Extended Warranties Are A Ripoff

Ken AshfordEconomy & Jobs & DeficitLeave a Comment

Maybe you knew this already, but it’s nice to have it confirmed by no less an authority than Consumer Reports:

For the consumer, extended warranties are notoriously bad deals because:

  • Products seldom break within the extended-warranty window (typically around three years), our data show.
  • When electronics and appliances do break, the repair often costs about the same as the cost of the warranty.

They give two possible exceptions:

There are two caveats to our just-say-no advice: It’s worth considering an extended warranty if you’re buying a rear-projection microdisplay TV. Repair costs can be high, and these sets have been three times more likely to need repairs than other types of TVs. We also think it may be wise to get an extended warranty (which includes extended tech support) if you’re buying an Apple computer, because they come with only 90 days of phone tech support.