Earth to consumers: extended warranties are a bad deal

Darren Murph
D. Murph|11.15.06

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Earth to consumers: extended warranties are a bad deal
It's no secret that you and your loved ones will probably drop some serious coin this holiday season (Black Friday in particular, we're sure), and while future repair costs may cross your mind, Consumer Reports recommends that you brush off that extended warranty those big box retailers will be shoving in your cart. Stores like Best Buy typically don't garner massive profits from just selling the snazzy new LCD or LCoS televisions, but "around 50 percent" of the extended warranty's pricetag goes straight to their pocket, and rarely do consumers need the coverage until after it's up. Studies have shown that most major breakdowns occur after the warranty period expires, and that in most cases, the repairs cost "about the same" anyway. Two potential exceptions were RPTVs and laptops Apple computers. The report stated that RPTVs have erroneously high repair bills and can be difficult to ship / move when the time comes for fixin', and since Apple's machines only come with "90 days of phone support," it was recommended that you pick up that AppleCare box with your purchase. Notably, studies found that notebook damage didn't occur nearly as much as generally believed, especially during the first year or three when the warranty was in effect. Nevertheless, it's estimated that non-savvy consumers will drop a combined $1.6 billion on fruitless warranties this year, so just be sure you're not one of 'em, cool?
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