/ Money, Shopping

Is this the end for rip-off extended warranties?

A man watching a blank or static screen of his television.

Which? has long questioned the value of extended warranties purchased alongside TVs, washing machines and fridge freezers. Now the Office of Fair Trading (OFT) wants to see them improved – will it work?

The OFT study stated pointedly that: ‘our report highlights competition concerns in the £1 billion per year market that could mean consumers are not getting the best value for money.’

Dixons, Comet and Argos have offered legal undertakings to improve the way that the extended warranty market works. There will now be a period of consultation on the proposals.

The proposed improvements include a comparison website in order to make it easier to compare prices, more accessible in-store information and an independent mystery shop to ensure that sales staff provide accurate information.

Overpriced and over here

When I started a Conversation on this topic back in December we’d just investigated the market. Our research highlighted how expensive extended warranties could be, with a low likelihood of the appliance actually needing repair within the warranty term.

Many of you voted in our poll, with an overwhelming 93% saying that you don’t think extended warranties are necessary. One of our commenters, Sheri, said she rarely buys extended warranties:

‘As I have never regretted not doing so, I must have saved myself hundreds of pounds over the years!’

And, as commenter Anne pointed out, there is also the fact that you have cover under the Sale of Goods Act if the fault occurs within a reasonable period of time. If you’ve paid by credit card you’ll have the protection of section 75 of the Consumer Credit Act.

Good riddance?

We feel that extended warranties are something of an anachronism. Back in the day when white goods and televisions cost relatively more and were more likely to break down, they probably had some value, but less so now.

So where do you stand? Are you pleased that the regulator has acted to ensure that these products will be sold transparently and realistically priced in the future? Do you think that the OFT should have gone further and banned the sale of extended warranties?

Or do extended warranties serve a purpose and provide peace of mind when you buy an expensive electrical appliance?

Comments
Profile photo of william
Member

20/30 years ago you could but white goods and the chances are it’s still working strong today. These days the quality and components are so cheap and they then use the cheapest people to build them so the chances are the warranty will be needed. Just a shame that through cheap practices people are very weary of them, and rightly so. Also a shame I can’t afford to buy white goods let alone any warranty

Profile photo of jonas_1954
Member

Extended Warranty providers should have to clearly state what their warranty provides over and above the protection given by existing laws. Customers could then make informed decisions about their value.

I’ve never purchased an extended warranty and have never regretted my decision.

Profile photo of wavechange
Member

I think extended warranties are essential, but they should be included in the price of all domestic appliances.

In theory we have the protection afforded by the Sale of Goods Act, but in practice it is difficult to get retailers to face up to their responsibilities.

Obviously the manufacturer needs protection against unfair warranty claims.

The motor industry, once the target of a lot of criticism, is gradually offering longer warranties and this is an important factor in buying a car. We should be pushing for washing machines and TVs with a 10 year parts & labour warranty, and I hope that Which? will help promote these products provided that they meet other criteria used to select ‘Best buys’.

Member
L2 says:
13 May 2012

There are often extended warranties for certain parts outside of the original car manufacturers warranty period, especially when there is a full service history.

Profile photo of ArgonautoftheSeas
Member

Depends on nature of equipment or appliance and the
amount paid therefor. Personally think a fridge freezer for example
need not be the subject of an extended warranty but then I generally
buy the more reputable brands as to consumer goods, not the budget
names where there is, I suppose, a greater likelihood of a breakdown.

Fairly often, any (rare) breakdown is a very minor problem that with a bit
of knowledge can be rectified quite easily w/out spending much at all
in getting relevant spare part(s).

In the case of a quality British-made amplifier of old that I had, all that needs
doing was replacement of the amplifier fuse costing just pennies.

Profile photo of wavechange
Member

I agree that these factors are important, but I was just trying to propose that manufacturers should have a greater responsibility to ensure that we get a reasonable amount of use from their products. My experience is that reputable manufacturers often produce goods with that are unreliable, so buying by brand is not a guarantee of quality.

If you can replace a blown fuse or fix a broken connection that can save time and money and avoid adding to the mountain of unnecessary waste. If you can do more you can sometimes hold onto goods that others have thrown ten or twenty years ago. I’m very glad I learned to wield a soldering iron when I was a teenager.

Profile photo of ArgonautoftheSeas
Member

Correction:… amplifier I have, not had as still in daily use, to power the
computer as to audio for one.

Have noticed people throwing away perfectly functioning electrical and
electronic goods, come to think of it, other usable household stuff as
well, all in fairly/good nick.

Member
Barbara Ford says:
10 February 2012

It is worth noting that extended warranties can be miss leading as only part of any appliances are covered by them. Before taking out read very carefully what is covered; check the depreciation of equipment over warrranty period. I was caught out by AEG’s extended 5 year one over the corrosion of the back plate liner of the main oven; it isn’t covered. AEG had discontinued certain parts for an oven less than 4 years old meaning I have had to buy a new double oven. Even Which don’t seem to expect ovens to last more than 5 years! I feel there should be a strong campaign to improve lifetime of modern ovens for ecological reasons; they are definitely short lived!

Member
Alan Parsley says:
10 February 2012

When asked if you want extended warranty cover, ask the assistant what is the likelihood that the item will breakdown in the period of cover being offered.

Member
Brisy says:
10 February 2012

There should be no need for extended warranties technology has moved on.Goods especialy electrical goods should carry at least 3 years warranty,as per such stores as Aldi and Medion brands.Extended warranties are just another way of picking your pockets.Its the old old story”lets feel for another pocket to dip our hands in,”.If they can’t make goods to last at least 3 years they SHOULD NOT BE ALLOWED TO SELL THEM!

Member
sosin says:
10 February 2012

I never take extended warranty

Member
Helen says:
11 February 2012

The only item I have an extended warranty on is my laptop as it is my work lifeline. The warranty includes a help package with defined call out / replacement times.

For other appliances they are unnecessary and what really bugs me is the way they try to force you into buying them with dreadful scare stories, to be honest if the product is that unreliable then I’d rather not have the product at all then I wouldn’t need the warranty. Not only that but they can’t tell you in the shop what it actually covers, you don’t get to know that until the insurer issuing the warranty sends you the policy documentation.

Member
jinxster says:
23 February 2012

Extended warrenties mainly benefit those companies / shops that retail goods to the consumer. It seems its not enough to make a profit from the items that are sold to consumer, they now conjur up additional add-ons to a purchase to increase profit margins. Its a pity the public dont realise that should a product develope faults soon after being purchased, then there’s a number of remedies available under the Sale of Goods act. Of course, much depends on the time thats elapsed since the product was first purchased, but certainly any item thats recently new will be covered by law. Expensive items that cost two thousand poundss or more like three piece suites should be dealt with via the small claims courts (Especially where there’s a policy of none co-operation by a supplier). I suggest its the public that need to know their rights and stop paying out needless amounts of money to greedy retailers. If a product is not fit for its intended purpose then it shouldnt be on sale in the shops. Retailers generally know what products are reliable and what’s not, by the number of product return they get

Personally I think people should flately refuse adding expensive warrenties to the cost of newly purchased goods. Just like Bankings loan insurance cover, its something thats been completely over sold in recent years. If customers opted to put money into their own emergency account to cover things like unexspected breakdowns, they would be better offf in the long run They would then be in the position to chose who could and couldn’t repair the product, thereby getting a better deal than with the retailers own crew attempting a bodge up on it (Beware in house repairs I say).

Member
Marcus D says:
13 May 2012

I used to work many years ago at Dixons. What was then called “SuperCover” was all they really wanted to sell. The VCRs, TVs, Camcorders, etc.. were just things that were used to sell SuperCover with. The staff were constantly pressured by managment into selling it, those that did not sell much were seriously intimidated and ridiculed. Staff were so afraid of not selling enough that they commonly used underhanded tactics and serious pressure selling just to get their percentages up. A common one was to simply add cover to a purchase without even informing the customer if they were paying with a credit card or in-store credit. This kind of disgraceful practice is why I left the company. The sale of these things should be banned full stop. They are nothing but a legal scam.

Member
L2 says:
13 May 2012

When are computer manufacturers going to offer a decent warranty? All they give is a one year guarantee which is not good enough, in reality all this does is cover themselves as they are legally required to give a one year guarantee. As for the Sale of Goods Act, I can only imagine the difficulty of using that, the manufacturers would do everything they could to refuse to accept responsibility, and instead try to blame the customer.

I have noticed that Toshiba offer a 2 year warranty on most of their laptops, so why do no other manufacturers offer this?

Member
HarryMonmouth says:
11 June 2012

I don’t think things are built more reliably now at all. Manufacturers certainly know how to build things more reliably but when buying goods 30 years ago they were expected to last. If you buy goods nowadays then they are expected to be obsolete within a decade and you will be wanting something newer. Why build goods to last for long periods of time at extra cost when most people won’t even want to keep them that long. Mobile phones are the worst for this. People want to get a new one every year or two. It is not worth spending the extra money to make them last longer than this when only a few of us are really bothered.

Profile photo of wavechange
Member

Water damage is a common problem with mobile phones, so do not assume that hey will last even a year or two. On the basis that it does occasionally rain in the UK, perhaps manufacturers should concentrate their efforts on designing phones that are fit for their purpose.

Member
Chris Heffer says:
22 August 2013

I have started an independent & transparent comparison website for extended warranties. I would love your feedback if you could let me know how useful it is for you if you do want to buy an extended warranty.

The URL is http://www.extendedwarrantycomparison.co.uk

Member
GrahamK says:
16 May 2014

Bosch dishwasher gave up the ghost after eleven years of trouble-free use. Buying a replacement, both Curry’s/PC World and Bosch Registration tried to sell me extended warranty on the new machine. I refused based on the excellent performance of the old machine. “Ah, but there are more things to go wrong with the modern machine” they told me. “Are you suggesting that the reliability of Bosch machines has been compromised by introducing new features?” Needless to say, I didn’t get a proper answer!

Member
Clare says:
12 June 2015

We have an AEG fridge freezer which had to be repaired twice during its two year warranty period. It has now gone wrong again but the warranty has expired. I am reluctant to spend lots of money getting it fixed if it’s going to wrong again and we are therefore looking to buy a new one. In view of our past experience are definitely considering extended warranty next time.

We also have a Bosch washing machine which went wrong just before warranty expired (luckily).

These are the first occasions in my life that I’ve ever had appliances fail so quickly. It seems they are not built to last anymore.

Member
Pat fryd says:
18 March 2016

I last week bought a £599 AEG washer-dryer from Curry’s…..salesperson said my contract was with AEG which would be delivering it…not with retailer, Curry’s…..i get 2 years standard guarantee, excluding accident…could have warranty for 3 years including accidental damage for the full 3 years starting now…for £4-51 a month for 20 months, i.e.£90… been thinking it through…Which assistant v.helpful…and finallly directed me to this site…not sure what kind of accident wouldn’t be covered by home insurance…but maybe that would increase if I added the appliance…I think i’ll take the warranty tomorrow am unless anyone convinces me otherwise?

Profile photo of malcolm r
Member

Having paid nearly £600 for your washer/drier I would think it reasonable to last without fault for at least 5 years, and probably longer. The Consumer Rights Act requires products to be reasonably durable (with consideration to the price paid) but this provision seems to be little used, and certainly not promoted by Which? A great shame since it should be one of the cornerstones for consumers to get more reliable products and redress if they do not meet reasonable expectations.

Which? have said in the past most paid-for warranties are not worth the money; you are better saving the money towards a repair you may, or may not, have to pay for. A complication now is how repairable your appliance might be. Can the bearings be replaced on their own for example, or is the whole drum
assembly to be replaced? The cost of a repair may not prove worthwhile. Something else Which? could tell us about when reviewing domestic appliances.