We’ve all been there. You go to the store to buy a television, toaster or tablet computer. The friendly sales associate helps you find just the right one. 

Then, before you can even reach for your wallet she says, “Of course, you’ll want the extended warranty on that, right?” 

“Why?” you ask. “A few seconds ago you told me I made a great choice.” 

“You did,” she reassures you. “But you never know when something can go wrong and these things are incredibly expensive to repair. Why take the risk?” 

So, what do you do? 

In the December issue, the editors at Consumer Reports advise readers to resist the extended-warranty pitch. 

“We believe most people don’t need extended warranties,” executive editor Greg Daugherty told me. “Most products are reasonably reliable these days. If they are going to break it’s probably early on when the manufacturer’s warranty is still in effect or way down the road after the extended warranty would have expired. So you’re buying protection for a fairly limited period of time.” 

Service plans aren’t cheap. Consumer Reports says they can increase the price of that item by a third or more. And stores keep 50 percent or more of what they charge for these plans. That’s normally more than they make on the products they sell. That’s why the salespeople push so hard to get you to buy. 

“We found that repair costs very often aren’t much higher than the cost of an extended warranty,” Daugherty said. “So in the odd event that you’re going to need a repair, it probably won’t cost you any more than you would have paid for the warranty. And if you don’t need a repair, you get to keep that money.” 

Repair service after the sale can be lacking
Based on its surveys of subscribers, Consumer Reports cautions that an extended warranty doesn’t guarantee that you’ll get the item fixed.  The salesperson might exaggerate the extent of the coverage or there might be limitations in the fine print you don’t know about. 

“We found that people sometimes get a runaround or that it’s just slower to get something repaired by an extended warranty than to take it to the repair shop and get it fixed yourself,” Daugherty explained. 

Worse yet, the company might refuse to make repairs under the service contract. ConsumerWorld.org recently ran a story in its Mouse Print section about a woman in the Boston area who paid $298 for a four-year service contract for her washer and dryer back in 2009. 

Recently, the washing machine broke. The repairman said he could not fix it under the service plan because the repair would cost $1,300 and the washer was only worth $589. They would pay her the $589, but that was less than the cost of a new washer.

Can they do that? Consumer World’s founder, Edgar Dworsky, checked and indeed the service contract gave the company the option to do that – to declare the product “un-repairable.”

The lesson here is to read any service contract you plan to buy before you buy it, and see if it includes the right of the servicer to refuse repairs or to cap its liability,” Dworsky cautioned.

Another way to go
You may already have extended warranty protection from your credit card issuer. Many cards now automatically double the manufacturer’s warranty by up to a year for items you charge to the card. 

The coverage varies from card to card and there are limitations. For example, MasterCard normally limits this extra protection to products where the original warranty is one year or less. So check the terms and conditions on your credit cards before you go shopping. 

“If this perk comes with your card, you’d be foolish to not to use it and maybe skip the extra coverage,” Dworsky said. 

A word about portable computers
You might want to consider a service plan if you buy a laptop or tablet computer. There’s a greater chance of damage with a portable computer. Consumer Reports suggests a service plan to cover accidental damage. 

Both Dell and Sony sell stand-alone coverage for accidental damage. These two-year plans range in price from $50 to $70 for Dell and $50 to $100 for Sony, depending on the model. 

Another way to go: add coverage to your homeowners, renters or condo insurance policy. Consumer Reports notes that Liberty Mutual’s home-computer endorsement (with a $50 deductible) is just $20 a year. 

The bottom line
If you buy reliable brands and products, you should have little need for an extended service contract. 

Consider this: These contracts are highly profitable for the warranty companies that issue them because relatively few people need to use them. 

Despite all the downside risks, maybe you just can’t live without the “added peace of mind” you get from a service contract. Okay, but you don’t need to buy it on the spot. Ask for written information about the program (or where you can find the contract online) so you can study it and see what’s really covered. You should also search online to see if others have had problems with the company providing the service contract. 

Remember: Verbal promises from a salesperson don’t mean anything. Neither do the hyped-up claims made in a brochure. The terms of the contract are what count.

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.