/ 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.

Member

Haha okay. I only said this because he asked if I wanted the extended warranty and then demanded to know why not in quite an accusatory way.

I can’t tell you what I said word for word but the points I made were as follows. The washing machine should last for a reasonable amount of time which is longer than the basic warranty period of 12 months. The extended warranty therefore covers a period when the machine is already protected by the sale of goods act and the machine is also covered by section 75 because I paid by credit card. I don’t need an extended warranty to have recourse if the washing machine turns out to be defective. The machine will continue to be their responsibility whether I have an extended warranty or not – they’re not absolved of responsibility after 12 months. Accidental damage or mishap is already covered by my household insurance, so the extended warranty doesn’t actually offer anything I’m not already legally protected for. And the extended warranty was sufficiently expensive that I could practically buy a whole new washing machine for the price.

Member

Now that’s a savvy shopper! Good work. Bet he was quaking in his boots.

Member

All totally valid.

And if he ‘demanded’ anything, he got what he deserved. Tonality matters.

I am currently getting unsolicited calls over and over (ring, silence, static, pause, being asked my name, mispronounced, by someone I am pretty sure is not Charlotte or Tarquin) from some UK ‘research’ whose script starts ‘We need to know what TV you have…’

After the first few, where I have explained asking if I’d mind sharing is a better way to kick off, and anyway it’s none of their business, I do confess to getting testy.

Member
Sheri says:
16 December 2011

I rarely buy extended warranties and as I have never regretted not doing so, I must have saved myself hundreds of pounds over the years! However, I did buy a 5 -year extended warranty on a 3-piece suite from Harveys once because it was one where if you didn’t make a claim, you could get the full amount refunded. So I set up a Hotmail or Windows calender reminder, to avoid missing the 30-day period for applying for the refund – and sure enough, I got my £150 back!

I also took out a 3-year extended warranty on two HP desktop computers, which I purchased direct from HP (a) because my previous Acer T180 desktop had completely failed about a week after its 1-year warranty had expired and (b) because I thought that it was well worth £87 to have 3-years’ peace of mind on my new desktops. And I was glad I did because the hard drive failed on both of them and the graphics card failed on one of them and all were replaced under the extended warranties.

Most recently, I bought a 5-year extended warranty on a washing machine at Comet (a) because they gave me £20 discount off the price of the washing machine if I did and (b) because working out at less than 50p per week, I again figured it was worth it for the peace of mind.

Member

I think he wanted to kill me. I did say I realised it was his job to offer the warranty… I was polite, but to the point!

Member

Many years ago Which? was campaigning against the hard sell of expensive extended warranties. Shortly after reading the latest article I went to buy a mini-hifi system to use in the kitchen. It must have been around 1990, when CDs were becoming very popular.

Comet tried several times to sell me a very expensive warranty, so I explained that extended warranties were poor value for money. Eventually I shouted at the sales assistant and suggested that it would be a good idea to read the current issue of Which? I have never raised my voice in public before or since, though I’ve done a fair amount of personal tuition about consumer rights to sales assistants and their managers.

I am pleased to report that my system is still working well all these years later. I assume that sales assistants are on commission to sell extended warranties.

Member
halfpennyacre says:
16 December 2011

I had a new kitchen built but purchased all the Neff appliances my self. This would have cost me £323 in per year to extend the warranties. It is now 4 years later and the only thing I have had to replace was a £2.50 light bulb in the cooker hood above the gas hob.
Warranties-a complete waste of time.

Member
simon says:
26 January 2012

We purchased a £650 TV from Curry’s recently and when it came to pay the salesperson did a hard sell on the extended warranty. I pointed out that if it failed in the first year I’d be back demanding repair or replacement at their cost, and after that I’d take my chance. My experience of many years has shown me that most things either fail in the first few weeks or well after the extended warranty period. He then suggested I take out the extended warranty on a monthly basis and cancel after the first few months (!?!). When I asked what the logic in that was he stated “we can be very slow for warranty repairs for customers who don’t take out our extended warranty – we are much quicker if they do”. On the basis of this “threat” I cancelled the purchase and went to John Lewis, who offered the same TV at the same price but with a free 5 year warranty.

So beware – if you don’t take out those warranties they may send the boys round!!

Member

Extended warranties included in the price have got to be the way forward because it is so difficult for the consumer to make use of the protection afforded by the Sale of Goods Act. Thanks for posting this, Simon.

Member
scotram says:
17 December 2012

I always buy 3yr extendad warranties on goods and return them for a new model every year whether anything is wrong or not. i just walk into currys for example, tell them its not working and they tall me to choose a new model to the same value without even checking if the returned model works or not.I love these warranties!

Member

Top marks for environmental irresponsibility. I hope you realise that others are paying to support your inconsiderate and probably illegal actions.

Member
scotram says:
18 December 2012

Aww thanks mate.

Member
L. D. says:
12 March 2014

I prefer to get a warranty to be perfectly honest. Twice I had a televison (one was a leaving present a few years back, the other was a 19inch television I purchased in 2012) and both times they developed a fault after the manufacturers 12 month warranty expired. I certainly don’t want to go through that nightmare again.

Member

My wife got me a camera from John Lewis with an extended warranty. Within a couple of years the lens jammed open and we took it back to a John Lewis store. Two months later they came back to us and said that we had to send it somewhere else, but before they would let us collect it to send it wherever it was now supposed to go, we had to supply the address used for the credit card at the time we made the purchase! We move frequently and don’t know which address was used.

It is now over three months since I had use of my camera and I have needed to buy a new one as I do a lot of photography. The issue is still unresolved but we do have the camera back as we embark on the next phase of trying to get it repaired or replaced.

If my experience of John Lewis’s extended warranty is anything to go by, it is even worse than a waste of money.