A Scientific Rant On Extended Warranties

Before we begin,
Every rule has an exception.

The product failure rate has been observed and well documented.
Products have a lifetime, and their failure rate follows a bathtub distribution. The failure rate can occur at any time during its lifetime. Albeit failure rates go into three phases, each phase has a different failure rate.

Phase 1:
The early failure phase. The failure rate is high, and a standard warranty is beneficial. Moreover, this usually reflects how confident the manufacturer of their product is.

Phase 2:
The useful-lifetime phase. The failure rate is low, and most salespeople try to sell you an extended warranty for this period.

Phase 3:
The wear-out failure phase. At this phase, the failure rate increases due to age and usage, and most extended warranties end before reaching this phase.

For this reason, I don’t recommend an extended warranty. But you may ask, what about the extreme cases when an extended warranty is beneficial? Well, should you buy a product that has questionable reliability?