Do you feel guilty when you turn down the “extended warranty” on that electronic item you just purchased? Don’t.
So you looked online and compared prices and went to 3 different stores and you finally found it on sale and at a price you could live with. But are you going to purchase an extended warranty? That is always the question and we always have to make that decision. Well I have already made that decision before I get there and you should too.
Extended warranties are almost NEVER a good deal. I say almost because who could have predicted the whole Xbox 360 problem. Most electronic hardware these days will fail within the first 6 months or maybe a year at most. If it makes it through that, it will likely last the 5 or 10 years the item should last. Or to look at it the other way, a recent Consumer Reports survey found that only about 10 percent of digital cameras broke during their first five years. That is a pretty low failure rate. I have a degree in Engineering, and have studied a lot of probability, statistics and such.
I recently purchased a 50 inch plasma TV, a Vizio brand, (and I love it by the way). Even though it was a fairly high priced item, I did not get the extended warranty. I did by it from a place that still has a great return policy though. Extended warranties have a huge markup for the store and that is why they are pushed so hard, not because you really need it. If you still feel you must get one, you can shop around instead of buying the one from the store. That would be your best bet and you will be amazed at the money you will save. One such place offering them is SquareTrade. With them, a three year warranty on a 1500 dollar plasma TV is about 12% of the price. Now I don’t feel it’s necessary to buy one for a plasma TV but you may.
Any comments? Do you agree that they are not necessary or have you found that they saved you money in the long run? Leave me a comment.