If you are buying a car or major appliance, whether in a retail store, by catalog, or online, you may be offered a service contract. To many consumers, buying a service contract is like buying "peace of mind" from repair hassles. An estimated 50% of all new car buyers, and many used-car and major appliance buyers, purchase service contracts. The cost can range from $50 to $500, depending on the length and amount of coverage provided. Some consumers, however, may be paying for more protection than they need.