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Posted by Stan Brown on 02/01/07 10:14
Wed, 31 Jan 2007 22:00:47 -0600 from Aaron J. Bossig <linkvb06
@SpammersWillBeExecuted.ptd.net>:
> The manufacturer's extended warranty, on the other hand, is a legally
> binding contract entitling you to certian satisfaction should the product
> fail under normal circumstances. It's worth the money in that you have
> an absolute guarantee that your product will be repaired/replaced.
It *may* be worth the money, but probably isn't.
Multiply the probability the unit will need replacement, times the
cost of replacing it, and compare that to the cost of the warranty.
For most durable goods the extended warranty is a horribly bad deal
for consumers because it's a hugely profitable item for sellers.
That's especially true with electronics, where you know prices are
going to continue to fall.
If you buy a DVD player today for $150 (fairly high end for a plain
player), you know within a couple years the same player (or one more
capable) will cost about $50. If there's less than a 20% chance the
player will fail within that time -- almost certainly true -- then
the value of the extended warranty is not $150 but $50 times 20%,
which is $10.
--
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
http://OakRoadSystems.com/
DVD FAQ: http://dvddemystified.com/dvdfaq.html
other FAQs: http://oakroadsystems.com/genl/faqget.htm
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