PHOENIX — As you shop for the holidays, you've probably seen protection plans available on certain products for an extra cost.
Maybe it's a piece of exercise equipment, a nice bike or a TV. The plans are supposed to offer added coverage for repairs in case something goes wrong.
The protection plans used to be called extended warranties and that industry, including auto plans, is booming.
According to Allied Market Research, it took in $121 billion last year and that's expected to reach $274 billion by 2031.
The small cost of product plans can be alluring. We found bike plans costing $15 for two years, and $54 for 5 years of coverage on a TV.
But are they worth it?
Consumer Reports and other consumer advocates who've researched this usually say no. They say typical repairs are usually not costly and they say protection plans may not cover parts that typically are a problem.
I talked with one shopper who says he doesn't buy the plans after an experience buying a pair of shoes.
"They said there's an extended warranty for $10. I said, 'does it cover the sole of the shoes? That's what wears out.' They said no," he told me.
Also, many plans start at purchase, offering protection while the product is already covered by its original warranty.
Check to see if the plan offers any different coverage and check your credit card. Your card may already add a year or two of extra protection on purchases.
We found some no-annual fee cards offering plans.
The Citibank Costco Anywhere Visa gives you two years of protection beyond the manufacturer's warranty.
The CapitalOne Quicksilver card also adds two years.
Chase Freedom cards add one year to existing warranties.
American Express Blue Cash Preferred card gives you one-year extra year. It has no fee for the first year, but it's $95 yearly after that.
The one time a protection plan may be a good idea is on a smartphone.
Check to make sure it covers expensive issues you may have with your phone.
There are two big players in the protection plan industry, SquareTrade, owned by Allstate, and Asurion.
Check their complaints with the Better Business Bureau.
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