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The Wirecutter Show

The New York Times

Are Extended Warranties Ever Worth It?

May 27, 202628 min
Summary

In this episode of The Wirecutter Show, host Christine Ciser Classet sits down with senior reporter Liam McCabe to demystify the complex world of extended warranties. Drawing from over a decade of experience reviewing home appliances and electronics, McCabe argues that for the vast majority of consumers, extended warranties are a poor financial investment. The discussion highlights the distinction between manufacturer warranties, which are automatically included with a product, and extended warranties, which function as optional insurance plans. McCabe points out that because these plans are priced to guarantee high profit margins for retailers and insurance companies, the statistical likelihood of a consumer recovering the cost of the premium through a repair is very low. Instead, the hosts suggest a strategy of self-insuring by setting aside savings to cover potential repairs, which is often more cost-effective in the long run. The episode also explores the psychology behind these purchases, including loss aversion and the influence of high-pressure sales tactics. While acknowledging that there are rare, specific scenarios where the convenience of a service plan might be worth the cost, the hosts conclude that consumers should generally approach these offers with skepticism and avoid them for most household items.

Updated Jul 1, 2026

About This Episode

If you've ever bought a cell phone, an appliance, or any other high-value item, you've likely felt pressured to buy an extended warranty for peace of mind. However, these protection plans rarely pay off for most people.

 

In this episode, Wirecutter senior writer Liam McCabe explains why extended warranties are generally a “terrible investment,” how incredibly profitable they are for warranty companies, and the very few instances when paying for extra coverage might actually be worth it.

 

This episode covers: 

  • The difference between manufacturer and extended warranties: A manufacturer's warranty is automatically included for free as a promise against defects (usually for 30 days to a year). An extended warranty, on the other hand, is an optional, extra-cost protection plan that you have to actively choose to buy.
  • Why you probably won’t use an extended warranty: People tend to overestimate the failure rate of most products. And the likelihood that the product will fail during the extended warranty period is quite low.
  • How extended warranties mainly benefit warranty companies: Extended warranty companies generally only pay out around 25% of what they take in, keeping 75% of the money. By comparison, health insurance companies generally pay out 80% to 90% to policy holders.
  • When it’s worth getting an extended warranty anyway: Sometimes it’s worth getting one of these warranties, even if you’ll likely lose money. It could make sense if it offers you peace of mind, the product has a bad reliability reputation, or you’re buying something for an accident-prone kid.

 

Additional reading:

 

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The Wirecutter Show is executive produced by Rosie Guerin and produced by Abigail Keel.Engineering support from Maddy Masiello and Nick P

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