The economy is a little shaky, but you still have needs and wants. Everyone else is in the same boat, including businesses who still have to sell products if they want to make a profit. If you have a good cash reserve and the opportunity arises, now could be a good time to get a great deal on things like electronics, washers and dryers, televisions, kitchen appliances and so on.

Not long ago, big box electronics shops like Circuit City began competing against the lower prices and better deals found online by offering just as good of prices.  However, that meant they didn’t make very much profit because of the overhead of running a store.  They countered that by aggressively selling extended warranties to their customers.  Soon, virtually all of the profit from an electronics chain was from warranties. 

Unfortunately for them, but fortunately for everyone else, customers soon caught on and came prepared for the warranty hard sell and more importantly, came prepared to say know.  In the process they saved themselves from wasting a fortune, and at the same time put Circuit City and others out of business.

That doesn’t mean that retailers have stopped trying to sell extended warranties, far from it.  Particularly on electronic goods, appliances, and televisions, most purchases come with at least a quick offer to purchase a warranty, if not a much harder sale.  Either way, extended warranties are almost always a bad deal for consumers, not because a warranty is a bad idea, but rather because they are almost always overpriced. 

The ones that are not outrageously expensive generally have “features” that make them unattractive as well such as getting a percentage of the cost based on how long you’ve used it, or worse, getting an “equivalent” replacement that usually isn’t.

But, thanks to a company called Square Trade, you no longer have to choose between worrying about what happens if your new purchase breaks, or overpaying for some 50/50 shot on an extended warranty.

The premise behind SquareTrade is that it is possible to make money on warranties by aggregating failures and spreading out risk like insurance companies.  Then, selling the warranty at a fair and reasonable price assures that more warranties will be sold.  Since nothing happens to most items, there is plenty of money to be made without treating anyone like a sucker.

The best part is that instead of having to keep receipts and paperwork and hope you can find them if something goes wrong, you setup an account at Square Trade and use it to manage all of your warranties in one place.

Chances are a Square Trade warranty will cost you half of what the retailer is offering you and unlike the retailer warranty, there is no high pressure to buy now.  Sleep on it and buy the warranty in the morning if you think it is still a good idea.

Now, you can be covered, and not get robbed.

Don’t forget to see if you credit card offers some form of protection for your purchases as well.  Generally, this will be for a much shorter term than an extended warranty, but it never hurts to know what savings you could be getting there as well.

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Save Money on Warranties with Square Trade originally published at Personal Finance Blog - FinanceGourmet.com