Are Extended Warranties Worth it?

Statutory Cover

It is important to note that you are already covered under the Consumer Rights Act of 2015. This act stipulates that goods must be satisfactory and last a reasonable amount of time. Of course it can be difficult to prove what 'reasonable' means but in some cases this could mean that items should last well beyond the guarantee period.

Guarantees

Manufacturers usually offer a 12 month guarantee in most cases anyway which would question the need for a warranty. Also check what  a retailer will add on as some will also cover you for years after the manufacturers guarantee has run out.

Credit Card Protection

Under section 75 of the Consumer Credit Act it says that the credit card company has to cover you if goods are faulty. It can therefore be useful to buy big purchases on your credit card.

Home Contents Insurance

It is worth checking out the details of your home insurance to see what you are already covered for. It is unlikely they will cover you for something like a washing machine breaking down but you may be covered for accidental damage. The other issue with home insurance is that you may have to pay an excess and you may not want to lose your no claims bonus.

Extended Warranties

If you do decide however that you are better off buying an extended warranty then there are a number of things to look out for. Do shop around, a specialist insurer may be cheaper than a retailer. Also do check all the details. For example some extended warranties say that the repairs can take up to 6 weeks, being without a washing machine for 6 weeks if you have a young family could be impossible. Also some warranties will say that they cover repairs but not parts and labour, so read everything, the devil will be in the details.

Another thing to look out for in an extended warranty is whether you can get hold of a new item if your old items cannot be repaired. Try not to pay monthly as these types of warranties often work out really expensive. Finally, check that you are not signing up to a service agreement. .These are not regulated by the Financial Conduct Authority, so if the company goes under you have no legal protection.

Retailers do sometimes get criticised for pressurising people into taking out expensive warranties that are unnecessary. Do remember though that you have 45 days to cancel the warranty if you change your mind. This is under the Supply of Extended Warranties on Domestic Electrical Goods Order 2005. So don't panic if you change your mind, the law is on your side.