Monday, December 07, 2009

CONSUMER TIP FROM CONSUMER REPORTS

 Extended warranties
 This holiday season shoppers are expected to spend $1.2 billion on extended
warranties for electronics and appliances. Salespeople push hard to get you to buy
these service plans because retailers keep a nice 50 percent or more of what they charge
for them. That's much more than they can make selling the actual products.
But extended warranties are notoriously bad deals. Some repairs are already covered
by the standard warranty that comes with the product. CONSUMERREPORTS'data
show that products seldom break within the extended-warranty window-after the
manufacturer's warranty has expired and within the typical two to three years of
purchase. And when items do break, the  repairs, on average, cost about the same as
an extended warranty. How to avoid it. Our decades of brand research has demonstrated that products are reliable enough that we don't think you need extended warranties. But if you
decide that an extended warranty gives you peace of mind, check your credit-card
agreement before you buy one to see if charging an item on your card will provide
similar coverage. Some credit cards, especially gold and platinum ones, typically
lengthen the original manufacturer's warranty by as much as a year.
 If you can't rely on your card's additional coverage, channel your inner Scrooge. Get
the cheapest deal you can by including the cost of an extended warranty in your price
comparison. Don't pay more than 20 percent of an item's purchase price for one.

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