Consumer Reports agrees. In its May 1998 issue it advises against buying an extended warranty to supplement factory coverage, explaining that the warranties are of great value to the retailer but of little value to the buyer. These numbers hardly support the fear factor some extended warranty sellers promote. Plus, experience shows that most breakdowns occur within the first few weeks of use, when the item still is covered by the manufacturer's warranty. Profit margins are getting squeezed, so sellers try to find creative ways to increase profitability without increasing prices.
Extended warranties provide a backdoor way to increase store profits.
Pick reliable brands . Check out the store's return policy and service reputation. Read the manual . Contrary to popular belief, you should not file owner's manuals in black holes. If you want to make the most of your purchase, go through the manual and follow the instructions to test all the features.