When is an extended service plan worth the investment

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When Is An Extended Service Plan Worth The Investment? You did it. You finally worked up the gumption to buy the one product you’ve debated purchasing for months. Whether it is a brand new car, technologically advanced appliance or the latest electronic gadget, you’ve made it through second guesses, financial calculations and a lengthy checkout line to finally make your purchase. Relieved and excited, you smile as the sales associate rings up your coveted item. As you daydream about how wonderful life will be with your new “toy,” you realize the sales associate asked you a question. You beg their pardon. “I asked what sort of protection plan you’d like. We have a number of extended warranty options,” the associate replies. Your smile fades. Apparently the decision making isn’t quite over after all. ***** Does this sound familiar? For many people, the question of whether or not to purchase an extended warranty (more appropriately referred to as an extended service plan, or ESP)* is a tough one, and may not be a decision they are prepared to make. When is such a purchase advisable? Will it save money, or just add cost to a purchase? The answers to these questions depend upon a number of factors specific to each purchase. Consider the following before you reach the point-of-sale in the future, and you may save time and avoid stress: *NOTE: While many store associates and consumers consider the purchase to be an extended warranty, this is often not the case. Many extended plans are not truly adding on to the original manufacturer’s warranty, but rather, extend the post-warranty service options and are therefore more appropriately referred to as an extended service plan, or ESP. What is the product and who produced it? Reputation is always an important consideration when attempting to predict the longevity of a product. Some types of items are statistically more likely than others to need repairs in their first few years of use. According to Consumer Reports, for example, computers, self-powered lawn mowers and certain refrigerator designs top the list of items most likely to fail. It is important, also, to consider whether the product you’re buying incorporates cutting-edge technology or is a first-generation product. With less of these products existing in the marketplace,


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