This study was designed (1) to empirically distinguish between buyers and non-buyers of an extended service contract according to eight groups of variables, and (2) to develop a profile of consumers most likely to purchase extended service contracts.

A mail survey was conducted from April 1993 through May 1993 with a randomly selected sample of consumers (N = 991) who had during of October, November, and December 1992 purchased a new television set from a seven-store retail chain. After an initial mailing and two follow-up mailings, 440 questionnaires were returned of the 957 that were received by respondents (34 were returned as undeliverable). This represented a total response rate of 46% (440/957). Thirty-one of the questionnaires were returned blank or less than half complete by respondents unable or unwilling to participate. The final usable return rate was 42.7% (409/957).

Regarding distinguishing between buyers and non-buyers of the extended service contract, Chi-Square analysis revealed that demographically and psychographically the two groups are similar. Buyers were more likely to be employed in less prestigious jobs and less likely to read the daily newspaper. Buyers and non-buyers differed considerably regarding motivations, perceptions, and future buying intentions, however.

Regarding a profile of consumers most likely to buy an extended service contract in the future (the dependent variable), six independent variables produced an R² of -4470, meaning that 44.7% of the variance in buying an extended service contract in the future could be explained by the linear combination of these predictor variables. The best predictor of the dependent variable was previous experience with extended service contracts. The other Significant variables were "Extended service contracts offer peace of mind," "I know of people who did not buy the extended service contract and later wished they had," "T would advise my friends not to buy extended service contracts," "Extended service contracts are worth the money people pay for them," and "People who take care of their products do not need to buy extended service contracts."