Reconsidering extended warranties

I think that electronics aren't as well made as they used to be. Correction: I know that electronics aren't as well made as they used to be.

Not only are products more fragile and flimsy but repair costs are rising. Both of these facts have caused me to reconsider my opinion of extended warranties.

Not all extended warranties are a good deal, but I used to feel that they were almost always a waste of money. Lately though I have had to help people with products that were just barely out of their one year warranty.

Adding an additional year onto most products costs less than $100. A dead hard drive, motherboard, processor or video card in a computer's second year of life can easily cost more than $100.

By the third year, most products can be replaced or easily repaired as the cost of older replacement parts gets less expensive over time.

The second year is the most critical year for to have a warranty. It is during this year that the manufacturer warranty has run out but the product still has a fairly high retail value and replacement parts have not depreciated much.

It is still a good idea to weigh the cost of a likely repair bill with the cost of the extended warranty. Don't spend $300 on an extended warranty because there is almost no repair that will cost you $300 in that second year or after (unless you have the Geek Squad do it).

If it is a laptop, large screen TV, projector, or other device that is difficult to repair consider paying for a three year warranty.

Smaller devices like digital cameras, MP3 players, printers, and cell phones are not worth buying any warranty for. After a single year, you will likely be able to buy a brand new identical device on eBay in eight months for less than you are paying for the item over a retail counter today. These items are always being replaced with newer models.
 

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