Dec 6, 2010

This is a picture of my television set, ripped from the pages of this week's Best Buy ad.  I bought this set from Best Buy two years ago for about $800.  It is in the ad this week for about $600.  That's the way it goes in electronics.

What is curious is that Best Buy has been sending me urgent reminders that I can get a swell two-year extended warranty on my TV for a mere $199, one-third of the replacement cost.

This would be roughly equivalent to paying $50K a year to cover your $300K house.  No one would pay that.

The way extended warranties work is that only a small part of the cost funds repairs on products;  most of the cost is profit.

I suspect that of the $199 Best Buy offer, about $30 funds honoring the warranties and the remainder goes to Best Buy's bottom line.





Things in this blog represented to be fact, may or may not actually be true. The writer is frequently wrong, sometimes just full of it, but always judgmental and cranky

6 comments:

The Bug said...

We never mess with extended warranties these days - by the time the thing breaks I'll want the new gadget anyway :) Not that I can afford that, but that's what I'm thinking at the time I make the purchase.

Bella Rum said...

It's just another way to get your money.

Kurt said...

eBay has a really cheap warranty program that we used on a used printer we got. But it was used.

Perpetual Chocoholic said...

We rarely bother with extended warrenties as we usually lose the paperwork anyhow.

Barbara said...

If you can wait, it never pays to be on the cutting edge of technology! I hope your $800 TV lasts forever!

mouse (aka kimy) said...

i've never gotten suckered into an extended warranty....