I posted this in another forum; maybe this will help you with your decision.
I am not a big fan of extended warranties; they are usually nothing but pure profit for the people you buy them from. Here is what Consumer Reports has to say about them:
This holiday season, shoppers are expected to spend over a billion dollars on extended warranties for laptops, flat-screen TVs, other electronics, and appliances. And almost all of it will be money down the drain.
Retailers are pushing hard to get you to buy extended warranties, or service plans, because they're cash cows. Stores keep 50 percent or more of what they charge for warranties. That's much more than they can make selling actual products. For the consumer, extended warranties are notoriously bad deals because:
- Some repairs are covered by the standard manufacturer warranty that comes with the product.
- Products seldom break within the extended-warranty window--after the standard warranty has expired but within the typical two to three years of purchase--our data show.
- When electronics and appliances do break, the repairs, on average, cost about the same as an extended warranty.
We have long advised against extended warranties. In fact, we feel so strongly that consumers are being misled about them that last year we took out a full-page ad in USA Today to warn shoppers.
In general, we have found extended warranties to be a bad deal for the customer. The most cautious consumers might want to consider an extended warranty for a repair-prone brand, provided that the warranty is both inexpensive and comprehensive and the cost of repairs tends to be high.
In years past, we've said that rear-projection microdisplay TVs might be one of those products for which a warranty is advisable, but even for these products, an extended warranty looks like a poor investment for most consumers, judging by new data. Even though these sets have been three times more likely to need repairs than other types of TVs, our data show that most rear-projection TVs have been trouble-free for their first few years. Most of those that did need repairs were covered by a standard warranty. That suggests there's less than a 1-in-10 chance you'll have to pay for a repair on a new projection set. If you do have to pay for a repair, the experience of consumers responding to our survey suggests it won't cost much more than a warranty would. Respondents who paid for any repairs out of pocket spent about $300 on average.
If you insist, consider an extended warranty on a rear-projection TV if:
- You buy a TV from a more repair-prone brand because it is very low-priced. (Brand repair history data on some leading brands is available to ConsumerReports.org subscribers.)
- You'll use the TV for 5,000 hours (the claimed life of many bulbs) within the time covered by an extended warranty, and the warranty covers bulb replacement.
- The warranty costs no more than $200 to $300, the cost of most bulbs.
There's mounting evidence that flat-panel LCD and plasma TVs have been highly reliable products requiring few repairs during their first three years of use. The overall repair rate for the 10 brands covered in our survey was 3 percent, with little difference between LCD and plasma sets. (Brand repair history data is available to ConsumerReports.org subscribers.) Even if your LCD or plasma set does need to be repaired, it will probably cost you less than you're likely to pay for an extended warranty.
Of the small percentage of sets with problems, most repairs were free, presumably because they were covered by the standard manufacturer's warranty. The few respondents who paid out of pocket for repairs spent an average of $264 on LCD sets and $395 on plasma.
Given the pricey repairs for these TVs, you may want to buy an extended warranty, especially for a microdisplay rear-projection model. It should cost no more than 20 percent of the purchase price.
An extended warranty for a plasma set costs $300 to $1,000 depending of the cost of the TV and the length of the warranty. But Consumer Reports suggests that buying one may be prudent. After the manufacturer's usual one-year warranty runs out, a service center will charge several hundred to several thousand dollars for repairs.
Before saying yes to any extended warranty, Consumer Reports recommends checking to see whether the credit card used for purchase provides similar coverage. Typically found with gold and platinum cards, these plans can extend the original warranty by up to one year. MasterCard holders can check the fine print for the words extended warranty, and Visa calls its program Warranty Manager Service.