Is an extended service plan a good idea? That is a tough question. I guess it would depend on what you are buying. Some stores you go into try to sell you an extended plan when you buy a pen and pencil. It's because their sales staff make extra coin on the transaction. I have purchased a few and got stung on the deal and it didn't end up saving me any money.
Case in point was my XBox 360. The Future Shop girl told me that they were basically garbage and that I need an extended warranty. So I knew they had problems and bought one. As it turns out she was right and mine broke. When trying to use my warranty I was told that MS covered all red rings of death and Future Shop would not help me. I ended up sending four or five back before I bought a PS3. If Future Shop would have honoured their deal, given me a new one and dealt with MS I would still be playing Halo3. It was big waste of money.
If you are purchasing a big ticket item I would research on the Internet before shelling out on an extended warranty. Find out how often your item breaks and what about they breaks. See if the store warranty covers their major problems and ask what more value added you are getting out of an extended warranty. Finally, google you item and warranty see what others have to say. You will be surprised on what you can learn.
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