Extended warranties say yes, sometimes.(CR Money)

On the way to the checkout counter, you have no doubt been waylaid by a sales clerk extolling the benefits of buying an extended warranty. But one of our editors, a battle-hardened shopper, was taken aback recently when the cashier at a chain store tried to sell him one for a $37 DVD player that would probably cost more to fix than replace.

An extended warranty kicks in after the manufacturer's warranty runs out. The insurer pays to repair or replace the item for a specified period of time, usually two to five years from the date of purchase. (Some extended plans start on the date of purchase, even though the manufacturer's warranty is also in effect.)

A variation, the replacement plan, is usually offered on less expensive merchandise and promises to give you a new or rebuilt product (or store credit) if the unit you bought conks out while the plan is in effect.

Once offered on costly appliances, extended warranties have trickled down to just about everything on the store shelves. For retailers, that makes perfect sense. When profit margins on the products themselves are being squeezed, extended warranties yield 40 to 80 percent profit, according to industry sources. But if these extended plans are a cash cow, just who's getting milked?

You may already know the answer. For years, CONSUMER REPORTS has cautioned against buying this costly coverage. Survey data from thousands of readers have shown that, generally, extended warranties cost roughly the same as the average repair. That's if you need a repair at all. As you can see in "Did You Know?" at right, many products, particularly those with tried-and-true technologies, are unlikely to need repairs within the first three years.

But sometimes an extended warranty may make sense. If you're buying a treadmill or an elliptical trainer with a standard warranty of less than a year on parts and labor, you should consider an extended warranty, which costs around $70 to more than $100 for two to three years of coverage. That's not bad, considering that a service call costs $75 to $100 before you pay for parts.

You might consider an extended warranty on a laptop computer. Laptops are expensive, fragile, and hard to repair. And the parts are made to fit within the manufacturer's unique case design. For that reason, you should buy the warranty from the manufacturer, not from the retailer. Also, with a manufacturer's warranty, you continue to enjoy access to free tech support.