Extended warranties are priced to make the seller money — which means on average they cost you. Enter the price, the repair cost, and your honest estimate of failure odds to see the expected value and whether this one's the exception.
Inputs
$
$
%
Verdict
Skip it — on average it loses money
Expected payout
$80
repair cost × failure chance
Warranty price
$150
The numbers
Expected net value
-$70
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How it's calculated
Expected payout = repair/replacement cost × the chance you'll actually need it.
Net value = expected payout − the warranty's price.
A negative net value means, on average, you'd keep more by self-insuring.
When failure is likely and a repair would be expensive relative to the price — or when you simply can't absorb the worst case. The math flags the rare good ones.
What failure chance should I use?
Be honest and check reliability data for the product; sellers count on people overestimating it.