chakravyuha

A device is statistically going to either break down within a year of it’s operation or would break down after an “extended” period of time. You are covered by the manufacturer’s warranty for the first year and extended warranties would not cover you over a very long period anyway. If you put these two facts together then it seems that the extended warranties are not worth it. There’s also the problem of actually putting these warranties to use. Customer service agents are reluctant to do this kind of work and it’s quite possible that the actual service contract would be handed off to a third party. When the time comes, you will have to deal with these third parties who you have no relationship with.

[Source]: Planet Money podcast

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