Extended Warranty: Worth It?

After you buy a laptop, phone, major appliance, or car, you often get an offer to purchase an extended warranty. How do you know if it’s worth the extra money? It depends on two main considerations: First, how likely will it break after the standard warranty? Does this type of product or brand have a history of breaking? If yes, you may want an extended warranty, but only if your credit card doesn’t already provide extra protection and it’s a large purchase. Second, what’s the cost of replacement or repair compared to the warranty cost? Could you easily pay to replace or repair this product? If so, it may not be worth it. However, if the cost of the extended warranty is reasonable, it may be a good idea if it protects you from a major financial burden. For example, a $10 warranty on a $100 external hard drive could be a waste, but a $100 warranty on a $1,000 laptop could be very helpful.