/ Money, Shopping

Extended warranties are basically a waste of money

Many shops will still try to sell you an extended warranty when you buy a kitchen appliance or TV, but they’re not always your best or most cost-effective option. So, are extended warranties worth buying?

Extended warranties, a bit like Baywatch and Ace of Base, were big in the 90s. Back then, there was a good chance you’d need to get your appliance repaired. And most of the time people preferred to pay the extra money up front, rather than having to find the cash to fix their appliance when it went up in smoke.

Shop staff were also well trained in the art of convincing you that you had to take out an extended warranty to protect your new telly or fridge. But is that still the case today?

Our warranty warning

At various times during the last decade, extended warranties have come to the attention of the Office of Fair Trading (OFT) and it acted to prevent so-called ‘pressure selling’ in 2005. However, the OFT has been forced to look at them again as the market for warranties still rakes in millions of pounds for retailers.

So we wanted to see whether extended warranties could actually be good value for money. Our latest investigation found that a five-year extended warranty could set you back up to 65% of the price of a washing machine. And when there’s only a 12% chance of appliances needing repair in the first five years, it hardly seems worth it.

Similarly, the price of a five-year extended warranty on a £799 Sony Bravia KDL-40EX723 television is £269 at Currys, with Sony TVs having just a 3% likelihood of needing repair within five years of you buying the new set.

Why would you cough up so much cash for something that’s unlikely to happen? In reply to our previous extended warranties Conversation, Bechet told us that:

‘The few extended warranties I have bought were a complete waste of money and I have learned my lesson. If it doesn’t go wrong within the first year, it probably won’t fail within five.’

Peace of mind for some

Then again, some Which? members do like the reassurance of having an extended warranty to supplement the manufacturer’s warranty.

In our survey of 1,401 members, most who had taken out an extended warranty in the past five years said they did so for the convenience of having a repair sorted out quickly and easily, or so they could avoid the unexpected cost of repair. Commenter Ali agrees with them:

‘I think extended warranties are SOMETIMES worth the money. For example, I have a large family and a washing machine is vital to me. Most washing machines last me about two years at most – I do not have the money to fork out £300+ on a washing machine every time it goes wrong.’

However, wouldn’t you be better off putting the money aside in case you do need to pay for a repair, rather than having to fork out for an extended warranty when you buy an appliance? Then, if it doesn’t break down within five years, you’ve made a good start towards funding a new model when it does.

So, do you agree that extended warranties are an extra expense you should avoid? Or are they good for peace of mind should your appliance give up the ghost?

Are extended warranties worth the money?

No - I don't think you need them (93%, 267 Votes)

Yes - I like the peace of mind (7%, 19 Votes)

Total Voters: 286

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Comments
Member

How about a campaign to push manufacturers to include extended warranties in the price of goods?

A lot of modern appliances are not designed to be repaired easily. That means that when they break down, it is uneconomical to repair them. At best they are recycled. What a pointless waste of materials and our money.

Including warranties in the cost price would encourage manufacturers to improve quality, so that they do not have to meet the cost of repairing their unreliable goods.

Member

The poll is an eye-opener.

I am in the minority, as I do tend to get them, at least for big ticket items like our TV (5 years via John Lewis) or PCs, especially those with a bunch of parts that may go boom.

Things like our gas hob, no, especially when a £150 unit had a £30 tag on it.

You pays yer money..

The main appeal is budgeted predictability. I know I will not need a £700 influx for a while yet if this Mac Mini goes b…….

Member

I would agree with JunkkMale as an example;

I purchased a well known laptop makers laptop and within a month the DVD writer wouldn’t write double sided DVD’s.

Replaced the DVD then the replacement failed which was replaced.

Shortly after that it went again and the motherboard had to be replaced.

The following year the fans and the VD went again then earlier this year the DVD and motherboard failed along with the battery and the charger.

All in all I had my monies worth from the warranty as the price of the machine + warranty was far less than the cost of repairs.

I also buy warranty / servicing for washing machines and dishwashers – don’t want to get my hands all dried p and pink do I?

Member

Sounds very much like a Toshiba laptop I had at work. Fortunately the supplier provided an extended warranty. Eventually I got fed-up and gave it to a colleague, and used my Mac laptop instead.

Member

When we bought our washing machine, the guy in Comet asked if I wanted to buy an extended warranty. When I said no, he asked why.

I don’t think he’ll ever ask again after the speech I gave him…

Member

Do share your speech with us (minus expletives if there were any!)

Member
W E Chatwin says:
16 December 2011

Well done you, if we do not want an extended warranty that’s it, we should never be asked to give a reason.

Member

One of the few aspects of humour to the recent riots was the notion of Comet staff running after looters trying to get them to sign up for an EW.