The term "extended warranty" is often a misnomer; only manufacturers offer warranties. What you're being offered at the electronics store is an "extended service contract" to repair or replace your purchase if it breaks in the next three or four years_some coverage restrictions apply.

Should you do it? It's a betting game. When you buy an extended service contract, you're betting that your new gadget will break in the next three years. The seller of the contract bets your gadget will work like a dream for three years.

You "win" if you have to get your device repaired or replaced under the terms of the contract. You win big if, say, your $200 contract winds up covering an $800 repair.

Contract sellers win if no problems covered by the contract pop up: They gambled and won your $200.

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WHEN DOES BUYING AN EXTENDED CONTRACT MAKE THE MOST SENSE?

When buying a laptop, according to data compiled by Consumer Reports.

With all the bumping and banging those portable computers suffer, it's understandable that 43 percent of them fail, according to nearly 1 million Consumer Reports subscribers who responded to a survey on electronics breakdowns. So if you're investing $1,000 in a new laptop for your student, and the laptop is going to be jostled about in a backpack every day, spending another $200 for a service contract on the laptop might give you peace of mind, if it covers accidental damage from handling.

But keep this in mind: The wording of extended service contracts usually means your protected product will be repaired or replaced with a similar, refurbished device.

That's important to know because if we're talking about a broken laptop, it could get swapped for a replacement, and you can't be sure your photos, movies, e-mail contacts, music and personal files will get transferred. (But you always back up what's on your computer, right?) Common laptop repairs include a damaged hard drive, a malfunctioning motherboard or a broken LCD, says George Krogul, of repair shop Crescent Technology in Elk Grove Village, Ill. One of the laptop problems he sees most often involves the DC input jack, the point where the power adapter connects to the computer.

Searching the Web for "laptop repair flat rate," you can find repair shops that charge a flat rate of $175 to $200 (plus shipping) to inspect and fix most problems.