Question

Of the following, which factor or factors would make it more likely that buying an extended warranty is a good idea?

I. The extended warranty overlaps with the manufacturer’s warranty.
II. The product has a high probability of needing repair in the next few years.
III. The product is a major purchase that you are unlikely to soon replace.
a.
I and III
b.
II only
c.
II and III
d.
I, II, and III

Answer 1

c. II and III

Reason: An extended warranty is more worthwhile when a product is likely to need repairs (II) and when it’s a major purchase you expect to keep (III). If the extended warranty overlaps with an existing manufacturer’s warranty (I), it’s redundant and less attractive.