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Replying To:
After many years of experience... (none / 0) (#8)
by Anonymous User on Fri Nov 16, 2007 at 07:43:14 AM PDT

None of what I heard surprises me. I've spent 30+ years in repairing, then managing life cycles of electronic devices. I worked for companies that pushed me to sell service contracts/extended warranties (same item, different phrase), and have spent the last 18 years in hospitals managing the medical equipment inventories. Fact - Most service contracts have a profit margin of at least 30%. Generally, once they have your money, the vendor is done with you. Example - in a reasonable large hospital; in-house costs for maintaining equipment run about 5%/year of purchase cost. Contract costs run 8-12%/year. This is for medical equipment; if it breaks people can die. The extended warranties for consumer items can easily run 20-25%/year. If it breaks, you're inconvenieced, not dead. If you buy the contract, you've been had.


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