While I used to buy extended warranties on pretty much all of my gear I've learned that they just don't pay off. As long as you're buying quality gear the chances are somewhere between slim and none that it will break in less than 3 years. Regardless of what you're buying after that much time passes there will be something bigger, better, and cheaper avalible so rather than fixing the old you'll be in the mood to upgrade to something new.
I have one on a Sony 330 DVD player and the contract cost $30. It's been in the shop twice. Check reviews at Audioreview on the 330/530/360/560 era Sony players and you'll see that the contract more than paid for itself. To me, it depends on the contract price, newness of technology, contract duration, mechanical complexity of the device to be protected, potential cost of repairs and historical reliability of the manufacturer.
I'd say for DVD players it is a VERY good idea. Of course if you get a Sony ES player with a 5 year waranty, it is not needed, but for these 90 day warranty players it is a good idea. I swear, some of these devices have self destruct clocks tied to the warranty length.
For an RPTV, definitely, anything else its a toss up. You need to consider the following: Cost of the item Cost of the warranty How long you plan to keep it Where is the warranty valid What exclusions are in the warranty Is there a deductible
10% is a good price. Don't these typically cost more? I paid about 10% for my RPTV for a 5 year warranty, and I've had to use it and it definitely saved me money. Plus it was for in home service (definitely a good thing for a TV). Also, my store would have given me half the cost back after 5 years if I never used it. That was good insurance to buy. I also bought an extended warranty for my for my Yamaha RX-V1. The warranty was $50 and the receiver was $2250. Definitely a no-brainer in my opinion.
Let me tell you about my "Extended Warranty" dilema I am facing right now.
So I buy an RPTV (HDTV) back in Sept. 2000 at sears for around $2600.00, I figure, If Im going to spend this much on a TV, I would feel MUCH better if It is covered more than the 1 year that the Manufacturer offers. I asks the sales person that I wanted extended warranty and how much would it cost me. He said $300.00 for extra 2 Years, so I go and buy it.
I just recently started having problems with the TV but its more like a RECALL rather than an issue. It does not play Progressive Mode.
I called Sears Service Center with my information and asked for a tech to come and fix my problem. I even provided the Service Bulletin from the Manufacturer and the part numbers.
Anyway- 5 Tech Visits - 2 No shows - 3 Entended Lunches and 2 Vacation Days, its finally Working! Thats a LOT of LOST TIME and frustration!
The only item I have purchased an extended warranty on is my RPTV, the reasoning being that it was a very expensive purchase and would require an even more expensive house call for any repairs (I'm certainly not going to transport it to a repair center).
For everything else, I am usually ready to upgrade equipment long before it may fail. If a component does happen to fail before it's ready to be replaced, I figure that I have saved enough money on all the extended warranties that I did not purchase to cover the cost of replacement gear.
As a side note, the only way I agreed to an extended warranty on my wife's last car was when the dealership agreed in writing to refund the cost of the warranty if we did not use it. This is the only time anyone has ever made this offer to me on an extended warranty.
Let me preface this by saying I will not claim to know much about how credit cards "extend" the manufactures warranty. That said generally the manufacture warranty is not that good of coverage. Either they don't cover that much (defects only) or they do not provide convenient service (on sight). So while it is a good benefit to have, I would agree that most of the products mentioned would benefit by a extended (and expanded) warranty.
The only items I'd expect to even HAVE in five years are the speakers and amplifiers, which don't NEED an extended warranty. The ones on RPTV's that include an annual adjustment/cleaning might be worth it ... the others are virtually pure profit.
Extended Warrantee? NEVER!
But I am also very anal about maintanance. I have opened and cleaned up by DVD player a couple of times (heck, I even got in there and made it region-free)... I have duvateened by RPTV... I clean the heads and path on my VCR's monthly... etc. So I am not too afraid to get in there for regular cleaning.
I figure anything else to go wrong will do so during the manufacturers warrantee.
So far, been lucky!
Besides, I hear that EW's are PURE PROFIT for for the seller.... they already got some of my money, I do not want to make a present of more...
I don't buy the fact that you should not buy an extended warranty because the seller profits off of it. If you do not think that you product needs the warranty (you do cleanings/alignments yourself, does not have moving parts, etc.) that is one thing, but if you are really worried about profits don't buy anything. That way no one will make a dime off you and you can sit in a field (that you do not own) and do nothing. Because when you eat someone profits, when you work someone profits, when you drive someone profits. I think that the argument that you don't buy them because someone else profits is a weak excuse for saying "I just don't think I need it."
I am as good a capitalist as the next guy. What I mean when I say that they are pure profit, is that they are an insurance policy on which the underwriter is seldom called upon to pay off - ergo, pure profit. I've simply never had any electronic items actually break down. Maybe i buy ones with particularly good build quality, maybe I've been very lucky - who knows? I begrudge no one a healthy profit for a quality product or service.