News Brief

'Consumer Reports': Extended Warranties Overpriced

The magazine has launched a national advertising campaign targeting the car-buying public with the message that extended warranties for new cars and trucks aren't worth the money.

The firm says 65% of more than 8,000 Consumer Reports readers surveyed by the Consumer Reports National Research Center earlier this winter said they spent significantly more for a new-car warranty than they got back in repair cost savings.

The campaign ad headline reads: "You don't need an extended warranty, despite what the car dealer says." A print ad is running in USA Today today. Banner ads will also run on numerous car-buying Web sites including autobytel.com, Edmunds.com, CarandDriver.com, MotorTrend.com, and others.

Consumer Reports experts suggest, among other things, that shoppers put the $1,500 to $2,300 they might spend on an extended warranty into a money market savings account or mutual fund instead, to insure against unlikely significant repair costs.

--Karl Greenberg

Tags: automotive
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