Published: Friday, Dec. 6 2013 12:00 a.m. MST
Only a small fraction of premiums paid to insure small gadgets is ever paid paid
back to the consumer in the form of replacements or repairs. Warranty plans are
a hugh source of profit for retail outlets and the wise consumer should just
plan on taking good care of their stuff and insuring themselves. According to
Motley Fool contributor Rick Smith:"According to Consumer
Reports, stores tend to earn 50 percent or better gross profit margins on
warranties they sell."By buying an extended warranty you are
essentially betting the item with break, our odds are much better putting your
money on "red" in Wendover!
Here's the rule of thumb for insurance: DO NOT insure anything you can pay
to replace. Phones, ipods, tablets and in some cases cars when compared to
healthcare and homes are really cheap.
I know the $7.95 warranty I bought for my Blu-Ray player paid for itself when it
died after six months. The warranty company sent me a gift card, and I simply
went and bought a new Blu-ray player. Saved me $59.
CHS:The very first time I put a quarter in a slot in Vegas I won
$12.50, but I don't recommend gambling!
I, on the other hand, do recommend gambling (in moderation, of course) but do
not ever purchase extended warranties, and don't recommend them to others.
Like the article says, if you want to put money on such a warranty, put it into
getting a gadget with a one year manufacturers warranty and end up with a better
Perhaps the exception to this is to buy an extended warranty plan for Apple
products. I have returned a computer to the Apple store almost two years after
purchase. They replaced the screen and disk-drive for free. Otherwise it would
have cost hundreds of dollars to repair. Apple's warranty plans are good
and well worth the money.
So, wondering, if I bought a new game system, and with or without the extended
warranty, and it was broken somehow - when I send it in, does it go back to the
factory it was originally built in? Apparently, we're still
seeing the forced slave-labor conditions in China as before, because of peaks in
demand, so if I send in my system, does it add to their burden, or does it go to
an American company that actually gets paid for the work done?
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