My son saved his money to buy an iPod. When it came time to pay, the salesperson strongly suggested a service contract. My son didn’t have enough money saved to buy the contract so I did. Are service contracts a good deal?
Most consumer columnists feel service contracts are a waste of money unless you plan to use a product heavily. It’s often said that service contracts cost over the life span of the item are four to seven times as high as repair costs predicted by industry-wide standards. Retailers push the contracts because they are enormously profitable. If a product is so unreliable that your son needs a service contract, have him buy a different product.