Extended Warranty.........are they worth it????
by jraggie - 12/5/07 2:44 AM
What's everyones opinion on the subject of purchasing extended warranties?
by: jraggie December 5, 2007 2:44 AM PST
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The more you buy the more you lose
Insurance is a gamble. The odds are heavily weighed in favor of the seller. The more warranties you buy the greater the odds that you will spend more than you would have saved. The best strategy is not to buy those warranties. Instead, take the money you would have spent and put it into a "repair/replacement" fund and if you are lucky you won't have to dip into it. You will in effect be self-insuring yourself. I'd wager that most CNET readers are buying enough electronic equipment that this would be a winning strategy for the vast majority.
i usualy buy when it comes to products that i know will go through products that i take with me on the go, cause those i treat my products through hell. But when it comes to products that don't have too many moving parts or are usually stationary, i.e tv's DVD players, computer screw it. But things like digital camera and pda's, laptops i'd defintely go for it.
It worked for us
I purchased a notebook PC for my wife as a gift. Because it was a recertified unit, it only was given a 90 day warranty. Knowing that the life expectancy of a notebook is greater than 90 days and less than 5 years, I decided to go with a 2-year extended "warranty" which meant that if anything should go wrong, I would be covered for repairs.
As it turned out, it was a very good choice, as it took four returns (including an upgraded model)and all of the extended warranty period before it was resolved to our satisfaction. That is to say that the machine now works, and I do not get "blue screen of death" displays every hour or so.
In most cases, a repar bill would be greater than a replacement product. In our case that was not true, in fact it would have been a disaster financially at the time.
One guide that I use is the moving parts issue. an item that has moving parts will wear out and need replacing. Find out how much replacement parts cost and whether you will need a technician perform the task. If the parts are inexpensive and you can handle the chore yourself, then perhaps an extended warranty is not right for you. But if the cost of replacing a common part requires an expert, you can expect that the cost would be less for the warranty.
Most HDTV and home theater systems will last the length of their warranties, provided they are not "new" technologies that have yet to be field tested. Portable gear has less of a life expectancy due to the bumping and jostling of those delicate components inside. So it would be a good idea to see what others have experienced first, which is always a good idea before spending your hard earned money on a new toy.
Hell to pay with service contract
BE SMART, circumvent this mode by accessing this warranty/extended warranty FARCE by using the
1 -the products own term warrantys, 2-store policy,
3- use the credit cards coverage .
Hell nO !!!
Read the posts and *****.
Also from me personally ,a big consumer of goods
for years I put myself through the ringer with the contract thing.
One of the things WRONG with these contracts is
YOU MUST QUALIFY YOUR CLAIM
What this means is you are GUILTY until proven innocent
You most likley will be HUMILIATED in the PROCESS and
you end up , in effect WORKING for THEM ,though you are the PATRON !!!???
NOT unlike your DAMNED auto insurance you will be ROBBED of your time, just to make a claim ......and what might that be worth? ... factor-in that cost as you hand over your hard earned cash $$$$$
HELL NO !!!!!
The only time I have ever purchase and extended warranty is with my computer. Apple sells their insurance at a premium, just like their products. Apple Care is good for 3 yrs and for my iMac was $160, for my iBook it was $199. Thus far I have never had to use them, but EVERY user will tell you to buy it. Small price to pay in the event your expensive computer goes BLUE on you. Here's hoping I never have to use it!
They are worth it....to the seller
Companies like Best Buy and Circuit City depend on these to stay profitable. They spend little of the monney they take in on repairs. Most electronics break almost immediately (covered under normal warranty)or last for many years (long past the extended warranty). Essentially you are covered for the period in which there are virtually no claims. Think about what you have spent on repairs versus the cost of warranties for all those items. You can readily see it does not make sense to buy them. It does not matter the cost of the item. It is a numbers game. Only insure what you cannot afford to cover if lost, your home, car, ALL of your personal belongings, your income...not tv's and stereos.
I purchased a Toshiba laptop computer about four years ago from Circuit City. As it was a higher end laptop, I chose to go with a 4-year waranty (I think the most expensive was a five-year) and I'm a sure glad I did.
Since I've had the computer, the power cord has caught fire three times (an unusually poor design), the DVD-RW drive has failed (twice), the joints in the screen failed, and the power port on the back began to lose its connection to the motherboard. I had to use the warranty a total of four times and have basically replaced about 70% of the parts in the computer through this program.
While this might have been a design fault, I would recommends extended warranties for anyone purchasing a laptop computer. I would extend that advice to anything over $700 or so.
Extended warranties, replacement warranties, etc.
I purchased an e-Mac from the local Apple Store in February 2005 running OS X-Panther. I got a warranty included by also purchased Apple ProCare ($99.00) which extended my warranty to 3 years. Two days ago, after having problems changing the OS to OS X Leopard, the Apple Store diagnosed the problem as a defective motherboard and today, I will pick up my e-Mac with a new motherboard, etc. for free. It was worth it.
In July 2005, I purchased a Sony running Win XP/Home from my closest Fry's Electronics. I had a 1-year parts and 90-days labor free included from Sony but I purchased a 2-year warranty from Fry's for $69.95 for the CPU only (not the monitor). I thought that I then had a 3-year warranty total but I was mistaken. So, when the computer no longer functioned at all..I took it back to the same Fry's. I was not happy to find out that the CPU was out of warranty but, I really read my manufacturer's warranty (poor) and Fry's warranty until I understood it correctly. I paid $70.00 for diagnostics and was told that there was nothing wrong with the CPU. I brought it home and the same problem. Windows would not load at all. I took it back along with the Sony keyboard and mouse and...the keyboard or mouse was the problem. I bought a Logitech wireless keyboard and mouse, brought it home and, voila, perfect. Had I purchased a 3-year Fry's warranty, I would have saved $70.00. I am still not sure if the Sony keyboard or mouse would have been replaced by Sony (I doubt it) or by Fry's (?). But, it was worth the $70.00 to find out what the problem was and it was really worth it to pay $40.00 for the wireless keyboard and mouse. I love Logitech! Next time, I will buy a Windows computer from Fry's gladly, pay for the 3-year extended warranty BUT ONLY if Fry's carries Windows XP computers and not ONLY Windows Vista (any flavor). I may be old but I'm not stupid! I got 2-years peace of mind by paying only $69.99. It was worth it.
In August 2005, I purchased a JVC Dual Tuner DVD/VHS Recorder Player from the local Best Buy for $350.00. I also purchased a 2-year replacement warranty for $20.00. Almost immediately, it ceased to load. I saw on the Internet that this model was defective. I took it back to Best Buy who sent it to the JVC repair facility in L.A. and it was repaired for free. Afraid to use it and struggling with the difficult installation process, I rarely used it when, it ate my new DVD and failed to load again. I just took it back to the local Best Buy. They checked it out and junked it. I went down the next day and was given a choice of a Panasonci or LG replacement. I was leaning towards the Panasonic but the salesman said that he had purchased the LG and it was really great. I took the LG. It was worth it.
So, when it comes to any warranty, I will get the longest available one on major purchases after carefully reading the paperwork BEFORE buying.
Depends on What it's For and What it Does.
If I can see it up front and know what I'm getting with it, and it makes sense that the item I'm buying is worth the added value of an extended warranty, then sure. A computer, definitely. A video card, probably not as it will usually fail before the store's warranty is up. Also, if the store waits till the last minute to hit me up with extended warranty information so I need to make a decision at purchase time - on-the-spot, I'll usually say no and either not return or cancel my purchase. Tactics like that are deceitful, even if supposedly well intended. All the pertinent information should be presented up front to the purchaser BEFORE they get to the checkout stand.
Should You Purchase an Extended Warranty?
As a mathematician, I say that the probability that you will need an extended warranty on an item you purchase is less then 1 chance in 10.
However, in my 60 years of experience I have had at least 4 instances where I received this kind of warranty and it paid off.
On my 87 Chevy, I got an extended warranty on the engine. Two years later I needed the engine repaired. Instead of a $1000 bill it was paid for by the warranty.
I was talked into a $300 warranty on my furnace by Sears in 1992 and a year later, the furnace had to be completely rebuilt. Instead of a $1500 repair job, the cost was just the price of the warranty.
I was talked into a warranty on a laptop in 1994 for $150 and 3 months later the screen went out and would of cost $800. The warranty covered it.
In 2006 I bought a new Sony DVR for $699. I had a year warranty (not an extended warranty) and a month later the unit failed. Sony refused to honor their own warranty for no apparent reason. If I would have had an extended warranty, the store I purchased the unit from would have had to repair or replace it.
Finally, I received a credit card in 2006 that carried a warranty of an extra year over the regular warranty (no exra cost to me). Two days after the manufacturers warranty, a laptop that I had purchased completely failed. I had the extra year because I had used the credit card with the special policey and got a new and better computer.
From the above I say that I have saved a lot of money with extended warranties and got burned once when I did not have an extended warranty.
If you can afford to buy an item and replace it within a year, probably forget the extra warranty. However, if you can get such a warranty for free (ask your credit card company) it could be very helpful.
IT DEPENDS ON WHAT THE FACTORY GIVES YOU...THE SAD STORY
THIS IS THE SHORT VERSION OF THIS DISASTER STORY IT WAS WAY WORSE
AFTER 2 MO OF USE THE POWRE SUPPLY BD. BLEW ON MY WESTINGHOUSE 47" LED
NO HOME REPAIR SERVICE UNDRE THE WARRANTY.. EITHER I HAD TO TAKT IT TO A REPAIR SHOP (22 MILES AWAY) OR SHIP IT BACK FOR REPAIR TO WESTINGHOUSE AT MY EXPENCE..
AFTER TAKING IT IN TO THE REPAIR CENTER THEY TOOK 2WKS TO TROUBLE SHOOT THE FAILURE THEN ORDER THE PART.HERES WHERE IT GETS BAD...
ETA ON THE PART FROM WESTINGHOUSE WAS 3WKS..THEN ANOTHER 3WKS..THEN 4WKS..AFTER 6 CALLS TO WESTINGHOUSE.I CHECK ON LINE FOR THE PART & IT WAS AVAILBLE RETAIL FOR ABOUT $250... ANOTHER CALL TO TELL WESTINGHOUSE THAT INFO & THAT I WANTED IT SHIPPED BACK TO THEM AT THERE EXPENCE FOR REPACLEMENT WHICH THEY AFTER 2 DAYS FINALY SAID OK....SUPRISE SUPRISE 4 DAYS LATER THE PART ARIVED AT THE REPAIR CNTR AFTER 10 MONTHS ITS UP AND RUNNING FOR NOW
IMO, no they are not worth it.
Plain and simple. The warranty companies are in the business to make money and they have to pay salary's etc. and claims and still make money. The only way to do this is to spend less that you take in. That means in the real high majority of cases, they are not worth it.
Extended Warranties are not worth it!
I worked in a call center receiving calls for computer, printer, appliances warranty claims. My job was to get people off of the line without giving them anything except a little trouble shooting. There are lots of hoops to go through to get a claim even started. The warranty companies do not want to pay from what I saw, read the fine print for loopholes.
I bought one on a dvd player with ipod adapter. The price of the dvd player was $149. The price of the insurance was 19.99. Two months after getting the dvd player it died. I walked in to Best *uy and they gave me a brand new one. Not only did they give me a new one they gave me a newer model which was more expensive. I guess the only person who can anwser this question will be you. I have had a good and bad experience with mine but some higher end elctronics that require a much more expensive coverage such as a laptop may not be worth it. For instance Circuit *ity a laptop may cost $999 and the extended warranty is $369. By the time your factory when the warranty runs out and your laptop takes a dump you could have taken that $369 and put that towards a newer laptop that is priced around $600 with a new factory warranty. I actually purchased a toshiba laptop with this warranty from Circuit *ity and I had some Motherboard issues with it. Sent it back to the third party warranty company 5 times and the problem was still not fixed. So be very careful who you use and what is in the fine print. You will hear negatives and positives from both side but in reality it all comes down to if it is feasible and in you budget.
extended warranty is it worth it?
I must say a resounding 'NO!' I work in retail and it is a big scam. Trust me. I have been in retail going on my 20th year next year, and a lot of these so called extended warranties are a joke. The manufacturer has a warranty already in place. There is no need for a longer one. Think about it. Did you buy one for your toaster? Your microwave? Your cell phone? Most electronic appliances or goods last MUCH longer than the extended warranty. These warranties are offered for the store to make an extra buck. They are counting on a ratio of like 90% or greater of the goods they sell to not break down, so the money you paid for the longer warranty goes in their pocket. Of course some items do break down, and sometimes after normal warranty terms, thus an extended warranty comes in handy. Ask around to all your friends, family, workplace associates and find out how many of them really needed that extended warranty if they did in fact purchase it. I'd be willing to bet it's less than 10% that actually found they needed it. Listen, most companies make good on the gear they sell anyway. Call customer service and ask nicely and you will get the item replaced or repaired. The last thing they want is a no-repeat buy when you go to buy another household gadget. Tell them you're buying a competitor's model next time! Another thing to think about-- coming from a retail enviroment, usually all the dealer does is get a replacement or a credit issued to their store for a returned or damaged item anyway. Who's to say the item wsn't sitting on the shelf for a LONG time. Trust me, the manufacturer will make good for their authorized dealer. That means they should for you as well. I can't begin to tell you all the stuff I see get sent back to manufacturers that was broken well beyond warranty only to be replaced with new.
No good at Best Buy
Learned my lesson at Best Buy. Bought the extended warranty and had to invoke it at 12 months. Replacement lasted only 35 days. The extended had terminated when I brought it in even though it was for 36 months!!! Big waste of money pushed by scam artists.
When considering an extended warranty, consider your usage. If you will use a device more than is normal, and your usage does not disqualify you from coverage, it just might be worthwhile to get the extended warranty.
I have a very large family, so an extended warranty on a washing machine and a dishwasher is sensible. However, we don't use electronics any more than others -- though we may have more devices -- so extended warranties are not so obviously good for such electronics.
I bought a Brother BW Laser printer a year ago. DSuring tax season it ran fantastic, then about May 07, it was, shutting down my computer every time I went to print. I paid little over a $100, so did not take out warranty. IF I had I would not have had to pay for another Brother HL2070 in Oct 07, now I have 2 yrs, and usually do take out warranties. BUT, first, check what the return policy is. IF it is a large item, who pays for the shipping? Like all insurance, I get a replacement.
Your choice, I say NO!
As stated several times, there are a lot of things to consider. On the whole I choose to buy products from reputable manufacturers and say "No" to any extended warranty. Electronics are pretty considerate componenets. They either fail short term or last quite awhile if treated correctly. (surge suppressors where needed, correctly connected, etc) Reputable manufacturers in my experience will go overboard to protect their reputations when there is an "iffy" issue with regard to thier warranty.
One suggestion when dealing with a salesperson trying to sell you a warranty. Use an anology they can relate to. I purchased an inkjet printer for $120. The salesperson insisted on me purchasing an extended warranty for $39.95. I stated the manufacturer's warranty was one year. By that time this printer would be antiquated I could probably buy something twice as good for less. It's the current nature of the industry. Then I asked him, "If you bought a new car for $24,000 and your salesman offered you an extended warranty for $6,000, would you go for it?" He replied, "$6000!! Are you nuts! Of course not!" "Well", I said, "that equates to 25% of the purchase price, exactly the same as you're trying to get me to do." He dropped the issue without further pressure.
One time I made an exception to this rule of mine and that was with a business purchase. Running multiple desktops and depending on a server for our business, I did purchase an extended and very inclusive plan. The difference here being that I need these units to function constantly to survive, need repairs done ASAP in case of failure, and can write off the expense. But for home and personal puchases, I feel one chosen repair (vs replacement) would still be less than having extended warranties for everything I buy. I'll take my chances.
warrantees: the disconnect between employee & employer
I often notice that when I buy a product that offers a warrnatee the salesman goes into a more agressive mode when it comes to the warrantee. It is clear that regardless of the benefit to you, the benfits are great for them since they can simply replace the article for wholesale cost or they are quite adept at fixing the common problems that arrise. This of course does not intepret into a a crummy deal for you since if the thing does go kaput you usually are happy you did have the warrantee.
However, what I have found with items bought at deep discount places like Wallmart and Harbour Frieght, they are more then willing to allow a return on the item inorder to avoid a pesky cog in the wheel making an issue out of things( this is because they get the stuff so cheap it is simply easier to shut you up then to waste energy and goodwill over a petty transaction. As for fixing things like washing machines. I did once have to call a seriveman for a big fee, but once he was here I asked him if he moonlighted and he quoted me a figure that was a fraction of the hourly rate charged by the dealer. Finally coming from a sales background in copiers I remember that if you make an inquiry for a service plan after the same call, they sometimes will allow you to start one in leiu of that service call. It is all in the way that the dispatcher or service technician makes his commission. Usually they will make zilch for taking a service call but they are often encouraged to sell contracts with a financial insentive. An astute employee will know how to work the system so that they get a contract and you don't get nailed for an astronomical hourly fee - which quite often exceeds the expense of the entire contract for a single call. The reason for this is obvious the collective birds in a hand are worth the upfront revenue over the chance event of a service call.
I find that it is almost never the warrnatee that is the issue it is learning how to work the system within your provider make sure that you seperate the company from the idividual employees you will be amazed at the difference between the two and how accomodating theemployees usually are at cutting you a deal ( I am sure that it may have something to do with them getting underpaid and often a little contemputous of the management.) Just remember dealers etc are always trying to figure out ways to get more money from you why not see what you can do to challenge their own greed let their agents help you in your quest- you would amazed how helpful they will be.
Depsite what many people sway about losing the hometown feeling of private shops, the big retailers with this disconnect between agent and dealer goes a long way to getting you better service than the mom and pop shop. I can remember trying to return things to Howie Rosenberg's hardware store and going through hell to get a refund for a .50 bolt that was the wrong size. I used to try to go in on friday afternoon since I knew he was eager to run off and celebrate the sabboth rather then argue over .50 with me.
I once bought a $950 54 inch projection TV along with the extended warranty. After about the six months the TV developed a blue haze around some characters on a few channels. I called the store and they said a repair man would come out to look at it. A few days later I was told the TV was obsolete and they were refunding me the cost of the TV and I could keep the TV. We still have it and use it.
Last year I took my digital camera to Florida. It is a small unit and I put it in my pocket. The camera rubbed against my car keys and scratched the screen. Even though it was only cosmetic SONY replaced the screen. A few years before that I had my video camera on the beach and the kids kicked sand on it, it was cleaned under the service agreement.
Dell recently pretty much rebuilt my 4 year old laptop computer. The LCD screen, processor and motherboard were replaced in my home with no hassle. DELPI replaced my SKIFi with a SKIFi2.
These warranties are a good buy and a must.
It all depends--THERE IS NO ONE SINGLE ANSWER
As someone who was an executive in an insurance group for 20 years before becoming a professor of finance (including such things as warranties), I have a solution that is the best way to approach the problems. Remember first that most people buy fire insurance on their houses, but a tiny number actually have a fire. Of course I did, and we had a fire that cost over $50,000 in damages.
Insurance or warranties are to protect against something you DON'T WNAT TO HAPPEN, SO DON'T FEEL BAD IF IT DOESN'T--CONSIDER YOURSELF LUCKY.
Second, whether you should or not depends on your attitude towards risk v. safety, or how "lucky" you think you are. It does NOT DEPEND ON INCOME. If you buy "it", then what is important is how VITAL it is to your life. It is one thing to consider a warranty on a TV and quite another to consider one an item that you will suffer sever consequences without. A water heater, or furnace might be examples. If one goes off, and you are a little short at the time, it would be very comfortable to simply call someone and have it fixed or replaced quickly. Convenience can be a second reason. How BADLY WOULD YOU FEEL HAVING TO DO WITH OUT IT EVEN THOUGH IT ISN'T A THREAT AND CAN YOU AFFORD IT--AS OPPOSED TO ITEMS IN CATEGORY ONE.
LAST, and very important, what is the reputation of the warranty issuer (who many NOT be the store of your purchase). This is hard to figure out, but others who have bought there, and the store's reputation can help.
Yes and Maybe
I worked at circuit city around 8-10 years ago. best buy had the same types of warranty as circuit city that time. basically, they were worth it on things that the company can write off if returned. these included dvd players, cd players, some stereo equipment (not receivers), and other small ticket items.
the bigger ticket items like TVs, receivers, computers - they all had to at least attempt to repair them before they replace them.
when i worked there, i would buy the warranty on the dvd players, cordless phones, etc. when the period was about over, i'd bring it in and tell them it wasn't working. 99% of the time, i got a replacement that was worth the original purchase price (part of the agreement - dunno if it still is written that way or if it's a depreciated amount).
i bought the warranty on my LCD because it cost $250 on a $2,500 television. you can often use the warranty as a negotiation tool, since they want to sell it so badly. i basically wanted best buy to price match B&H (a local NYC retailer). they said they don't normally match B&H (cause they have ridiculously low prices), but i mentioned the extended warranty and they had no problem with it.
the warrant would have cost me $400 on the best buy purchase price, but they reduced it the $700 to match B&H, and i only paid $250 for the warranty.
for an LCD screen, this is worth it. if any pixelation occurs, they'll try to fix it, but won't be able to, and i'll get a brand new TV worth $2,500. you can be sure in a year or so i'll be calling for service, just to try and get a replacement. who cares if it's not actually broken? try and use the warranty as much as you can, and you might get a free upgrade!
i wouldn't buy it on a computer though, because it's usually easier to do it yourself (if you have the knowledge) or at least find someone (a friend, a kid's friend) that does have the knowledge and you can probably pay $10 or buy them a beer to look at it. computers are very easy to fix now and the components are very inexpensive in my opinion.
Sometimes - but usually not.
I did get my moneys worth when my HP laptop just quit. As it was my first laptop I bought into the extended warranty sales speach and since my motherboard failed the month after the factory warranty expired, it was a bargain. However, most of the time I think these warranties are a waste of money.
A huge moneymaker
I worked electronics retail for a while and we were instructed to really push extended warranties. They were a great revenue source and in many cases we made more on the warranty than we did on the item.
In my 40+ years of experience with electronics of all types, I have discovered one common theme. Electronic components have their highest failure rate almost immediately after being put into service. If they last through that initial "burn-in" period, they tend to last almost forever. Therefore, most failures are going to occur while the manufacturers warranty is in effect. This is a bit hyperbolic, but you get my point.
In general, I think extended warranties are a bad buy for the above reason. There are a couple of cases where I would recommend them. If the item is from a non-mainstream manufacturer, the warranty might get you quicker service than you would otherwise have access to. If you are a total non-tech type, you might be willing to pay for the peace of mind, whatever the cost.
Is it worth it?
With most of us, when we go in to purchase an appliance we are looking for the "best deal". Invariably we are stuck between the one we want and the one we can afford. Then we get to the check out line and they want to tack on another $30-$60 for the ext. warranty. I've started asking myself, "can I afford the warranty?" If the answer is yes then I go back and look at what the price was one the one I wanted. Many times it's within the price of the one I could afford plus the ext. warranty. If I purchase the item with a platinum credit card I have an automatic extended warranty depending on the credit card. It's worth a phone call before you go shopping for just about any big ticket item, whether it's a frig or big screen plasma, to call your credit card company and ask them what their policy is on extended warranties for items purchased with their credit cards. Terms and warranties vary from card to card. American Express Platinum doubles the warranty period for free. (Except for the cost of your annual fee). But if you're already paying for it why not use it.
Check all the credit cards you carry. Take an hour and call each customer service number on the the card and ask them "point blank", "What's your policy for extending the warranty on items I purchase with my card?" If they don't know always ask for a supervisor. Write down the person you spoke to, what they said and if it sounds too good to be true, ask them to fax or email you the details of the warranty.
Over the years I've saved myself several hundreds of dollars and a lot of aggravation.
notice from Circuit City about extending warranty service
This is NOT wholly in alignment with whether extended warranties are worth it or not. But Circuit City just mailed me a form to apply for an extended warranty on a HP A1700N. I decided that I had better get a small problem serviced on it. The earphone jack in the front plays Stereo but the back port doesn't. I took the computer to Circuit City and Lo and Behold, they told me they are NOT a service center for HP's even though they sell HP's. I told Cliff, the service man, that service is the reason I buy computer from computer oriented stores, and if Circuit City can't help me get this computer fixed, I knew another store within sight that will help me with computers I buy there. Circuit City just lost another customer, and I will write to Circuit City headquarters exactly how I feel about the corporations computer service policy, it stinks. BestBuy has always gone the mile or 2 with me, even with a Sony I bought from Circuit City 3 years ago. They asked no questions,
Reimbursed at end of Ext. Warr.
The ones I've usually gone with (for high-ticket electronics usually) are the warranties where at the end of the warranty, if I haven't used it, I get reimbursed 50% of the warranty. The challenge is to be organized and mark it down, so you can collect on that because they aren't going to remind you usually.
You're paying for peace of mind, just like life insurance. You want it in case you need it, but you hope you don't have to use it, so this partial reimbursement of unused warranties is the best attempt at having it both ways.
If you end up needing it, you will appreciate it!
I have bought 3 year extended warranties on both of my computers from NEW of Florida (Sam's Club). In both cases I ended up using them, within the 4 years (initial 1st year by the mfgr, then 3 more under extended warranty). I can tell you that many people never need to use them as statistically only about 2% of electronic items fail within the warranty period, but I am a 'power user' and depend on my computers, so I am glad I got them. Now a shameless plug for Sam's Club warranties. You can buy your products anywhere you choose and have 30 days to take your receipt to Sam's Club and purchase either a 1 year or 3 year extension to the manufacturers warranty. You avoid the preasures put on you to buy 'right now - before you leave' at the store of purchase, plus you pay less than half of what you probably would at the place of purchase.
It all a crap shoot
I bought a Dell laptop and after the MFG warranty was over the piece self distructed, first the battery and then the connection between the keyboard and the display. The laptop should have lasted beyond thier 90 day warranty.