Home appliances such as washing machines and ovens.

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.

Are you already covered?

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).

Find out more about the Consumer Rights Act 2015.

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.

Manufacturers Guarantee

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 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.

Find out more about section 75 of the Consumer Credit Act (1974).

Know more – read her for our guide on how credit cards work

Got Home Contents Insurance?

Get on touch with your insurer if the product you bought has been lost, stolen or accidentally damaged, as you’re likely already covered.

Pro Tip: insurance claims often come with an excess charge and will affect your No Claims Bonus, increasing the future price of your premiums, whereas warranties don’t.

What are extended warranties?

Extended warranties are products you can buy that ensures the manufacturer covers the cost of repairs, including parts and labour, beyond the initial guarantee (usually 12 months).

The devil is in the detail! What is and isn’t covered is down to the individual agreement and can vary a lot, so make sure to understand the exclusions before going ahead.

Though there are be subtle differences, Extended Warranties can also be known as:

  • Service agreements
  • Service contracts
  • Maintenance agreements
  • Appliance insurance

Common features of Extended Warranties:

  • Usually bought at the same time as the appliance
  • Payment can range from upfront on monthly
  • Last for a set amount of time (eg, three years)
  • Renew either annually or for a set period again.

Pro Tip: salespeople are often targeted to sell a certain number of extended warranties and earn commission. They have a self-interest in you buying them!

Are there different types of extended warranties?

There are two main types of extended warranties, with important differences:

1. Insurance Extended Warranties

  • You are directly insured by the warranty provider for the cost of repair or replacement.
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Offer greater financial protection should the warranty provider go bust
  • Generally focus on theft, loss and accidental damage (and may cover accidental damage)

2. Service-backed extended warranties

  • Also covers the cost of service and/or repair but is not an insurance product and therefore not covered by the FSCS
  • If the provider goes out of business, you are not legally protected for the money you have spent, nor you will not be able to make a claim
  • Typically cover mechanical breakdown (and maybe accidental damage)

Beware! The FCA have reported fraudulent activity where extended warranties are sold but are in fact insurance products and the provider is unregulated. What to do if you’ve been scammed.

Can you buy an Extended Warranty later?

Usually yes!

Often, even if you didn’t take the extended warranty beforehand but you need a repair, then the extended warranty can be purchased at that time, typically covering the repair plus a further 12 months.

Beware that they can often be significantly more expensive if taken out after the manufacturer’s warranty expires.

It’s worth getting a quote then weighing it up against the cost of paying for repairs or even a replacement.

Pro Tip: you can negotiate by offering to pay either upfront or monthly. Different providers have their preferences.

When ARE Extended Warranties for electrical appliances worth it?

Improving technology means standard models are becoming cheaper, but also increasingly sophisticated and expensive options at the high-end are available.

This can mean the cost of parts, the expertise to fix the fault or an entire replacement can soon get expensive. So a well priced extended warranty may bring peace of mind.

Pro Tip: most people don’t negotiate. Companies are more willing than you think!

However, the cost of the warranty is usually based on a percentage of the sale value, so the cost of the appliance insurance also increases.

“In 2012 The Office of Fair Trading estimated that the UK market was worth about £1bn a year. Of this, 75% of people did not compare prices before buying an extended warranty.”

Four reasons why Extended Warranties are NOT worth it

Things have changed as manufacturing processes have improved on and technology has moved on.

  1. Appliances are getting cheaper
  2. Reliability is generally improving
  3. Replacing could cost less than repairing
  4. New products are always getting better and more efficient

In 2011, Which? published research that concluded extended warranties were ‘poor value’ and ‘a waste of money’.

The same research showed that most appliances such as washing machines are unlikely to need repair inside five years.

“extended warranties ‘bring relatively benefit’.” 

 BBC (2013)

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 often 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 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 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.

What if my insurance provider doesn’t pay up?

Money Saving Expert has a great affiliate site, Resolver, that includes guides and templates on how to complain if you’re battling your insurance provider.

Extended Warranties – Tools and Resources

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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Extended Warranties – are they really worth it?