Would you like to purchase the extended warranty with that sir/mam? This is the question that consumers dread as they step up to the till to purchase a new product. You really don't want to spent the extra money, but what if the product you are buying decides to "crap out" just as the regular warranty expires. Will the extended warranty give you peace of mind, or is it just a way for manufacturers or retailers to make a little extra cash?

Extended warranties are service contracts where the manufacturer or retailer is promising to repair a product for a certain period of time after the products regular warranty is up. Extended warranties cost extra and are sold separately from the products they apply to. Retailers that do not repair in store, generally sell extended warranties that are third-party policies, meaning that another company deals with your claims.

Questions to ask before you buy an extended warranty.

• How long is the manufacturer's warranty? Research has found that products rarely break within the extended-warranty window. If the product is defective it will most likely break during the regular warranty, and if if breaks down after the warranty is up, the product is usually cheaper to replace or out of date.
• What would it cost you to repair/replace the item? If the product is low cost, it is probably cheaper to replace it than repair it. If the product is more costly, you need to ask yourself how expensive it will be to replace when the regular warranty is up. As new technologies are developed, old technologies can become quite cheap.
• What is covered under the warranty? When it comes to repair the product you bought, you may find that many things are not covered under the extended warranty. Make sure you get it in writing, if they can't provide you with a written agreement, you probably don't want to spend money on their extended warranty.
• Who will be honoring the extended warranty? Depending on who you are buying the extended warranty from, you may not have a say in where it goes for repairs. You may have to pay for shipping charges and you may be left without a replacement while your product is being repaired.
• Will the company you bought the extended warranty with still be around when you need to make a claim? Especially with third party extended warranties, the manufacturer or retailer can't always guarantee they will be around when you need repairs.
• Are you making the purchase with your credit card? If you are paying interest on your extended warranty, it may end up costing you much more than just paying for the repair if or when it is needed.
• Are both parts and labor covered under the warranty? The part may be inexpensive, but the labor charges can really add up.
• Is there a deductible? How much? Deductibles may make your extended warranty cheaper, but it's an added expense when you need the repair.
• What documents (receipt, warranty card, etc.) do you need to keep in the event that you will need to make a warranty claim? Make sure you have all receipts and agreement in the event of a repair. Extended warranties may require you to "jump through hoops" in order to make a claim.

Remember to compare all your options before making a warranty decision. Use the Internet to research not only the quality of the product you are buying, but the extended warranties offered with the product or with the store where you are buying it. Getting quotes can help give you a ballpark idea of what an extended warranty with your desired features should cost. It always helps to be fully informed before you buy.