/ Money, Shopping

Have we really got time for extended warranties?

Keyboard with plasters on it

Extended warranties are under the spotlight again – this time the OFT is investigating their value for money. But do we really need a study to find out what we already know – that warranties are largely not worth buying?

Earlier this month, the Office of Fair Trading (OFT) announced it was going to launch a market study into the warranties sold with domestic appliances, such as computers, TVs and washing machines.

It wanted to find out whether its suspicions – that basically, they’re poor value for money – were true.

Look to Europe for answers

Well, it doesn’t need to do a market study to do that – all it needs to do is look to Europe. Over here, domestic appliances tend to come with a one-year manufacturers’ guarantee. Whereas in Germany, most domestic appliances come with a five-year manufacturers’ guarantee.

This simple fact explains why the extended warranty market in this country is worth well over £750 million.

To make matters worse, according to EU Directive 1999/44/EU, a minimum two-year guarantee should apply to the sale of all consumer goods everywhere in the EU.

Might the OFT’s time be better spent getting a government department to force product manufacturers to comply with EU law? There’s a little saying that I like to live by, which goes something along the lines of: doing the same thing over and over again and expecting a different result is madness.

What about the Sales of Goods Act?

It was only in 2008 that an OFT evaluation showed that ‘the Supply of Extended Warranties on Domestic Electrical Goods Order 2005, introduced to improve competition, was by that time only addressing around £19m per year of an estimated annual consumer detriment of £366m’.

How many more market studies and evaluations does it need to carry out before it changes tact, and does something effective? Let’s not forget that under the Sale of Goods Act you have a legal right to a repair or replacement if a product you’ve bought breaks down.

The Act states that goods must be of a ‘satisfactory quality’ and last a ‘reasonable’ amount of time. So, here at Which? we believe that, in most cases, extended warranties aren’t worth buying. Do you agree that they’re poor value for money, or do you feel more secure if you have bought one?

Comments
Profile photo of wavechange
Member

Overall, I have saved a fortune by not taking out extended warranties, though I can understand why many people use them for larger purchases. I’m sure that campaigns by Which? and others have helped decrease the outrageous prices of extended warranties that were offered in the 1980s.

I am aware of the Sale of Goods Act, but have not had much success in trying to get retailers to face up to their responsibilities. Major electrical retailers don’t want to know, and I’ve been told several times that I should have taken out an extended warranty.

My top tip is to go back to a shop when a different manager is on duty. Some are more obliging than others.

Profile photo of richard
Member

So far I have never used extended warranties as the cost outweighed the possibilities of the need of repair – most equipment in my experience is likely to go wrong within the normal warranties. However I have never had any difficulty whatever in getting an item replaced if it went wrong in say a few weeks of purchase – or repaired if it was longer – always of course providing one has the receipt.

But the number of items going wrong within warranty has been tiny – just two a fridge and a washing machine repaired in warranty period – and just one a faulty DVD player replaced within one month – in thirty plus years.

Profile photo of donald
Member

An utter waste of money. Nuff said. If they were worth having they would be included in the overall price without being a bolt on. We have a 10 year old washing machine, a 15 year old fridge/freezer, a 15 year old dishwasher, all going great guns at the moment. I would rather take my (rather good) chances than pay out £££ for nothing.

Member
Sirgeoffrey says:
3 May 2011

If I have to use the sale of goods act if a tv breaks down within the five or six year period what are the hassles that I may have to go through. Richer Sounds in their 5 year warranty warn:After 6 months it is up to you prove that the product was faulty when supplied:this may involve you taking legal proceedings :

Is this true?

If so why does Which not warn about this and give advice?

If not What is Which going to do about it?

Profile photo of Patrick Steen
Member

Hello Sirgeoffrey, I’ve had a chat with our legal team to respond to your question. If goods are faulty or unfit for their purpose there is a presumption in the first 6 months that they were like that when they were sold. This means the seller has to show that the problem has been caused since the consumer has had the goods e.g. by neglect, misuse, accidental damage etc.

After 6 months the burden switches and it is for the consumer to show the goods weren’t as they should have been when they got them. The 6 month burden of proof on the seller is relatively new, being introduced in 2003, before that the onus was on the consumer from the outset. So, in a way, we feel that its introduction was good news for consumers

However, you wouldn’t necessarily have to go to court to prove the item was faulty. You could, for example, get an expert report that concludes that the item was faulty when the seller supplied it – you may though need to go to court if the seller refuses to accept the item was faulty, which is what Richer Sounds probably meant.

In terms of the hassles you may have to go through – in practice it all depends on the seller. Some will accept that goods are faulty without question, others may want to inspect the goods before making a decision, others may expect you to produce evidence of the faults. In the same way, assuming you can prove the item was faulty, some sellers will fix/replace it willingly, others may not, preferring instead to resist your claim in which case you may have to take them to court.

Hopefully our Sale of Goods Act guide will be helpful http://www.which.co.uk/consumer-rights/sale-of-goods/understanding-the-sale-of-goods-act/ and there’s also a guide on taking claims to court here: http://www.which.co.uk/consumer-rights/making-a-complaint/taking-a-dispute-to-the-small-claims-court/

Thanks.

Member
HarryMonmouth says:
3 May 2011

I think a lot comes down to how much the extended warranty costs. For instance at Currys an extended warranty (which covers accidents and breakage as well) on a TV might cost as much as a new TV over a 15 year period if renewed every five years. On their LG 2762D which I bought a few months ago doing the same thing would have seen you spend as much as a new television somewhere between 25-30 years. Nowadays I don’t expect TVs to last like they did in the days of my 1960s Sony Trinitron (still working). I might think that replacing in 15 years would be likely. I would be extremely surprised for a TV to last for 25 years. If I have only doubled my outlay to get a TV that will be repaired for free or replaced even if it gets knocked off the table by the dog for 25 years then I think that kind of peace of mind is worth it.

Profile photo of richard
Member

Since I moved into this house in 1971 not one TV has gone wrong – though I have relegated or replaced two or three as new facilities have been added to newer TVs – or the newer Flat screens. I even still have my old 9″ black and white portable which I bought when 405 lines was replaced by 625 lines!

In all honesty I don’t think I would want a very old TV repaired anyway as most facilities I now take for granted are not on the old TVs – and new TVs are comparatively inexpensive. .

Member
David Hague says:
3 May 2011

Actually, though I also had a 1960s Sony that lasted years, I think today’s TVs probably last longer, due to more solid-state technology. But that isn’t the point.

How long before you want to buy a new one due to the fact that the technology changes faster? I suspect many people will be replacing their TV after no more than ten years hese days.

Member
Maurice says:
3 May 2011

I have used extended warranty on my washing machine and when it broke down needing a new drum they said they would replace it with a new machine and so they did, new machine came 10 days later, I have taken out new extended warranty to cover my new machine I have now for five years, the extended warranty was cheaper than having to buy a new machine, I have saved money about £300 I shall bank that saving and use it If I ever need to, I call it peace of mind.

Maurice

Member
Malcolm Chisholm says:
3 May 2011

Please could we have a page on how to use the Sale of Goods Act, including specimen letters to use?

Malcolm

Profile photo of Patrick Steen
Member

Hello Malcolm, we do indeed have a guide on how to use the Sale of Goods Act, which you can find here: http://www.which.co.uk/consumer-rights/sale-of-goods/understanding-the-sale-of-goods-act/ as well as sample letters for you to use and adapt: http://www.which.co.uk/consumer-rights/sale-of-goods/understanding-the-sale-of-goods-act/sample-letters/

I hope they’re of use to you!

Member
Terry says:
3 May 2011

Essentially these are just an insurance policy, so you take a calculated risk if you need or think you’re likely to need one or not – based on the type of product, amount of usage, the brand and it’s reliability, etc. As long as you have shopped around for the warranty, like most insurance policies, the moment you need to claim, generally (excluding poor insurers !) , you recoup the money pretty much straight away.

I paid approx £20 for an extended warranty which also covered accidental damage on a digital camera, and when it was damaged, the camera was collected free, repaired via the manufacturer and returned perfect. Thus would easily have cost more than the warranty fee, and it still has 2 more years to run !

Member
reg says:
4 May 2011

bosch combi boiler 2 weeks out of garrantee engineer plus parts £250
hoover washer 2 weeks out of garrantee engineer plus parts £115 currys £149
??

Profile photo of tr3
Member

Like Terry says extended warranties are just insurance policies. At existing prices they are very poor value with high margins for retailers. They could be a good product for those for whom the risks covered are a real problem, those with limited incomes. As it stands those who actually need them end up paying far too much. Just another way of soaking those less well off.

Member
Jay says:
4 May 2011

Most of the time extended warranties are pointless, and it’s disappointing to read that just about every manufacturer is in breach of the EU laws. Seems the UK follow European law when it’s barmy and not in the public interest, and ignore it when money is on the table – I doubt the Government is going to turn away tax on 750million.

I have bought extended warranties where it made sense, or I had been burnt in the past. The Xbox360 and PlayStation 3 are both great examples where I had failures just outside of warranty, but no matter how many times I quoted (or emailed them) sale of goods, fit for purpose etc info, it got me nowhere. Since then I have taken out extended warranties through the retailer for my replacement consoles – but other than that I avoid extended warranties.

Profile photo of stafin
Member

I agree, some years ago I bought a computer at P C World at Lakeside and was harassed so agressively by the salesman to buy this insurance (which included the assistance of a senior colleague)that I almost cancelled the transaction. Thankfully I did not give in to this bullying and have not purchased from this store since.I never buy this extra insurance on any item when offered ,which leaves behind a disgruntled salesperson.

Member
bechet says:
5 May 2011

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 (the usual manufacturer’s guarantee period) it probably won’t fail within five. My TV (inherited from my mother in law) is at least 20 years old and has never received any remedial attention. And for smaller items the warranty often costs almost as much as the goods.

Member
ali says:
18 May 2011

i think extended warrenties are SOMETIMES worth the money. for example i have a large family and i a washing machine is vital to me. most washing machines last me about 2 years at most. i do not have the money to fork out £300+ on a washing machine every time it goes wrong. most companies dont want the money strait away anyway and some prices are negotiable. its peace of mind not to worry about washing machines. they’re not fun to shop for anyway.

Member
wildgunman999 says:
3 November 2011

I have successfully used the Sale Of Goods Act. I got a microwave from Argos which packed up after 16 months. I called up and I was told to get it examined by an expert (i.e. a microwave-repair shop), and a letter saying it was the manufacturer’s fault. I was told they would even pay for the cost of the expert’s examination. Luckily I wasn’t charged by the ‘expert’, but I got a letter, took it in and got a refund. 2 points to note:
1. You won’t get a full refund; you get a refund of the value of the product over its expected lifetime of 6 years, minus the time you’ve had it already. e.g £100 item is worth £1.38 per month of the six years, so they subtracted abt £22 for the period I had it in good condition.
2.At every stage some zonker will try to tell you it’s ‘out of warranty’, or ‘go back to the manufacturer’. You have to educate them, stand your ground and get them to bring out the knowledgeable person, even it it turns out to be the 4th person as in my case.
The shops seem to call it the ‘Six Year Care Plan’.

Profile photo of wavechange
Member

Congratulations on achieving what many have tried and failed. I am impressed that you got a free expert’s report, but maybe they were sympathetic to the case of the consumer.

Experts’ reports do not normally come cheap.

Profile photo of normanfoster
Member

Some of us would like to purchase extended warranty cover on certain types of appliances ie: dishwashers, washing machines which only have a one year guarantee and do not want the hassle of going through purchasing expert reviews etc. I am not capable of repairing these and it costs £100+ for a call out inside the M25. It would be most useful if “Which?” could provide reviews of the market for these types of policies to give us a guide as to which are worth buying and which are not. I have just been offered a 4 year extended warranty on a dishwasher for £69 via the Cooperative Electrical website – it looks good – but is it? For this price I am tempted to give it a go!

Member
Carl says:
15 March 2012

I totally agree that would be a useful article!

Member
s.gibbo says:
1 February 2012

Many of the mid-high end price items come with 5 year warranty as standard, the reason to buy one on cheap items is that most parts are made in china and to pay a call out from most companies is rediculous, i recently purchased a cooker from my local euronics store, the cooker was £449 and the 5year warranty cover was £79, which i thought was very good, especially as i had paid £50 call out on my old one just to find out it was beyond repair, i would never buy one for laptop/tv because they are so expensive in relation to the original purchase price, white goods cover seems reasonable from my own experience.

Member

I bought a LG60PX990 last January which developed a fault within 2 weeks and was replaced by the seller no problem. The replacement has just powered off last night, 2 weeks over its warranty. Any help would be much appreciated.
Thanks

Profile photo of coco51
Member

‘… according to EU Directive 1999/44/EU, a minimum two-year guarantee should apply to the sale of all consumer goods everywhere in the EU’

This question may be slightly off the extended warranties topic but it is related. Can anyone tell me why some manufacturers and retailers are still insisting that you only get a one year warranty and that is that. Surely under this EU law manufacturers and retailers re legally obliged to adhere to the two year warranty period?
I have a printer that is not functioning after only 19 months of moderate use and Amazon are refusing point blank to entertain any repair or replacement, I don’t understand how they can deny responsibility under EU law, much less under the ‘quality’ clause that things should last a reasonable time, with the UK’s six year claim period.
Fact is that this printer cost £152.99, and so I would expect a longer life than 19th months – if I had bought a £50 printer and it only lasted 19 months I could now still buy two more £50 printers and have a further three years use for the same money. Can anyone advise?

Member
HarryMonmouth says:
23 August 2012

As the chap has said above after the first six months you have to prove that the fault was with the device when you bought it. Some companies are fine with helping you out with replacements up till the end of the first year anyway just for good customer relations. After that first year it always seems to get a bit tricky with almost all companies. The important thing is that you do not wait. As long as it can be shown that you have started arguing against them in good time this will go in your favour even if it does take a long time to get a replacement.

I would suggest you look for some form letters here on the which website. I know they have some, you can find the url if you look further up this thread of comments. Try those before anything because they won’t cost you anything. After that I would say make use of your CAB and if that fails a lot of local MPs can be very helpful, particularly if you are in a libdem area. For all the bad that is said about them they are often very helpful to constituents because they know they need to be.

The company should give in by that point. Of course there may be help available from certain computer related publications that do a page for consumer advice. The negative publicity there can often force a company’s hand. Unfortunately it is not simply a matter of companies doing the right thing though. A lot of these companies have become so successful by relying on the fact that consumers often can’t afford to take them to court and will often not bother to chase up the money.

Profile photo of wavechange
Member

As Harry says, it is the responsibility of the consumer to provide evidence that the fault existed at the time of manufacture.

In many cases the fault may not have existed at this time but may have resulted because of poor quality components or bad design. Goods are expected to be of merchantable quality and fit for their purpose.

While I applaud Which? for all they do achieve, I really wish they would fight for more protection of the consumer, remembering of course that manufacturer’s must not be expected to foot the bill for goods that have been abused.

I think the way forward may to encourage manufacturers to provide longer warranties, including parts and labour. This would lead to better quality products because the manufacturers would not want to foot the cost of repairs.

Jan’s message about the EU requirement for a 2 year warranty is interesting, and I had not heard of this. Maybe I’m not alone!

Profile photo of Patrick Steen
Member

Hi Jan, the EU laws relating to a 2 year warranty weren’t incorporated into English law on the basis that, regardless of a length of warranty, consumers have longer rights to enforce against a retailer under the Sale of Goods Act.

The main problem here for consumers is that the burden lies with them to prove that the printer has an inherent defect that has taken time to manifest itself i.e. it is not something they have done to cause the fault.

Hopefully our Consumer Rights guide to the Sale of Goods Act will help: http://www.which.co.uk/consumer-rights/sale-of-goods/understanding-the-sale-of-goods-act/
And template letters are here: http://www.which.co.uk/consumer-rights/sale-of-goods/understanding-the-sale-of-goods-act/sample-letters/

Wavechange, we’ve been working hard on feeding into the Consumer Bill of Rights consultation to make sure rights in the UK are tightened up and can be easily understood by everyone. Consumer Affairs Minister Norman Lamb is looking for feedback on the Consumer Bill of Rights and bringing the Sale of Goos Act into the 21st Century n this guest Conversation, so you can tell him what you think here: https://conversation.which.co.uk/consumer-rights/norman-lamb-returning-faulty-games-downloads/

Profile photo of coco51
Member

Thank for your replies guys. I think there is a subtle difference between something being faulty at the time of purchase, and not of a sufficient quality […]. I contacted Mr Lamb by e-mail before seeing this post, and he replied very promptly from his holiday location to say he has passed my comment on to the relevant people looking into this.
I don’t understand why this has been so long in being investigated – the EU directive came out in 1999 and in 2004 there was an EU report stating that the UK had not assimilated the directive into law and that not doing so was a detriment to British consumers – I wonder why Which? haven’t been more vociferous on the matter – going back to the original theme of the thread, a lot of companies are charging for warranty rights we ought to have anyway.

Profile photo of Patrick Steen
Member

Hello Jan, you can read about our latest on extended warranties here: https://conversation.which.co.uk/money/extended-warranties-oft-dixon-comet-argos/ The OFT is currently consulting on the matter.

Panasonic also changed its potentially misleading warranties after questions from Which?: http://www.which.co.uk/news/2012/08/panasonic-changes-potentially-misleading-warranties-293536/

Profile photo of wavechange
Member

Patrick

Perhaps Which? could do an article giving some examples of how members have gone about obtaining an expert report on items that have failed outside the guarantee period. It would be interesting to know how easy this is, how much it costs, where to get a report, and what the outcome of their claims has been.

I don’t know a single person who has even tried to get an expert report, but I know many who have have thrown out electrical and electronic equipment that has failed after a year or two.

I would also like to know whether problems reported repeatedly on websites (e.g. Sony TVs with dark band and shadows) can be used as evidence of a design fault.

Profile photo of Amanda Diamond
Member

I’ll pass your suggestion onto our news and investigations team wavechage. And I would imagine that problems being reported on forums could form part of the evidence of a problem – as long as it’s the same problem that you’re experiencing.

Profile photo of coco51
Member

It would be very helpful to know where to get an ‘expert’ opinion for my Kodak looking online for engineers, most don’t deal with Kodak (could there be a reason for this?) and in any case take the view that domestic inkjet printers are not worth repairing. But over and over the consumer is at a disadvantage because by the time you’ve paid out for an expert opinion and court costs you’ve spent as much as a new printer costs anyway. I’m pretty sick of the way the government fails to protect its citizens.

Member
Nicky says:
16 October 2013

I have had a few extended warranties with Domestic & General which have proved worthwhile. I have had a bosh dishwasher repaired several times until they finally wrote it off & replaced it after 5 years. The warranty cost me about £120 but the replacement dishwasher was over £600.
I have also had a Miele fridge freezer repaired (door seals went & new doors fitted) this repair was costed at £800. The fridge freezer has now conked out & they will pay 40% towards a new one as its over 6 years old.
One question I do have is can I insist on buying the item from a supplier of my choice? D&G have a preferred online supplier (appliencesonline.ao.com) who do not stock the item in the colour I want.

Member
Wildgunman999 says:
9 May 2014

Interesting to see that this discussion is still going.
I’m sure for most purposes an ‘expert’ is someone qualified to repair the item, and a scribble on their letterhead with the right wording will do the trick. Worked for me back then with my microwave- my ‘expert’ was the owner of an authorised microwave repair shop, and he kindly did me a couple of lines on his letterhead- sorted.
Note though Argos offered to pay the cost of the expert’s expenses, though I don’t know if this works across board.

Member
andrea says:
10 September 2014

my mom purchased a new cooker in feb and under the warranty its already been repaired 4 times,one being the control knob markings were coming off and were getting red hot ,engineer told her we will supply new knobs but it will probably happen again so just keep calling us!! To me the knobs shouldnt be getting hot is this possibly a design fault or a saftey nightmare,should she be allowed a new cooker under the title’not fit for purpose’?

Member
Les the Greek says:
25 October 2014

Interesting comments in this and I must agree that, for the majority of UK users, warranties are over-priced as most consumer goods these days are ‘throw away’ with a life expectancy of about 5 years.
In support of them (warranties) and one in particular, Currys etc., I would say that they are excellent value if you are intending to take your purchases abroad. We live in Greece, on a small remote island, and the cost of an engineer visiting would exceed the price at which the appliance would likely be written off. Although it would be a nuisance that they will only supply a voucher to replace the item(s) with, at least we do have a Currys subsidiary in Greece and the voucher would be valid there.
Why don’t we buy from the Greek shop(s) in the first place? Well, we have to come back here every year anyway, by car, so buying here isn’t a problem. The real reason though is that the goods aren’t available there and/or the prices are greater than buying here. Unfortunately the average UK consumer doesn’t seem to realise that the UK is actually very cheap as far as most consumer products are concerned. You may find the occasional bargain abroad, but because the majority of purchases here are being made on the internet the prices are very competitive.

Profile photo of wavechange
Member

At one time it was normal to sell goods with a one year guarantee or warranty, but an increasing number of products come with longer warranties, either provided by the manufacturer or the retailer.

In the car market, longer warranties have become an important selling point and we need to push for longer warranties because it is so difficult to get retailers to take any responsibility for goods that break down outside the warranty period by making claims under the Sale of Goods Act.

If manufacturers offer longer warranties free of charge, this will improve product quality because if they have to pay for repairs, they are less likely to manufacture sub-standard products.

Profile photo of Castle
Member

Great point about car warranties, most now come with at least a 3 year warranty; but your humble household appliance is still only 1 year. Very simply it comes down to cost rather than quality of the product.

Profile photo of wavechange
Member

I’ve been keeping an eye on warranties for a couple of years and an increasing number of appliances are sold with longer warranties. Sometimes it is a manufacturer’s promotion and you have to register the appliance to qualify for the free extended warranty. Retailer John Lewis offers a two year warranty on all electrical goods and five years on TVs. Longer warranties are more common on more expensive goods but some manufacturers and retailers are being more generous. Of course, no warranty, either included or paid for, will cover misuse or wear and tear – so reasonable care is needed.

Member
John Murray says:
19 May 2015

Beware people selling extended warranties for washing machine. Here is a scam.

Jamie from so-called ‘Appliance Protector’ asked to speak to my wife re our Hotpoint washing machine warranty expiring today he said. He was offering an ‘extended warranty’ with 3 year protection costing £58.33 per year, £175 in total. I said I needed to go downstairs to check file. When I did, I discovered we already had an extended warranty from 31 July 2014 – 30 July 2017 organised through John Lewis.

I think the same person phoned me the other day but wouldn’t answer me when I asked him who was providing the warranty now as he implies that it is them. So last time I put the phone down. This time it was the same spiel and the same reluctance to say who was providing the warranty now. He obviously has details from John Lewis as he knows the name of machine but was wrongly claiming our warranty ended today, 18 May. The actual date on our paperwork was 31 July. So they must just phone people up and try and trick them into agreeing by implying they are already providing protection.

So beware Jamie from ‘Appliance Protector’ who incidentally I couldn’t find on the internet.

Member
Pete says:
7 August 2015

A simple ?? Or not if I buy a washing machine from Germany am I covered by their five year cover or only by England’s cover