Even the savviest shoppers aren’t entirely immune to the lure of extended warranties. What if my new purchase dies after 13 months? It’s a valid point; the last thing you want is to be left up breakdown creek without a paddle. However, in-store warranties are often massively overpriced or, worse still, utterly worthless.
What does a warrantee cover?
A warranty, or ‘extended guarantee’, is essentially an insurance policy for an appliance, typically lasting 1to 5 years after purchase, and covering the cost of repairs and replacement.
Warranties generally cover mechanical and electrical failure, but not accidental damage. You should be entitled to a free repair (including parts and labour), or, if repair isn’t an option, a replacement. Depending on the fine print, you might have to make a contribution towards replacement.
It’s worth noting that stand-alone warranties are superseded by manufacturer’s guarantees, so it’s pointless having both.
What different types of cover are there?
Many appliances come with a one-year manufacturer warranty. Remember to fill in the little card or register on the company’s website, or you risk invalidating the warranty. If you’re considering extending your cover, check the packaging to see if the manufacturer offers the service directly, as it’s often the cheapest option.
Essentially, you buy an insurance policy directly from the manufacturer. These tend to be cheaper than the retail equivalent, sometimes as much as half price, and the policy is tailored directly to the product.
As the name suggests, these warranties cover a number of appliances in one, and are better value than individual policies. However, be wary of maximum claim caps.
What are my rights without a warranty?
Goods should be of satisfactory quality, fit to do the job intended and last a reasonable length of time, as per the Sale of Goods Act 1979. If you take faulty goods back within six months, the onus is on the retailer to prove they weren’t faulty when you bought them.
The Sale of Goods Act is intentionally vague when it says ‘reasonable length of time’; consumers and retailers alike would surely concur that a calculator from a pound shop, in all likelihood, won’t last as long as a £1,500 LCD TV. Similarly, if reasonable wear and tear kills the product, you probably won’t have any recourse.
If a shop disputes the ‘reasonable length of time’ – which, let’s face it, they almost certainly will – your only option is to take them to court.
If you buy something at over £100 with a credit card, you’re automatically covered by Section 75; if the goods are faulty, the card company is equally liable with the store. In a neat little clause, the card company is still liable if the store goes into administration.
Instead of paying for additional cover, pop the equivalent sum in a savings account each month. In the unfortunate event that the appliance breaks, at least you’ll have some money to contribute towards repair or replacement. And if the appliance doesn’t take early retirement, you’ll have built up a nice little wad of cash.
Home insurance policies often cover electrical items and white goods for theft and damage, but breakdown is less likely.
How can I get cheap cover?
Free extended warranties with credit cards
Some cards – such as Nationwide’s credit card, Ulster Gold’s Mastercard and Egg Money World Mastercard – extend the manufacturer’s warranty for an additional 12 months, free. The level of cover varies (for example, Nationwide won’t touch computers or mobiles), but definitely worth a gander.
John Lewis offers a five-year guarantee on all TVs, and two-to-three years on other electrical goods. True, the store is often quite expensive, but they offer a price-match guarantee on high-street competitors.
Those annoying sales guys who try to push extended warranties will invariably have targets to meet. As such, you might find there’s a little room for negotiation on the price. Agree to take the warranty in exchange for a cheeky discount, then exercise your rights under The Supply of Extended Warranties on Domestic Electrical Goods Order 2005; you can change your mind about a warranty within 45 days and receive a refund.
With plans from just £10, Warranty Direct is one of the biggest –and often cheapest – providers of standalone policies. Mechanical, electrical and electronic breakdown are all covered; accidental damage is not. There’s also a maximum annual cap of £2,000, but they’re still an attractive option if you crave extra peace of mind.
What if my policy provider doesn’t pay up?
Guarantees are legally binding, so if the store or provider won’t play ball, you have legal recourse. Here’s what to do:
1. Complain to the provider in writing. Include all previous correspondence and quote the relevant clause of the warranty.
2. Complain to the Financial Ombudsman. Specialist providers of warranties are governed by the FSA, which means you have the right to be ‘treated fairly’. If the provider is being unfair, complain to the Financial Ombudsman. Be aware, though, that some in-store policies are technically ‘service agreements’, and not FSA-governed.
3. Small claims; depending on the amount of your claim, there’s a fee of £25- £100, however this is refunded where claims are successful. For more information about the small claims courts, check out what Bitterwallet's consumer heavyweight Len Dastard has to say.