Retailers are pushing hard to get you to buy extended warranties, or service plans, because they’re cash cows. Stores keep 50 percent or more of what they charge for warranties. That’s much more than they can make selling actual products. For the consumer, extended warranties are notoriously bad deals because:

– Some repairs are covered by the standard manufacturer warranty that comes with the product
– Products seldom break within the extended-warranty window–after the standard warranty has expired but within the typical two to three years of purchase–our data show.
– When electronics and appliances do break, the repairs, on average, cost about the same as an extended warranty.