Have you ever sat in the business office of any car dealership and felt overwhelmed about the sales process? That is understandable, I have been in the business for more that 27 years and I am torn between worthy product and fluff at times.Ladies it makes since to study the products that are offered in the business office BEFORE you ever enter into the final transaction. Do your research! Here is a question often asked. No one can or should answer the question for you. When you look at your life style, consider your budget, and the cost of replacement what makes you feel most secure.
Are tire replacement warranties worth the money spent? Here is what one economist had to say….
The Economics of Tire Warranties:
An article from the Washington Post by Terence O’Hara explains the economics of extended warranties and purchase protection plans in general. It is quite fitting for road hazard warranties. He writes:
“The decision to buy an extended warranty…defies the recommendations of economists, consumer advocates and product quality experts, who all warn that the plans rarely benefit consumers and are nearly always a waste of money.
‘[Extended warranties or purchase protection plans] make no rational sense,’ Harvard economist David Cutler said. ‘The implied probability [of having an issue with the product] has to be substantially greater than the risk that you can’t afford to fix it or replace it. If you’re buying a $400 item, for the overwhelming number of consumers that level of spending is not a risk you need to insure under any circumstances.’”
In short, road hazard warranties are a waste of money. Don’t insure that which you can afford to replace.
*Any thoughts, opinions, questions?