For many years, the shopper's dilemma has been: to buy or not to buy the extended warranty.
Late last year, the Consumer Reports magazine answered that question with a great big NO.
The consumer group said extended warranties are a waste of money because they are overpriced and because products rarely break within the three-year period that most cover.
Their recommendation is on target, but some people may have a hard time applying that rule in all situations. Even Consumer Reports had two exceptions: rear-projection TVs and Apple computers.
Eric Arnum, editor of Warranty Week in Forest Hills, N.Y., naturally disagrees with Consumer Reports.
"There is no such thing as a bad extended warranty, there is such thing as a bad extended warranty price," said Arnum.
"I think most consumers have learned to shop around for the best priced products. But they have to learn to go the next step and shop around for the best price of the warranty."
Arnum said warranty prices vary far more than the price of the actual products. He conducted a test to find the best warranty price for a 42-inch flat screen Panasonic television. He found one online at Crutchfield.com, an electronics store, for $1,900 with a three-year warranty for $500. His local Target had the same TV for $1,400. The three-year warranty there was $79.
The price difference gives consumers a lot of room for negotiation.
Brandi Ritter, a market research analyst at Stock Building Supply in Raleigh, N.C., said she negotiates everything when shopping, from price to warranty.
Recently Ritter got a local car dealer to agree in writing to refund her the entire warranty price if she doesn't use it before it expires.
"You have got to play hardball," Ritter said. She walked out of the deal, and the salesman called her twice at home before they settled on the price she wanted for the car and warranty, she said.
But Consumer Reports would say that even this is not the best deal for the consumer.
"You are still spending money betting the product is going to break," said Amanda Walker, senior editor of Consumer Reports. "It's an expensive kind of insurance."
Walker said the best strategy is to buy a reliable product and that consumers should research the best products before they buy.
If you must have a warranty to sleep at night, here are Walker's tips for getting the most for your money:
Check your credit card benefits. Some premium credit cards will extend the manufacturer's warranty.
Negotiate. There is a significant markup and profit margin on warranties. Some salesmen often earn more money on the warranty than the product itself. If they won't lower the warranty price, then ask for a discount on the product.
Shop around. Don't pay more than 20 percent of the purchase price of a product.
Find out how long the coverage last and what could void the coverage.
Check for add-on fees, such as a deductible for repairs.
Find out where you can return the product for service.
For heavy bulky items, find out whether pick up or in-home repair is included.
Check for a lemon law clause that allows for replacement after a few repairs.