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In a YouTube tutorial, Alejandra explains the financial aspects of extended warranties. She mentions that 12% of the money paid for extended warranties covers the statistical probability of the item breaking. The remaining funds go towards salaries, overhead, profit, and marketing fees. She warns that the dealership could make a significant profit from selling extended warranties, with likely minimal repair costs for the consumer. So, buying a $1500 extended warranty could mean the dealership makes $700,000, while the average repair cost would only be around $180.
