Are Extended Service Plans for Electronics Ever Worth It?

[CrazyEyez]

If so, for what products? Laptops, MP3 players? Cost is usually in the 10-20% range.

[MrWookie]

If the service plans were +EV wagers for you, they wouldn't be selling them (at least not at that price, terms, etc.).

[mosdef]

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If so, for what products? Laptops, MP3 players? Cost is usually in the 10-20% range.

[/ QUOTE ]

I believe the answer is a definitive no.

[CrazyEyez]

I always thought no, but I hear a lot of people saying that their mp3 players break. I'm going to buy one soon and wondered if I should shell out.

[4 High]

They are usually never worth it. I remember when i worked at best buy, employees would always get the plan due to how cheap it really was. The discount was 5% above cost so a 49.99 service plan for the customer was like 3 bucks for us. Insanity.

I would assume they would have be less then 5% of the cost to be cost effective for customers no?

[suzzer99]

I got a 3 year extended warranty on a Toshiba laptop I bought in 2000. I think the laptop itself was $2100 and the extended warranty was $200 or $300, I don't remmeber. Both hinges ended up breaking at different times, I definitely got my money's worth.

I just got my friend a dell laptop for $600. 3-year warranty is $270. Wtf? Same deal with cameras. I'm not paying half the price of an electronics item just so it will be in warranty until it's almost obsolete.

[Badger]

They might be worth it for people that keep track of this sort of thing. I never get them because I don't like to buy insurance for things I can afford to replace. Even if I did think it was a good value I wouldn't get it because no way am I going to deal with getting it replaced 3 years from now.
My brother has had gotten some good upgrades/replacements from buying these, however. He's the kind of person who would keep track of when he bought the stuff, make sure to take it in as soon as it breaks, and generally gets a ton of use out of the electronics he buys.

[CrazyEyez]

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If the service plans were +EV wagers for you, they wouldn't be selling them (at least not at that price, terms, etc.).

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That's not necessarily true. The people/products that never make claims can be subsidizing the people/products that do, with profit left over for the company.

Maybe my OP should have been:
Is there at least a 17.5% chance that a new Zen Vision will break within 2 years?

[devilbiss]

I got one for my ipod at Best Buy and I just plan to take back the ipod when the 3 years is up. Best Buy gives you a gift card for the original price so I will be able to get a better ipod and possibly have some money left over. So for my ipod I think it was worth it.

[MrWookie]

If this many of the Zens were breaking that quickly, you would definitely hear about it from any one of a number of consumer electronics review sites/magazines.