[ale] I'm confused

[Chris Fowler]

On Fri, 2010-11-19 at 11:54 -0500, Tom Freeman wrote:
> My understanding is that for most situations the extended warrenty
> offered at time of sale is almost pure profit for some company. I am
> sure that there are times and conditions where an extended warrenty
> makes economic sense but I personally don't know what those
> conditions might be. 

Kids.

my oldest is 7.  We had 4 DVD players for the car by the time she was 6.
The 3rd one was purchased from Target and I bought the warranty for $20.
A year later it died.  Target mailed me a check for the cost of the
player.  Basically I paid $20 to have a DVD player with dual screens in
the car for a year.

I bought my netbook at SAM during Black Friday last year.  1 yr
warranty.  I bought a 3 year for $25.  If it breaks, I'm covered.  

One issue I think these companies are having is that since the price of
electronic goods are falling their warranty costs are falling as well.
Their profit margins are suffering.  Why pay $300 for a warranty on a
laptop you paid $300 for.  That would be dumb.  Back in 2003 I paid $250
for one on a $1500 laptop.  Over the course of the warranty it went to
the shop 3 times and I got 3 batteries.  I sent it to the shop for any
little reason.  One time the latch was failing.  They replaced it.