Clark Howard’s Two Word Extended Warranty Advice Has No Exceptions

When the salesperson offers an extended warranty on your new purchase, consumer advocate Clark Howard has simple advice: walk away. With consumer sentiment at 52.9 in December 2025, down 18% from a year earlier, anxious shoppers are vulnerable to warranty promotions promising peace of mind. But the math tells a different story.

The Financial Reality Behind Extended Warranties

Extended warranties are statistically designed to benefit sellers, not buyers. According to Consumer Reports survey data, warranty buyers paid an average of $1,000 for coverage that provided just $700 in benefits, resulting in a 30% loss. Even more striking: only 1 in 10 people who purchase extended warranties ever use them, meaning 90% of buyers pay for protection they never need.

“The answer is no, they are not worth it,” Clark says on his website. “You should not buy them. I cannot think of an exception.”

This holds true whether you’re buying a car, appliance, or electronics. Most products already include manufacturer warranties covering defects during the period when failures are most likely. Extended warranties typically kick in after this initial coverage expires, when you’re past the highest-risk window.

A Real Example: The $3,300 Decision

One Reddit user shared their experience canceling a $3,300 extended warranty on a 2019 Subaru Forester just four days after purchase. Despite dealership staff who “were pissed” and said “this never happens,” the couple secured a full refund.

“We ended up deciding we’d rather cancel and save the 3k for a future repair rather than pre-pay for one that might not happen,” they wrote. Their vehicle already had a manufacturer powertrain warranty at no extra cost.

What You Should Do Instead

Rather than paying upfront for coverage you probably won’t use, set aside money in an emergency fund for potential repairs. Most extended warranties cost between $600 and $5,000 depending on the product. That money, saved and earning interest, gives you flexibility to handle actual problems if they arise.

Check what your manufacturer warranty already covers. Many products come with one to three years of free coverage for defects and mechanical failures. Credit cards also frequently provide automatic extended warranty protection when you use them for purchases.

If a repair becomes necessary, you’ll likely pay less out of pocket than you would have spent on years of warranty premiums. And if nothing breaks? You keep your money.

This becomes even more valuable during economic uncertainty. With retail sales at $735.9 billion but consumer confidence declining, protecting your cash reserves matters more than ever. Extended warranties drain those reserves for statistically minimal benefit.