Submission + - Extended Warranty Purchases up 10% This Year
Hugh Pickens writes: "Consumer Reports says that most of the time, extended service contracts aren't worth the additional dollars. "This holiday season shoppers are expected to spend a whopping $1.6 billion on extended warranties for laptops, flat-screen TVs, other electronics, and appliances," says the consumer magazine. "And almost all of it will be money down the drain." But the NY Times reports that purchases of extended warranties are up 10 percent over last year according to the Service Contract Industry Council, a trade group. Consumers "tend to be more risk-averse and are less willing to absorb the cost of an unexpected product repair or replacement," says Timothy Meenan, the council's executive director. In some cases, refusing to buy an extended warranty is an on-the-spot no-brainer decision, says Mark Kotkin, director of survey research for Consumer Reports. "I bought a pair of headphones for my iPod for $15, and they tried to sell me the extended warranty for $20," Kotkin says. "When the warranty costs more than the item, that's crazy." But Kotkin acknowledges that there are other instances when the extended warranty can be handy. "We recommend getting one for the Apple computer," Kotkin says. "The tech support that comes with the extended warranty is great. Without it, the tech support is skimpy." Another product where extended warranties may be of use are giant television sets, where few manufacturers will come to your home to make warranty repairs. Extended service contracts for big screen tv's often offer in-home repair, says Meenan, who once shipped a Sony TV to the service center for repair under the manufacturer's warranty. "They fixed it and brought it back 45 days later.""
