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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?
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