Wednesday, December 1, 2021

"What You Shouldn't Pay For" by Chicago Consumers' Checkbook


Air-Duct Cleaning

We call duct cleaning work a solution in search of a problem. Companies that do it claim that their services will improve your home’s air quality, but there’s little evidence this yields any substantial benefits. Even if you have dust allergies, you may want to avoid having your ducts cleaned: The little independent research that exists indicates duct-cleaning work may temporarily worsen problems.

Amazon Prime    

When Amazon launched Prime, its main benefit was free two-day shipping. Now Amazon provides free shipping for much of what it sells if your order is $25 or more. Prime is still worth its $119 annual fee (or $12.99/month) if you regularly watch its original TV shows or movies or other programming available for free to Prime members. And its unlimited cloud storage for photos, its music streaming service, and Subscribe & Save discounts on household and baby products also make membership costs a better deal if you use those services. But many Prime customers aren’t getting their $119-a-year’s worth.

Bottled Water

Each year, U.S. consumers pay more than $100 billion to a bottled water industry that gobbles up about 100 million barrels of crude oil to manufacture and transport plastic bottles. Getting your drinking water from the tap is nearly free and doesn’t waste all that energy. Food & Water Watch, an advocacy group created by Public Citizen, says that tap water in the U.S. is usually safer to drink than bottled water, since it is tested more rigorously. Plus, bottled water is more likely to be contaminated by microplastic particles. If you need to filter your community’s tap water, and your refrigerator doesn’t have a built-in filter, you can buy a standalone model for less than $20.

Cable TV

Thinking about cutting the cord? Droves of consumers continue to join the cable-free club. The growing variety of streaming services like Netflix, Amazon Prime, Hulu, YouTube, Disney+, and Sling TV make it easy to access a plethora of a la carte programming for less moolah than the all-or-nothing plans still sold by cable and satellite TV companies. And because streaming services usually don’t require term commitments, you can subscribe to a few and if you grow tired of what one offers (or its free trial ends), cancel, and move your money to the next one. Some watchers will save as much as $100 a month by saying buh-bye to cable.

Car Leases

Even though ads featuring low monthly payments make vehicle leases look like good deals, in the long run these plans will cost most consumers more than buying. Unless you purchase the wheels at the end of your lease, you have to give back the car and won’t own anything; you’ll then have to lease or buy something else, starting a process of paying for a new ride’s steep depreciation all over again. Plus, you can’t customize a leased car, drive it farther than preset annual mileage limits, or damage it without paying the vehicle’s real owners extra fees. Whether you lease or buy, avoid overpaying. Click here for our advice on how to get the best price on a new car.

Car Repairs at the Dealership

Unless the work you need is covered by a new-car warranty or manufacturer recall, use an independent shop, not a dealership. Many consumers believe dealers have access to proprietary knowledge, sophisticated diagnostic software, and better tools than independent garages. That’s not true. And when we use our surveys of consumers to compare quality of work at dealers and non-dealers, the non-dealers on average score better. We also find that dealerships typically charge a lot more than independents.

Car Repair Warranties

Vehicle extended service contracts are incredibly profitable for auto dealers and other companies that sell them. But because many new cars are very reliable, most owners make few service claims. Even when something goes wrong, many consumers who buy these plans find their claims are often denied due to sneaky fine-print exclusions. We reviewed the lists of excluded repairs buried in several contracts and were left wondering if there was anything on the car left to cover.

Credit Reports, Scores, and Monitoring

Carefully watch your credit and accounts for signs of fraud, but don’t pay a company to do it. Identity-theft monitoring services cost $10 to $30 a month, but you can easily do it yourself for nothing. Federal law entitles you to one free credit report every 12 months from each of the three credit bureaus—Equifax, Experian, and TransUnion. Request yours at You can stagger your requests to get a free report from one of the three major credit bureaus every four months. Because of the pandemic, you can access a free online copy of your credit report from all three credit bureaus once a week until April 20, 2022. And identity theft victims are always entitled to unlimited free credit reports from the credit bureaus. The credit bureaus’ free reports won’t include your credit scores. But you don’t need to pay extra to get yours. Many financial institutions have set up access so their customers can monitor their FICO scores for free; check the websites of your bank, credit union, and credit card companies for how to enroll.

Extended Product Warranties, AppleCare, Etc.

Purchase protection. Service contracts. AppleCare. Whatever retailers call them, these policies are sources of easy revenue for the outfits that hawk them and for the insurance companies that administer them and honor infrequent claims. But we find they are usually bad deals for you. For example, buy an iPhone 11 and for no extra cost you get a one-year limited manufacturer’s warranty covering repairs and 90 days of tech support. Pay an extra $149 for AppleCare and it extends that warranty for another two years; spend yet another $100 and you’ll get coverage for theft or loss. The problem? Even after paying those premiums, you’ll still have to pay extra if you run into trouble. Cracked screen? There’s a $29 deductible to fix it under AppleCare; you’ll pay $99 if your clumsiness or a product defect necessitates a different type of fix. And if you bought Apple’s full-boat policy covering theft and loss, you’ll still have to shell out a $229 deductible to replace a lost phone.

So you’re out $699 for the phone, plus $149-$249 for AppleCare, then up to another $99 if you break it or $229 to replace it. That means if something goes wrong you could be out-of-pocket $248–$478 to cover a $699 purchase. Even if you want an extended warranty, you can usually get it for free. Many credit cards automatically provide free extended warranties when you use them to pay for products that have manufacturer’s warranties. Costco and Sam’s Club also offer free warranty extensions. That so many companies give away extended warranties is an obvious sign that they’re not worth paying for.

HVAC Maintenance Contracts

Some heating and A/C companies swear by these contracts, arguing that regular maintenance helps avoid untimely breakdowns during peak-usage months. But many really push these plans to keep their technicians busy during otherwise slow months—and to maintain a steady flow of revenue. Use our ratings to identify a reputable HVAC contractor and ask it how often your equipment needs service. If you need professional maintenance visits every year—if, for instance, you have a large house or don’t want to perform even the simplest tasks, like changing filters yourself—a maintenance contract might make sense. But most of us won’t benefit much from these plans, and we get a lot of complaints from consumers who buy service contracts and find that technicians discover something to repair on every service visit—at extra cost. Some contractors seem to use service contracts as twice-a-year opportunities to squeeze customers for unnecessary repairs.

Life Insurance—Cash Value and Annuity Policies

Permanent life insurance plans, aka cash value policies, and similarly structured annuity plans are typically bad deals for most consumers. If you want to buy coverage, shop around for a term life policy. The way permanent life plans are structured make them more investment vehicles than reasonably priced insurance policies, and as investments they offer lousy rates of return. You’ll most likely do better by paying a bundle less for term life coverage and investing elsewhere savings earmarked for long-term needs. Click for more advice on buying life insurance. Some quick savings tips: Shop around for the best price, and don’t overinsure—if your kids are 15 years old and you’re 10 years away from retirement, you probably don’t need a 20-year term policy.

Utility Line Warranties

Homeowners across the U.S. often receive ominous, official-looking letters bearing the logos of their utility companies warning they are responsible for repairs to water and sewer lines on their property. The clincher: If there are problems, the homeowner could be on the hook for thousands in repair costs. Although these mailings seem to come from their utilities, they’re really pitches from third-party companies. They’ve struck sketchy partnership agreements with utility companies allowing them use of their names and logos to hawk (in our view, lousy) warranty coverage. The ploys work: So far, more than 7 million homeowners have purchased these plans. But our research found that few homeowners ever have to deal with expensive water or sewer line repairs or replacements. These warranties are bad deals.

For the complete list, click here: 65 Things You (Probably) Shouldn't Pay For - Chicago Consumers' Checkbook


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