Sept.
24, 2025 GPT5 Prompt: give clark howard's
advice on whether to buy extended warranties for 1- new cars, 2-used cars, and
new appliances. Then provide your opinion on whether the advice is right or
wrong
Clark
Howard’s Advice: What He Says & His Principles
From his podcasts, articles, and
interviews, Clark Howard’s stance is fairly consistent:
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Context
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What Clark Says / His Principle
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New Cars
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Clark is skeptical of extended warranties; he might permit
considering one only under limited circumstances, but strongly prefers
sticking with manufacturer coverage and having savings for repairs.
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Used Cars
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His view is largely similar: extra caution with
third-party warranties; only buy if you lack the funds to absorb a breakdown
and if the vehicle’s make/model and history justify it; lean toward
manufacturer/authorized warranty sources if possible.
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Appliances / Electronics / Home Warranties
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Clark almost always recommends declining extended
warranties on appliances and electronics. He considers them a poor financial
decision and says they rarely pay off.
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Nuanced
Critique of His Advice (by GPT)
Clark’s advice is sound in many
respects, especially as a general guide for most consumers. But as with all
“one-size-fits-most” financial advice, there are caveats. Below is where I
agree, where I think he overstates things, and when I’d deviate.
What
He’s Right About
- Warranties often favor the seller, not the buyer
Many extended warranty / service-contract plans have exclusions,
limitations, deductibles, or conditions (e.g. requiring dealer service,
geographic restrictions) that make it hard to get certain repairs covered.
This undercuts their value. Clark’s warning about loopholes is
appropriate. - The “expected return” is generally negative
Statistically, many people never use their extended warranty, or use it
only for small repairs that don’t recover the full cost paid. Clark says
(in one article) that only 8 cents on every dollar spent is “used on
repairs” (i.e. you lose 92 cents). Clark Howard While
that figure may be an illustrative or rounded claim, it captures the
asymmetry: sellers price in margin, risk, administrative overhead, and
they expect many buyers won’t file claims. - Self-insurance / emergency fund is a better “warranty”
If you can afford major repair costs (or build a cushion over time), you
skip the premium paid to third parties and retain control. For many
durable goods/appliances, this is a sensible approach. - Manufacturer warranties are more reliable than
third-party ones
If you were going to get extended protection, Clark is right to prefer the
automaker’s extended warranty or authorized extension rather than a
disconnected third-party plan. He’s cautious of warranties sold by the
dealership or third-party services. WSOC TV+1 - Avoid overpaying at the point-of-sale under pressure
Dealers and stores often push warranties as add-ons at checkout when
consumers are in “buying mode” — a classic upsell. Clark’s repeated advice
to decline the warranty offer (or at least slow down and evaluate) is good
consumer protection.
Where
More Nuance Is Needed
Home
warranties and “protection plans” differ from extended warranties
Some home warranty services (covering systems or appliances faults) might have
limited use, but in some markets and with proper contracts they can offer peace
of mind, especially in older homes. Clark tends to lump all of these under
“never buy them,” which may be too blunt. For example, if you’re buying a home
with older HVAC, plumbing, etc., a home warranty may provide value (though
still often marginal). Clark does allow that sellers may buy a home warranty to
reassure potential buyers. Clark Howard+1
My
(GPT) Bottom Line
- For appliances / electronics / home gadgets, I
largely agree with Clark: extended warranties are rarely worth it for the
average buyer. They often cost more than what one would expect to pay in
repairs, especially given limited likelihood of failure within the
extended period and contractual restrictions.
- For new cars, I lean toward a cautious
“sometimes, but usually no.” I think it’s reasonable to consider an
extended warranty under specific conditions (you plan to use the car far
beyond its factory warranty, you drive very aggressively or in rough
conditions, the car is known to have expensive repair parts, or your
savings are limited). But I would not default to buying one; I would
instead estimate repair risk, check reliability ratings, and compare
warranty cost vs expected repairs.
- For used cars, I'm more skeptical. Because you
already lose some “known good period” of the vehicle, warranties become
more expensive relative to risk. If the used car is from a reputable brand
with good reliability, and you have enough buffer to absorb small to
moderate repairs, skipping the warranty is often prudent. If the seller
offers a manufacturer-backed or certified used car program warranty,
that’s more trustworthy than generic third-party plans.
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