Don't Waste Money on Extended Warranties for Your PCs and Electronics

When you purchase a big-ticket item—say, a phone, laptop, or TV—some kind of warranty is expected. It's typically called an express warranty, because it's supposed to be clearly expressed. Sometimes it's called a "guarantee," because it's supposed to guarantee that your device works. It doesn't even have to be written down: A TV huckster saying, "It'll last 20 years!" is a legal guarantee.

Whatever they're called, warranties are usually limited in time and scope. Thus, you'll frequently experience an item's reseller (sometimes even the manufacturer) trying to (up)sell you on extra coverage. That coverage is called an extended warranty, or sometimes "protection plan," "service plan," or "service contract." The latter terms are more accurate, as no one can really extend a warranty except the original manufacturer.

Getting a protection plan means you pay more upfront, depending on the item and the coverage. In theory, you do so to make sure you have even more time with the product, should it break in that pre-set amount of time—a few months, a year, or a few years.

Most protection plans won't break the bank. For example, for an LG C2 55-Inch Evo OLED TV purchased via Amazon for $1,296, a three-year protection plan from Asurion is $129.99.

Best Buy sells the same TV with a 2-year Geek Squad protection plan for $174.99, so clearly, it pays to shop around even for extended warranties.

There's a whole ecosystem of third-party firms that provide extended warranties, especially for consumer electronics and appliances. Companies include the aforementioned Asurion, Assurant, and AllState Protection Plans ("serviced by SquareTrade"). You may have coverage with one of them and not know it, as they're used by many retailers. Amazon works with several of them.

These companies aren't offering extended warranties out of altruism. They're doing it because service plans make crazy amounts of money. The market for such plans (including for automobiles) was worth $122.89 billion in 2021 and is projected to hit $274.94 billion by 2031, according to Allied Market Research. Automobiles make the most money for warranty providers, but mobile devices and PCs are a close second.

Is an Extended Warranty Worth the Money?

For the vast majority of people, the answer is no. Consumer Reports says it's "money down the drain."

Here's the big secret: Repairing most items typically doesn't cost that much. The cost of a single repair is usually less than the cost of an extended warranty. Consumer Reports once calculated the median cost at $136 for a service plan for electronics but only $16 bucks more for the repair. The difference is negligible. Just save the money.

A manufacturer's express (limited) warranty is typically good enough that if something breaks down in a short amount of time, they'll do you better than repair an item—they might replace it completely. It's always worth contacting the manufacturer. Take it all the way up the chain of command to big bosses when you beg for some help or recompense.

By federal law, if you buy something for over $15 new at a retailer, it has to let you see any written express warranty. Do that before you pay for an extended warranty; you may discover in the fine print that you don't need to spend anything extra.

Tales of extended warranties paying off certainly exist, but you are far more likely to find an expert opinion that states flat out: Saving up a little cash for a possible repair is a much smarter investment than actually purchasing the extended warranty. At the very least, read the fine print on any extended warranty thoroughly, because there will be plenty of limitations on the coverage.

Frequently, extended warranty repairs take forever or require several tries to get it right—you see that happen a lot less when you simply pay for a fix. You may be directed to send your broken product away for who knows how long. The chance of the warranty allowing a local establishment of your choice to do the fix is very unlikely, so you can't even reclaim the device if a repair takes too long. You are almost always better off dealing with the manufacturer for repairs—it has a reputation to uphold.

Better Ways to Warranty: Cards and Laws

Your credit card may offer all the extended warranty you need. As long as a product—even a refurbished product—has some kind of manufacturer warranty initially, most major credit cards offer an extended warranty. The caveat is that you have to use that card to purchase the product, of course.

Even a card with no fees might offer protection plans. You'll find this perk on cards from American Express, Capital One, Citi, Chase, and many more—but it's not guaranteed (Discover cards don't have it). It pays to check out the terms of service or give the card provider a call and ask; the number is on the back of the card.

Keep a copy of the receipt and original warranty when you buy—you may need them to make a claim on the credit card extended warranty, if it comes up.

Local laws—depending on your state—may also offer protection in the form of an "implied warranty" or "statutory warranty," meaning if you buy something, it is supposed to work, defect-free, for a certain amount of time. That time can vary but is typically four years. You see this a lot for cars, especially.

Don't buy products labeled "as is," or you might not have much recourse to go after a manufacturer via your state's implied warranty laws. ("As is" doesn't work in 11 states or Washington D.C.) Always know the retailer's return policy as well: Don't buy if the reseller says you can't return a product within a reasonable amount of time.

Your best insurance is to buy a product you trust from a manufacturer you trust. Start the process by reading lots of reviews.

Should I Get an Extended Warranty on a Phone?

This depends on a major factor: How often do you think you'll break your phone? In 2018, 66% of owners damaged their phones in the first year—but that research was issued by SquareTrade, one of the major extended-warranty companies. Research from 2021 said two phones screens crack in the US every second. But that may say more about the number of phones being used than our collective clumsiness.

If you personally break your phone every year—really break it, not simply crack the screen—then a service plan such as AppleCare or Samsung Care, directly from the manufacturer, is probably worth buying. You may also find insurance plans with replacement options via your mobile carrier, many of which are also administrated by third-party companies such as Asurion. But the monthly premiums are typically not worth paying once you also pay a deductible.

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If you're the type to scratch or crack a screen once or twice, don't worry about it. Those problems are easily fixed for relatively little money (at least in comparison to paying for an extended warranty). You also can turn to your homeowner's or renter's insurance in some cases (more on that below). And often, you can even fix it yourself.

Should I Get an Extended Warranty on a TV?

The rate of repairs on a modern flat-screen television? About 7%; most last 4.5 to 6.8 years. Skip the extended warranty. Instead, make sure you've purchased that big screen on a credit card with the extra warranty protection. (That advice goes for any electronics purchase, period.) The average TV repair costs only $200, which you can save for.

Should I Get an Extended Warranty on a Laptop or Desktop PC?

One of the reasons retailers push extended warranties is that if enough are sold, they can reduce the retail prices of the products—and sell even more of them. But some of the savings trickles down to you, assuming you don't then purchase the extended warranty and start the cycle anew.

Consumer Reports puts the rate of repair of PCs at around 24%. That's pretty high, but consider that PCs these days are not that expensive—you can usually get a laptop cheaper than a high-end phone. They're not going to break, in most cases, unless you put them in a risky situation. And most laptops have a five-year lifespan of usefulness at best.

So a laptop service plan might be worth paying for—if you're lugging it on planes, trains, and automobiles; up a mountain; or to a gamer LAN party where drinks are likely to be spilled. Again, carefully consider your personal usage. Read the fine print: An extended warrant might cover only certain things and not others, such as "accidental damage." Which means a spilled milkshake on a gaming laptop ends that relationship.

Don't bother to buy a service plan for a desktop or a gaming console.

Your homeowner's or renter's insurance could cover your laptop and other electronics in many worst-case scenarios, such as vandalism, fire, or theft—even if someone steals it when you and the laptop aren't at home. Then you can replace it with insurance funds (minus the deductible). No extended warranty is going to cover those things. List your laptop, phone, and more with your insurer to be sure. It's not going to cover a cracked screen or battery failure, but that repair is best paid out of pocket, as noted above.

Read more about insuring electronics (and everything else) at Lemonade, an app-based "peer-to-peer" online-only insurance provider. It shows the list of perils covered by home-owners or renters insurance, which can include the usual (fire, theft, smoke) and the unusual (riots, volcanic eruption).

Should I Get an Extended Warranty on Appliances?

No—most manufacturers' warranties on big-ticket appliances last a lot longer than they do on consumer electronics. Like, for a decade.

Should I Get an Extended Warranty on a Car?

Nope. Especially if it's an offer that arrives in the mail or via robocall weeks or months after you made the purchase. Most are scams. Even at the dealership, they're simply trying to get you to come back to the dealership for service, when you can probably find a cheaper mechanic you trust elsewhere.