Extend That Warranty?

Grace K. Henry & Michael Sheehan

Physician's Money Digest, March15 2005, Volume 12, Issue 5

Tip:

Buy an electronic gizmo or a majorappliance and you're likely to get aheavy-duty pitch to extend the manufacturer'swarranty. There's good reasonfor a retailer to push such warranties;profits can be in the 40% to 80% range,compared with the pittance earned onthe sale of the product itself. In mostcases, the cost of the warranty may bemore than a repair, if you ever actuallyneeded one, but there are times when anextended warranty can make sense. Alaptop computer, for example, is accident-prone and costly to fix, so a warrantymay be a good buy. Check tosee if your credit card gives you extendedcoverage on major purchases beforeyou sign up for a warranty.