Extended warranties are often sold alongside TVs, washing machines and other electrical items, but critics argue they are overpriced and often not needed.
Shops love extended warranties, which is hardly surprising really when the market is worth millions of pounds, but consumers may not always get a good deal. Many extended warranties aren’t needed and consumers can often get a better deal by buying a warranty separately (not from the retailer who’s selling you the goods).
What is an extended warranty?
They generally offer to extend the guarantee that the manufacturer provides, and mean that goods that are damaged or faulty will be replaced or repaired. Not all extended warranties work in the same way but there are typically two main types of warranties:
- Insurance based extended warranties
If you have an insurance based extended warranty you have the right to complain about it to the Financial Ombudsman Service (which is a free to use and independent complaints service). If it’s insurance-backed, the policy document will have the words ‘underwritten by’ somewhere fairly prominent.
- Service plan based extended warranties
These are often offered with computers where you’re provided with ongoing ‘technical support’ and not just the repair or replacement of the goods you buy.
Do you need an extended warranty?
Many electrical goods are very reliable which means that buying an extended warranty may not be worth it. In some cases the cost of the warranty can be at least 50% of the cost of the item.
The manufacturer will usually offer a guarantee anyway (which may last one or two years), so it’s always worth understanding how the manufacturers guarantee works in the first instance before thinking carefully about forking out for additional cover.
Remember too that an extended warranty may not cover everything. Many people who buy them do so because they think they are getting ‘peace of mind’, but warranties can often exclude damage to particular parts or water damage, for example – so it’s vital to make sure you know what is, and isn’t covered.
Extended warranty options
There may be times when an extended warranty is worth it, but you absolutely shouldn’t buy it because you feel pressured into doing so. You have the right to cancel a warranty you’ve taken out with the retailer as long as you do so within 45 days if the warranty lasts for more than 12 months.
If you cancel after 45 days (or you’ve made a claim) you won’t get all your money back.
If the warranty lasts for 12 months or less then unfortunately you can’t cancel it – another good reason not to be pressured into taking one.
You can also look into buying a warranty from:
The manufacturer. These are often cheaper than buying from the retailer and may offer identical or very similar benefits. Once you’ve bought your electrical appliance, you’ll be sent a letter (with the guarantee) and given the option to extend the warranty.
A warranty provider. There are several of these around and cover is often cheaper than buying it from the retailer you’re buying the item from. You don’t have to take out a warranty while your appliance is relatively new – some may let you insure appliances even if they are a couple of years old. To give you a sense of how competitive a warranty is, you can compare the cost of extended warranties here.
Have you ever bought an extended warranty and did you ever claim on it? If so, we’d be interested in hearing how easy or difficult you found it. You can join the conversation on the Community forum or leave a comment below.