Extended Warranties – The Pitfalls

Whenever you purchase expensive items such as household white goods, laptops or TV’s, the store will often attempt to sell you an extended warranty to cover faults that  arise after the standard manufacturer guarantee has run out. However, these extended warranties are often sold by pushy staff trying to hit targets and make commission rather than assisting the customer. This results in customers lumbered with expensive policies that often they then difficult to cancel or to claim on. In many cases their claims are rejected as the salesman has failed to notify them of the exclusions and limitations of the policy. In addition, some of these policies are so expensive that it would be cheaper to simply pay for repairs yourself in the event of a fault!

extended warranties

Most extended warranties are sold for domestic electrical goods, so if a salesperson is trying to sell you a policy, remember that there are laws to protect you if you are pressured into buying a policy without having the chance to consider it properly. The Supply of Extended Warranties on Domestic Electrical Goods Order 2005 is enforced by the Office of Fair Trading. It states that electrical retailers must clearly advertise the price of a warranty next to the goods in store. They must also inform you that you can buy the warranty elsewhere and that the item you are buying may already be covered by your household contents insurance policy.

It is also worth noting that you may not even need an extended warranty as in certain circumstances you could be legally entitled to get things repaired for free or replaced even if the manufacturer’s guarantee has run out. The Sales of Goods Act states that goods should be of “satisfactory quality” and last a “reasonable” amount of time. So if an expensive item breaks down after 2 years, the retailer could be legally responsible to repair or replace that item for free.

Not all extended warranties are a bad idea of course, some are competitive and offer a decent level of cover, but make sure you check the details before you buy, otherwise you could be paying for something you can’t actually use. Typically extended warranties cover repair or replacement for faults and sometimes cover for accidental damage. If you intend to use the item a lot, ensure the warranty covers wear and tear or accidental damage. Also check whether you still have to pay the cost of labour, call-out charges, spare parts, postage for sending goods back and other damage caused by the fault.