Home Warranties Are a Bad Deal

Steven asks if Dave recommends purchasing a home warranty for the first year after buying a home.

QUESTION: Steven on Twitter asks if Dave recommends purchasing a home warranty for the first year after buying a home.

ANSWER: No. I don’t recommend purchasing home warranties at all. I don’t buy extended warranties of any kind. They are about 75% marketing cost, meaning commissions. The other 25% actually covers the events, and if you would just bank what you’re paying for that, you’ve got the money to cover what it would cover. It’s not a good deal.