Ask Stacy: Are extended warranties worth it?

This post comes from Stacy Johnson at partner site Money Talks News.

Over the 20-plus years Ive been doing consumer news, I've done several stories about extended warranties and service contracts. They've mostly been negative.

My opinion has always been these add-ons are merelyprofit centers for retailers and rarely worth the money.

Recently, however, I began questioning that advice, not because the service contracts are better, but because some products they protect are getting worse.

Here's a look at this week's reader question.

Are service plansworth it?

We've all been there: You're at the checkout buying anything from a cellphone to a dishwasher, and the salesperson launches into a newpitch. "Don't you want an extended warranty/service plan to protect you from expensive repairs?"

There's a reason these pitches are so intense. These post-sale policies come withmarkups of 50 percent or more, typically a much higher profit margin than the retailer makes from the product itself. That profit margin alone should tell you something -- namely, lots more money is being taken in than is being paid out for repairs.

Other reasons to just say no:

They don't make 'em like they used to

Originally posted here:
Ask Stacy: Are extended warranties worth it?