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#73947 by highq
Sat Jan 29, 2011 1:46 pm
There just popped up in my mailbox an offer from Ooma to let me buy up to two years of an extended warranty for my Telo, at $39.99 per annum.

There lurks in my mind some old advice from Consumer Reports to eschew extended warranties for digital and/or electronic equipment, so I'm inclined to pass on this offer.

Any counterarguments?
#73958 by nn5i
Sat Jan 29, 2011 4:47 pm
No counterarguments from me, only full agreement. Most failures in electronic equipment (after a few iterations of the design) are of the kind engineers call "infant mortality". Almost all of the non-infant-mortality failures occur after extended service. In between, failures are few. The resultant curve (failure rate plotted against time) is usually called a "bathtub curve" because it's high at the ends, and low and flat in the middle.

Extended warranties are a bad deal. They have to be a bad deal: if the statistical return for the consumer were greater than 1.0, those selling the warranties would go bankrupt.
#73993 by highq
Sun Jan 30, 2011 9:41 am
That last remark almost invalidates insurance in general.
#74005 by nn5i
Sun Jan 30, 2011 1:38 pm
Indeed it does -- almost. I never insure anything I can afford to lose, for that reason. If the loss would wipe me out, the choice doesn't depend purely upon statistical return: it's then the choice between some risk of being wiped out, and no risk of being wiped out. So I have car insurance, but I never buy extended warranties. Never.

I think, once years ago, I had to replace a microwave oven on which I could have purchased an extended warranty, and had not. It wasn't so bad -- by that time the darned thing was several generations old anyway. The one that failed had cost $400 or so at Sears, and the replacement cost $127 at Sam's and was bigger and better, with more features and greater ease of use.

Doubtless in another couple years Ooma will have new models too, eh?

Cheers! I enjoy your posts.

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