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Manufacturers have a warranty period where repairs are covered. The extended warranty is usually sold by the retailer to extend that plan and provide additional coverage for the device you purchased.

One of the drawbacks of the extended warranty is that it usually runs concurrent with the manufacturer's warranty period, and in essence, you're paying for a warranty on a warranty for a period of time. Some retailers may allow you to hold off on making the purchase on the extended warranty until the manufacturer's warranty runs out. If you can choose this option and wait, it might save you as much as a third of the cost and buy you some extended time. The trick is to remember to follow through at the appropriate time.

If you're purchasing one of the new digital TV's, (trust me on this)...you'll probably need the extended warranty.

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Q: What is an Extended service plans?
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