Extended warranties are heavily promoted as ‘‘peace of mind’ for the consumer, particularly when buying appliances such as washing machines and TVs.
But in the modern age of high-quality manufacturing, is appliance insurance really worth it? It can be confusing. We take a look at how they work, the best deals on extended warranties and the all-important ‘before you buy’ checklist.
It’s worth checking before considering purchasing an extended warranty as you may already be covered.
Your Consumer Rights
The consumer rights act 2015 already provides you with protection. Goods must be fit for purpose, of satisfactory quality (linked to how much you paid for it) and as described.
Up to 30 days – if these standards are not met, you have a legal right to return any goods within 30 days and receive a full refund. Make sure you act quickly!
Up to six months – if the goods develop a fault then the manufacturer must prove the issue wasn’t present when you made the purchase. You have to give them at least one chance to make repairs, but if this or a replacement doesn’t work, then you’re entitled to a full refund (except with cars).
After six months – the responsibility switches and it’s down to you to prove the fault was there originally.
Up to six years – is when you can make a claim through the small claims court for faulty goods (five years in Scotland).
Pro Tip: your consumer rights are against the retailer, not the manufacturer. So get in touch with who you bought the product from originally, not who made it
This is an agreement made by the manufacturer to you that the product is free from manufacturing defects. It extends your rights further than those covered by your Consumer Rights.
12 months – is the typical period that a manufacturers guarantee covers.
Pro Tip: you often have to register the guarantee to validate it, so make sure you do this as soon as you’ve made the purchase.
Paid on Credit Card?
Section 75 of the Consumer Credit Act has your back if you paid for an item such as washing machine or TV using a credit card. This means that a credit card company is jointly responsible, along with the retailer, for the goods or service supplied. As a result, you can essentially make a claim against the credit card company.
Consumer Credit Act Section 75. — (1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.
This works particularly well if the company you bought the product from goes bust or are ignoring your calls and emails.
Item value covered: £100 – £30,000.
Pro Tip: credit card cover is really useful for expensive items so it’s worth paying on your credit card. Just remember to pay in full at the end of the month.
10 point ‘Before You Buy’ Extended Warranty checklist
If you’re not already covered and still want to buy that peace of mind, here are the top ten things to check before going ahead.
1. What are you trying to protect against and what does it cover? Mechanical breakdown (think about a service extended warranty), or theft/loss/accidental damage (check out insurance cover).
2. Is it a service agreement or an insurance policy? Insurance policies give you greater financial protection but may not provide the type of cover you’re looking for.
3. What are the exclusions? Limit on the number of claims per year? Do you have to use a certain repair company?
4. Is there a cover limit? (eg, £1,000 per claim).
5. Do you pay upfront or monthly? (monthly payments can add up over the long term).
6. What is the excess to pay? (usually, there is with insurance policies).
7. Is there an appliance age limit? (many won’t cover appliances over eight years old).
8. Does it include new for old cover?
9. Have you got the best deal? Can you get a discount by adding multiple appliances? Remember to negotiate and shop around.
10. How long do you intend to have the warranty for and what is the total cost of this over that period? How does that compare to saving that money then buying a brand new appliance if you have to?
Five ways to get cheap Extended Warranties
There’s always a deal to be had, even ways to get free extended warranties.
1. Use a free online tool such as Compare Extended Warranties. Simply enter the type of appliance, how much you will pay for it and how long you want the cover to last for. The rest is done for you.
2. John Lewis give you an extended warranty for five years on TVs, three years on their own brand products and two years on all other electrical goods.
3. Using specialist insurers such as Surewise.com are stand-alone policies with a range of cover options to fit different budgets. These can start bat as little as £11 / month. Just remember to check the details such as the claim cap and age of the appliance covered.
4. Insure multiple appliances. Using an independent insurer means you can usually add multiple appliances, such as a washing machine and TV to the same policy and get a discount. Remember to always negotiate.
5. Get extended warranties for free! Often, just taking the time to register your appliance on the manufacturer’s website can bag you another few year’s warranty. They get your email address for future marketing (mark as spam immediately) and you get free cover.
Can I cancel an Extended Warranty?
Within 45 days? Yes!
The Supply of Extended Warranties on Domestic Electrical Goods Order 2005 allows you to cancel if the warranty if it was for more than a year.
You have 45 days from the time of purchase to get a full refund, provided you haven’t made a claim.
After 45 days? Still yes!
You can still cancel but are only entitled to a partial, pro-rata refund.
How to cancel an Extended Warranty
There are a number of quality online resources to take you through this process, including letter templates.
As highly exciting as they are, understanding Extended Warranties and whether you actually need them could save you a small fortune. But please, whatever you do, remember to negotiate!
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EatSleepMoney.co.uk does not offer financial advice and is intended for reference/information only. Remember, you should always carry out your own research and/or take specific professional advice before choosing any financial products or services or undertaking any business or financial venture. Investments may go up as well as down and you may get back less than you put in.
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