Sometimes additional costs come out of nowhere. Extended warranties can help consumers cope.
Balancing day-to-day needs with discretionary spending and saving “for a rainy day” can pose a challenge for many American consumers. In fact, 40% are currently struggling with personal debt and have difficulty saving and investing. Challenges like cost of living increases and poor financial planning can make it difficult to achieve a balanced budget, let alone allow for saving.
With constant financial factors to juggle, how do consumers get by when an unexpected expense is added to the mix? Well, it doesn’t get any easier, that’s for sure. Federal Reserve data suggests that 4 in 10 Americans would have difficulty covering a $400 emergency expense in any given month. To overcome the added expense, most would choose to carry a credit card balance, borrow cash from friends or family—or maybe just choose to not pay at all.
Its unfortunate, but the reality is that many Americans live paycheck to paycheck, and a sudden financial hardship—even a small one—can spell big trouble.
How can they find relief? Let’s take a look at one potential solution.
Extended Warranties and Expense Management
Refrigerator no longer running? That could cost as much as $400.
Need a car repair? How does $600 sound?
Phone malfunctioning? That can run about $600, too.
Sound expense management starts with proper planning, and today’s consumers need to have a general expectation of where their funds will go on a monthly basis. But when unexpected circumstances are just that—unexpected—how can consumers put themselves in a better position to avoid the stress associated with these decisions?
Products like extended warranties, vehicle service contracts, and smartphone protection plans offer repair and replacement coverage at a fraction of the costs listed above. Long term, they can save consumers hundreds of dollars, lessen the impact of unexpected expenses, and provide welcome peace of mind.
But the benefits don’t end there.
The Extended Benefits of Extended Warranties
While consumers are the obvious beneficiaries of extended warranty programs, retailers and other service providers can benefit as well. By offering these helpful options, retailers and service providers can position themselves as champions for consumer well-being, helping build long-term loyalty and encouraging repeat business.
Whether it’s expense relief or retailer enhancement, extended warranties of all types can provide big benefits.