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Not Sucker Bait, Just Smart
Thanks to Samsung, I learned the hard and expensive way that extended warranties are a very good idea. Unfortunately, I didn't buy one for my last t.v. and Samsung was glad remind me of that while they were washing their hands of me. I guess it was my own fault for expecting my t.v. to last more than 3 years.

These days, most manufacturers are only offering a 1 year warranty for their products which doesn't give us consumers a whole lot of confidence that they're motivated to make quality products for us that'll last longer than that. Many stores offer their own extended warranties but usually for a pretty hefty price. That's why I was not only glad to find the receiver I just bought here on Amazon for a great price but SquareTrade's 3 year extended warranty for only more. It's good peace of mind to know that if something happens or it stops working for some reason, the repair or replacement is taken care of.

After the purchase, they emailed me quickly in response along with easy to follow instructions on what to do next. Honestly, I hope I never need them but it's good to know they're there if I ever do. And at , that's a small price to pay for peace of mind or a new receiver. Recommended.

Square Trade is a great idea.
Bought a refurbished Xbox online and I got the notice from Square Trade to add a Warranty for a nice price. Figuring that Xbox's are not all that reliable with their Red Ring of Death I decided to try it out. Well 3 month's later we got the E74 code, I contacted Square Trade they sent a prepaid label, and within a week from sending it to them I was refunded my money for the purchase. I will use Square Trade again when I purchase the next Xbox which won't be a refurbished one, just in case I get another wonderful Red Ring of Death.

Sucker bait
Extended warranties are great products-- for the companies providing the warranties, but not for you.

Put simply, companies do not deliberately go into business to pay more than they collect ;-)

The warranty providers know pretty well how much they will pay to cover damage/replacement on all their policies aggregated together. They add a substantial profit margin and divide by the number of policies to get the price they charge you.

Their business model is like a casino running a clean game-- the bet is still a bad deal for you even when the company is smart enough to pay you promptly with a smile (just as it's shortsighted for a big casino to cheat).

In short, the expected return on your investment on an extended warranty is almost always negative. You can only expect to win if you know you are a harsh user who is -much- more likely to break your item. Even then, it only works if enough other ordinary users continue to buy the warranties.

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This argument does not imply that you should never buy insurance. If you lose your home, for example, the actual cost impact you feel is likely to be much larger than the dollar cost of rebuilding it because you will not be able to raise the money on your own after a disaster. This allows the insurance company to take in more than it pays out, making a profit, while still providing you a useful service.

It works because the premium you pay is less than your expected cost of a disaster, even though the premium will be more than your expected dollar receipts from claims.

A good touchstone is that you should not choose to insure unless a worst-case loss would be financially crippling.

Great source for a warranty!
Xbox 360 Elite purchased new for our son lasted one year before ROD killed it. Immediately filed claim with Square Trade, and got prompt response and satisfaction. They even paid for the shipping of the unit for death confirmation! They are my source for warranties; now have them for washer, drier, wii, and new xbox. Too bad they only cover exercise equipment through Amazon, or I'd have bought more.

SquareTrade Warranty
I purchased several warranties from SquareTrade over the past few years and recently had to make a claim on one of them. The process was fast and 100% pain free - they refunded my full purchase price!