Extended Warranties: NY Times Says Boo

Almost half of readers decided that extended warranties weren't for them, and they'd be happy with the manufacturer's limited warranty. Another 30% say they do like warranties, but only for big purchases. What does the NYT say? "A sucker's bet."

Reader Patricia writes:

I don't quite follow the math here: For example, a recent Consumer Reports survey found that only about 10 percent of digital cameras broke during their first five years. For an extended warranty to be valuable, it would have to cost much less than 10 percent of the purchase price, since a camera with the same features will probably cost much less by the time you need a replacement. Yet a warranty on a digital camera usually costs 15 percent to 20 percent of the purchase price, Mr. Marks said.

I mean, a replacement for a broken camera, no matter how much prices drop, is STILL going to cost more than 15% of the original. So, wouldn't a warranty save you $? Shit, I was an English/French lit major. What do I know.

We agree with Patricia, and 30% of readers. Why?

Because although you're statistically not going to be in the 10% of people, if something expensive does break, like that $5,000 Plasma TV, you're not going to want to shovel up another $5,000 for a new and improved one when the one you had was just fine. Sure, don't buy warranties on stuff you can afford to replace (like a $35 CD player), but on big expensive things—for the peace of mind and for the accident prone—we'd recommend getting them. Hell, we wish we got one on our Xbox 360s, which has a DVD drive that's been giving us disc read errors.

The Word on Warranties: Don't Bother [NY Times]