tallies up his profits. Consumer Reports instead recommends putting the money you would have spent on an extended warranty into a money market or mutual fund to insure against the unlikely event of big repair costs from parts failure.