Quote:
Originally Posted by jmciver
Quote:
Originally Posted by Resjudicata
I'm kinda with. jmciver on this one. From an economic stand point it's always better to self insure. And usually warranties aren't a great deal.
They usually factor the worst everything can go wrong, add premium labor costs, and then add an opportunity cost like a high interest rate to get their price. That's before any bonuses or kickbacks for those who sell the policies. Add in that you usually have to pay a minimum fee and/or something might not be covered; and it's normally a bad a deal.
As a regular guy with a couple degrees on the wall, I take a couple $ per month and put it into a Savings account, and every year put most of the unused part into a Laddered CD plan. That monies will always be "earmarked" for my insurance and warranty needs. And it's mine and earns 2% interest right now for me.
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Good point (and idea) regarding the "self insure" planning - something I have never done in the past, but considering it going into the future. So for the consideration of the OP, take a look at how much your monthly payment increases when you add the extended maintenance plan. Then instead of getting the extended maintenance plan, dump that "extra" amount into an interest bearing account like Resjudicata mentioned, and go from there.... |
exactly!
The key is to have the discipline to only use that money for repairs or "emergencies". It's tempting to use it for a vacation or something else, but if you're disciplined- it works.
if you're worried about spending it early, you can also stick the $ in a different bank or credit union so it's diversified from your main holdings and you don't see it every day when you log into your online banking or see the statements.