Be Wary When Purchasing Warranties

DENVER (CBS4) - Whenever making a big purchase chances are the customer is bombarded with offers for extended warranties. But many consumers who pay a lot get little or nothing but paperwork.

A $14,000 entertainment center is Bob Yori's pride and joy. He likes to watch sports, but his wife Ros prefers a good love story. But the story of the extended warranty they purchased for $1,100 is a sad tale.

"I heard Ultimate was going out of business and they promised me half my cash back if I warranted all my products, so I did," Yori said.

Now instead of getting $550 back on his unit. He won't get a penny because the company is going out of business. He has all the paperwork so CBS4 called Ultimate Electronics and were told customers holding the warranties are out of luck.

"Spent your money for nothing," Yori said.

Warranties are a good idea when purchasing something with a lot of intricate electrical features on it. But Andrew Popek with Sears says a better option than extended warranties can be a protection plan which offers regular maintenance on a purchase.

"You get a free maintenance so once a year we'll check up on the project," Popek said.

Most experts say next time Yori should stick with the manufacturer's warranty that comes with a product. Be wary of paying extra unless certain that there is a product maintenance package that comes with it.