When you buy a new TV, you automatically get the pitch: "Would you like to buy the extended warranty?"
As we ramp up to the holiday shopping season, you're likely to get pitches for extended warranties on more than just TVs. Electronics, appliances, and other products are all fodder for the salepeople to push this insurance.
But the latest stats from the December 2013 issue of Consumer Reports are illuminating on the subject, and I want to show you why you don't need that extended warranty on a TV or a laptop computer either.
Consumer Reports finds the failure rate of flat-screen TVs is 3% during the first 4 years of ownership. Their survey took a look at everything from premium brands to private labels. Even the failure rate of off-brands you've never heard of is typically only from 2% to 4%.
Panasonic was the least trouble-prone brand of flat-screen TV with just a 2% failure rate over 4 years. Dynex, a Best Buy private label, had only a 3% failure rate. The most trouble-prone brand was Westinghouse, with a 7% failure rate.
Laptops, however, generally have a higher failure rate. Over 3 years of ownership, the failure rate of your average laptop is 11%. Even at that higher rate, it still does not warrant you buying a warranty!
One thing to note about about Apple. The failure rate on Apple laptops is only 6%, according to Consumer Reports. So you pay more for Apple, but it's nearly twice as reliable as other brands of laptops. Some of the least reliable brands are Asus (13% failure rate over 3 years); and Dell, Lenovo, and Sony, all 3 of which have a 12% failure rate.
When I go to the store, I have salespeople tell me that my opinion of extended warranties is taking food out of their kids' mouths. Don't be guilted into buying an extended warranty when the numbers show it's not necessary!
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