Usually decline extended warranties on electronics
Extended warranties commonly cost 10%–50% of the product price. Their margins can be many times those on merchandise. At Best Buy in 2003, they generated over half of profit from only 3%–4% of revenue; that margin comes from customers' payments.
What it takes
No warranty fee. You bear any repair after the original warranty, an event the source considers relatively uncommon.
What you may gain
Warranty prices commonly range from 10% to 50% of the item price. Industry estimates cited in the paper put gross margins at 50%–60%, about 18 times ordinary merchandise margins. In 2003, extended warranties accounted for only 3%–4% of Best Buy revenue but over 50% of profit. These are US retail data from the 2000s.
Context & considerations
Margin figures came from industry estimates cited by the paper, Business Week 2004, rather than its own measurement. This reasoning applies when you can afford one repair. If a device is essential to earning income and you have no backup, calculate separately. Screen-breakage cover also deserves its own calculation from your likely breakage frequency and premium.
Research & references
Chen T, Kalra A, Sun B (2009). Why Do Consumers Buy Extended Service Contracts? Journal of Consumer Research 36(4):611-623. https://doi.org/10.1086/605298