Push back on the warranty pushers
In the world of extended warranties, I can see why some salespeople might exaggerate the benefits of buying one, since it’s often their job to persuade you to purchase something that is, in fact, poor value.
Over the years, Which? has consistently highlighted reasons why extended warranties are usually bad value.
For one thing, our surveys show that many products are so reliable that there’s a very slim chance you’ll ever need the warranty; for another, the price can be well on the way to the cost of a whole new product.
Extended warranties offer poor value
A Currys premium five-year warranty on a 32-inch Panasonic TV costs £139. That’s half as much as buying the same model new.
Yet our latest investigation shows that only 2% of Panasonic TVs were repaired in the first five years – making it highly unlikely you’ll need to use the warranty.
Last year, we highlighted a £170 warranty for a washing machine that cost £260. In the past, we’ve shown how the cost of repairs was far less than the cost of the warranty. We’ve even found cases where the warranty costs about the same as the product itself – which is totally ridiculous.
Some of you tell us that you like warranties for the peace of mind and the convenience of getting repairs sorted out quickly. However, you won’t get repairs if the warranty doesn’t cover the cause…
Some people will say anything to get a sale…
When we tested Currys/PC World recently, one member of staff told our researcher that its ‘Whatever Happens’ warranty covers everything. It doesn’t – anything deemed to be due to neglect, misuse or weather damage is ruled out.
It’s 10 years since the Competition Commission investigated the extended warranty industry, including hard-sell tactics, and concluded that the market wasn’t acting in consumers’ interests. That wasn’t the first investigation, either. An optimistic review in the mid-90s recommended self-regulation, which failed.
You may be surprised to hear that not all warranties are classed as insurance, so in some cases you don’t have the same rights as you would with insurance to complain or get compensation if things go wrong. We think it’s high time warranties were treated the same way, and we’re asking the Financial Conduct Authority to take action on this issue.
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