Watch CBS News

Are Warranties Worth The Extra Money?

MINNEAPOLIS (WCCO) -- When you buy new electronics like a new iPad or iPhone, there's always that moment you consider a warranty. But, are those service plans worth the extra money?

Jeremy Jones saved some serious cash buying a new smartphone on eBay. Then, six months later, Jones says, "the power button stopped working and the screen kind of cut out on me."

Fortunately for him, he had a warranty. Jones purchased one from Square Trade for less than $25.

"When I mailed them the phone back they sent me a check for $125," said Jones.

According to Square Trade, more than 75 percent of smart phones break by accident. That same 2010 survey compiled from claims found that one in three iPads break within 3 years and one in three iPhones break within 2 years.

Then, there are computers.

"What I see probably the most is spill damage on laptops," said Tom Schmidt, a computer repair technician at First Tech.

Schmidt says a lot of customers who don't purchase warranties are rather disappointed when their computer breaks.

First Tech employees say about two-thirds of paying customers walk out with a warranty. Those plans range in price, but they aren't as expensive as the average bill to fix a computer.

"Out of warranty on a laptop or an iMac, typically you're looking at $400 to $500 for a repair," said Schmidt.

Apple does have an AppleCare Plus for iPhones, which covers two incidents of accidental damage. It's $99, and it'll cost you $49 if it needs to be repaired.

Whether it's a computer or a phone, consider the options.

"I would say for $25 for a cell phone device, it was probably a good investment," said Jones.

On the other hand, Consumer Reports found when it comes to things like major appliances, warranties aren't always necessary.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.