With the holidays and gift-buying season approaching, you'll likely hear a lot about extended warranties. Consumer advocates' advice will range from "think twice about them" to "don't buy them." Clark Howard, the radio talk show host, and Consumer Reports say you don't need them - ever. In fact, CR placed a full-page ad in USA Today last year saying "no matter what the salesperson says, you don't need an extended warranty."

Consumeraffairs.com has a recent article with the "think twice" approach. The idea is that if you bought an extended warranty for every expensive item you own, you'd be paying way more than the likely repair costs. Let's say you have 15 expensive items warrantied in your home (including cars). How many are likely to need repairs? 1 or 2, maybe? Those two repairs will probably cost less than all those warranty payments you've made. We see consumer complaints about the effectiveness of extended warranties: they don't pay for what the consumer thinks they should; and they're 3rd-party companies, so they sometimes go out of business and thus can't fulfill their guarantees.