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In this tutorial, Alejandra explains the reasoning behind not purchasing extended warranties, emphasizing that a significant portion of the fee paid goes towards covering the statistical probability of the item breaking. She notes that typically, only 12% of the money paid for extended warranties is used for repairs, with the rest going towards salaries, overhead, profit, and marketing fees. Using the example of a $1500 extended warranty added to a car finance plan, she highlights that dealerships often make a significant profit, while the average repair cost is only $180.
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