Are Auto Extended Warranties Worthwhile?

Auto extended warranties are just one of many of the extended warranties that are sold for just about every product imaginable. There's always the worry that the product will go bad, and it'll cost a ton to get it repaired. A good salesman can always convince you that an extended warranty makes sense.

Clark Howard is a famous consumer advocate who has a popular syndicated radio show about helping people save money and avoid getting ripped off. In addition to his show, his website offers lots of tips. One section is on Extended Warranties. For most products, Clark advocates against extended warranties. This is especially true for computers, printers, and other computer peripherals which go down in value very quickly. The amount you spend on an extended warranty will likely be able to buy you a whole new product in 3 years.

However, for cars, Clark is neutral on the manufacturer's extended warranties. He prefers auto extended warranties from the manufacturer since it's pretty much guaranteed that they'll be there when you need them. The only problem that I have with the manufacturer's extended warranty is the cost. To extend my warranty just for two years, GM was going to charge me anywhere from $500 to $1000 depending on the policy. That's why I looked elsewhere. But I still remember Clark's advice, and that's why I wanted to get as much information about the auto extended warranty company as I could.