Are Extended Warranties Worth It?

Fight For Your Rights

Regardless of the result of service, you may encounter roadblocks on the way. Larry Fritz, a Billings, Montana, psychotherapist, bought an Xbox at a local Best Buy, and an extended warranty. The console's drive mechanism failed. Rather than simply replacing his Xbox with a new one, the store rep told Fritz he would have to pay for a game the store bundled with its new Xboxes even though the game didn't appeal to him. When he complained, the rep agreed to remove the game, but then said she wouldn't give him the new controllers that were packaged with the Xbox. The old controllers worked fine; Fritz just objected to the rep's combative attitude. "I don't appreciate having to fight about it," he says.

You shouldn't have to battle to get good service with an extended warranty, and our survey indicates that in many cases you won't. But any warranty is, at heart, insurance against the unknown. If you end up needing it, it was a good buy; otherwise, you could feel ripped off. For some products--ones that use complex, unproven technologies, such as projection TVs, or those more susceptible to damage, like cell phones--buying extra coverage probably makes sense. You should still weigh reliability and cost, and whether you can tolerate an unexpected repair bill, when making a decision.

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