Extended warranty plans are generally known as being bad deals for consumers. But how specifically are they bad? An insider who works, begrudgingly, for an extended service plan company lays out some of the worst extended warranty deals to watch out for when shopping this holiday season.

The insider writes:

1. Target’s “2-Year Replacement Plan for products under $200”
* “Begins Day 1 BUT, most electronics have a 1 year warranty. This is a Year 2 only extended replacement plan as the plan administrator just refers you to the manufacturer in year 1. There is no damage or liquid spills coverage.
– Instead, use an American Express or other premium card and you will get a 2nd year warranty without paying extra.

2. Toys R’ Us “Buyer Protection Plan” for Toys under $300
* “Begins Day 31” and is for “15 months.” Soo, you mean a 14-month plan? If the toy has a 1 year warranty, and the plan administrator does not duplicate manufacturer warranty coverage, then you’re really just buying two extra months.
* Accidental damage is NOT covered. Other than batteries dying, what else happens to toys?

3. Lowes and Home Depot “Replacement Plans for Power Tools, typically under $200 or $300
* Dewalt tools carry a 3 years parts and labor warranty.
* Milwaukee tools carry a 5 year parts and labor warranty.
* Hitachi lithium series tools carry a 10 year parts and labor warranty
* Damage and batteries are not covered and if you are a contractor, there is a commercial exclusion.
* Lowes and Home Depot will offer “Replacement” plans for these tools, a 1 year extension beginning AFTER the mfr warranty. Another bum deal.

4. Best Buy, Staples and Office Depot offer “2 year Premium” plans on $449 laptops that cover Accidental Damage
* Manufacturers have 1 year warranties. Therefore, plan administrators take ZERO liability for any electrical or electronic failures in year 1. (Before the sycophants harp, power surge protection is all hype as there are statistically no incidence and no claims).
* Best Buy charges $199
* Staples charges $239
* Office Depot charges $159
* That’s 44%, 53% and 35% of the selling price of the laptop, respectively. Not a great bargain.

5. Any lawn tractor or snow blower extended plan
* This equipment comes with a 2 year or 3 year warranty.
* Extended warranties add a 3rd and/or a 4th year. So what?
* Blades, belts, damage, oil level issues, other maintenance items not covered.
* Used once a week or every other week for mowers and seasonal for blowers, this equipment will last quite a long time. Any manufacturing issues surely get flushed out in years 1 and 2.

Now you have the know-how to rebut these extended warranty “deals.” Now, here are the 9 most common extended warranty sales pitches debunked.

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Insider Debunks The 9 Extended Warranty Sales Pitches

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