There are times in life when you have to dig deep into your budget and make a large purchase. Perhaps you’re in need of a new car (or at least a newer used car); maybe you need to invest in a TV upgrade; or you’ve finally decided it’s time to add a new extension to your home. These investments are always budget-straining, and if you generally consider yourself to be rather frugal and thrifty, it can feel odd to spend so much on a single purchase.

One of the best ways to reassure yourself when making big purchases is to ensure you do all you can to protect your investment. Below, you’ll find a few ideas — based on three example “big purchase” circumstances, as mentioned above — as to how you can make sure the big-ticket items you buy are always protected in big-thinking ways…

#1: The essential reality of insurance

People like to debate whether insurance is a good idea, but when it comes to big purchases, insurance is always a good idea. If you have handed over a large amount of money, then the last thing you want is to suddenly find yourself without the money and without the item, because it’s damaged and you don’t have the funds to fix it.

• If you’re buying a large appliance, insurance is a decent decision, provided it offers an enhancement on what’s offered with the standard new-purchase warranty. For example, accidental damage will usually not be covered by a warranty, but it would by insurance.
• Car insurance is largely considered to be an essential. As thebalance.com shows, even in states where car insurance is not mandatory, you are still liable for damages in the event of an accident. So whether it’s a requirement or not, buying insurance for your new vehicle is always going to be a good idea.
• It’s difficult to insure new work on your house specifically, but do make sure that any extension is covered by your home insurance as soon as the construction is complete.

#2: Opt for a Warranty Wherever Possible

When you buy an item, a warranty will usually be included or you will have the option to purchase one. Warranties can be genuinely beneficial, but you have to learn to scrutinize the fine print to ensure that you’re covered for what you think you’re covered for.

• As discussed in point one, the warranty for a large appliance is unlikely to cover accidental damage, so you’ll need insurance if you want to be covered against this risk. However, warranties for appliances are still genuinely beneficial, especially for basic malfunctions, so make sure you keep the documents handy and diarize the date when the warranty expires.
• When you buy a new car you will usually receive a warranty as standard, but you may want to enhance this if given the opportunity— cars have a lot of moving parts, so protection against a variety of failures is always going to be beneficial. If you’re buying a used car then you may think that you won’t have the option of a warranty but, as the details on www.carchex.com/content/used-car-warranty-companies, this isn’t actually the case, so you can still protect your investment even if you are buying a secondhand car. Claiming on a warranty is usually cheaper than claiming on insurance, so car warranties are definitely a good step when trying to protect your investment.
• Any work that is carried out on your home should be completed by a company who offers a warranty on the work, and you should receive this warranty in writing. Sometimes the warranty may be called a “guarantee”; these terms are often used interchangeably, but you still need to carefully scrutinize the fine print to ensure you’re comfortable with what is being provided. If the company doesn’t provide a warranty or guarantee on their work, it’s worth being suspicious and asking why this is. If you don’t feel comfortable with the response, choose another company who are confident enough in their workmanship to offer coverage when the work is completed.

#3: Pay with a Credit Card

There’s no need to break this one down, as it’s a simple rule of thumb for any big purchase. Paying with a credit card affords you certain protections that other payment methods are unable to match, so choose this option whenever possible when making big purchases. You can then pay the money off as quickly as you can, of course; this is a touch more inconvenient than just paying direct, but it’s worth it for the enhanced protection of your purchase.

In Conclusion

Follow the steps above and you should be able to protect all of your big-ticket purchases in the future, helping to ensure that you always get the best bang for your buck.