20 percent. That is the ceiling Consumer Reports puts on the whole question: never buy a warranty that costs more than 20 percent of the purchase price of the item. It is a useful number on Black Friday precisely because sale prices break it. A plan priced against the regular price in October can quietly become a much larger share of the deal price in November, and the till screen will never show you that share. It shows a monthly figure, or a modest lump sum next to a large saving, and asks for a yes in about ten seconds.
Run the percentage first. It takes one division, and on the published examples below it settles most offers before any other question matters.
The percentage test, on real checkout examples
Consumers' Checkbook collected the offers retailers actually push at checkout. A Samsung TV priced at $329 at Best Buy came with a two year Geek Squad plan at $59.99 or a five year plan at $69.99 (US prices, as published). Do the division the screen skips:
| Offer (as published) | Plan price | Share of item price | 20 percent test |
|---|---|---|---|
| Samsung TV, $329, two year plan | $59.99 | 18.2% | Passes, barely |
| Samsung TV, $329, five year plan | $69.99 | 21.3% | Fails |
| iPhone 17, $799, AppleCare at $119.99 a year | $119.99 | 15.0% for one year | Passes for year one only |
Two things stand out. First, the longer plan on the same TV costs only $10 more and still fails the test, because the test is about the share of the item's price, not the gap between plans. Second, the iPhone line passes for a single year and stops passing the moment a second year is added, since two years at that rate reach about 30 percent of the phone's price. A plan is bought one year at a time in this math, whatever the screen calls it.
Context for why the ceiling sits where it does: Checkbook reports that retailers selling plans for third party insurers typically keep commissions of 40 to 60 percent, and that analysts estimate less than 20 cents of every dollar spent on extended warranties is paid out in claims. Consumer Reports adds the reliability side of the same picture, noting that only 3 percent of TVs in its surveys needed repair during a two year period, at an average repair cost of about $200, while TV warranties themselves ran about $200 to $400. When the plan costs roughly the average repair and the failure chance is that low, the percentage test is doing real work.
Stack the layers before paying for a third one
Most Black Friday buyers already hold two layers of cover before the till offers a third. Lay them out in order:
| Layer | What it covers | Extra cost |
|---|---|---|
| Manufacturer warranty | Defects in the first year, typically | Included |
| Credit card extension | Doubles the manufacturer period, up to one additional year, on most cards that carry the benefit | $0, if the full price was charged to that card |
| Paid protection plan | Defects beyond that, plus accidental damage on plans that include it | The percentage you just calculated |
The card layer is the one people forget they own. Tangerine's plain language summary of the benefit is typical: the manufacturer warranty is doubled up to one additional year, so a one year warranty can run to two, purchase assurance covers most new items against loss, theft or damage for 90 days, and the full purchase price has to be charged to the card for any of it to apply. That last condition is the trap inside the free layer. Split the payment across two cards or part gift card and the extension may not apply at all, so the card decision has to happen before the plan decision.
What the free layers never cover is the drop. Card extensions cover hardware failure and exclude accidental damage, theft and loss. So the paid plan's real product, in most cases, is accident cover plus defect cover in years three and beyond. Price it as that, and the question sharpens: what is accident cover on this specific item worth, for this specific household?
Break even, with dated Canadian prices
Prices checked November 2, 2026. AppleCare+ in Canada is now sold as a subscription: for iPhone 17 and 16 models it is $9.99 a month or $99.99 a year, and for iPhone Air, 17 Pro and 17 Pro Max it is $13.49 a month or $134.99 a year. The annual price is the honest one to use, because paying monthly for a full year on the standard models totals $119.88 against $99.99 billed annually. With the plan active, a screen or back glass repair carries a $39 service fee and other accidental damage a $129 fee, each plus tax, with unlimited accidental damage incidents, and battery service is covered once a battery holds less than 80 percent of its original capacity.
Now the break even. Two years of the standard plan cost $199.98. Add one screen incident at $39 and the total spent is $238.98. Against that, Apple Canada's published estimate for an iPhone 16 screen replacement out of warranty, as reported effective October 29, 2026, is $365, or $39 with the plan, and battery service is $135 out of warranty against $0 with the plan when capacity is under the 80 percent threshold. So one cracked screen inside two years puts the plan ahead by about $126 on that model. No incident at all puts it behind by the full $199.98. The plan is not good or bad in general; it is a bet priced at $238.98 against a $365 bill, and the household's own drop history is the only honest odds anyone has.
Apply the same shape to a TV or a laptop. Take the plan price, add the incident fee if the plan charges one, and compare the total with a published out of warranty repair estimate for the model in front of you. If the seller cannot name the fee or the plan has no published repair comparison, that absence is information: the percentage test from the first section is the fallback, and it fails most offers on its own.
The 60 second till check
- Divide the plan price by the sale price, not the regular price. Over 20 percent, decline and move on.
- Ask what the plan adds beyond the manufacturer warranty plus your card's extension. If the answer is only defect cover in year two, you may already own it free.
- Ask for the per incident fee in dollars. Add it to the plan price before comparing anything.
- Check whether accident cover is actually included. It is the main thing the free layers exclude, and the main reason a plan can earn its price.
- Remember the decision can usually wait. AppleCare+, for one, can generally be bought within 60 days of the device purchase, so a no at the till is not a no forever. Take the receipt home and run the numbers without a queue behind you.
Success looks like this: you leave with either a declined plan and the arithmetic that justifies declining it, or a bought plan whose total cost, fees included, sits under a repair bill you have actually seen published for that model.
When the plan is the right buy anyway
The math above argues against most plans, not all of them. A plan earns its percentage when the item is carried daily and dropped often enough that one incident inside the coverage window is a reasonable expectation rather than a fear, when the out of warranty repair estimate is a large share of the replacement cost, or when the item is business critical and downtime costs more than the fee structure. Those are household facts, not till facts, which is exactly why the percentage test and the 60 day window matter: they move the decision from the loudest moment of the purchase to a quieter one, with the same numbers and no audience.
One last fine print habit. Whatever you decide, keep the receipt, the warranty card, and a note of which card paid in one place. The free card layer only pays out to a buyer who can document the full charge, and a claim two Novembers from now is won or lost on paperwork saved this one.
— Penny Hughes, Money Writer — Saving Desk