The Office of Fair Trading (OFT) has launched a study into extended warranties, looking at whether they’re good value for money and the competition in the market. Which? believes, in most cases, extended warranties aren’t worth buying.
When buying a television, washing machine or computer, customers may be sold to provide extra cover for the product after any guarantee period – often a year – runs out.
The extended warranty will typically offer protection for an additional three to five years, but we think they’re generally too expensive to ever be worthwhile.
Right to repair or replacement
Which? money editor James Daley said: ‘In most cases, extended warranties are just a waste of money. Electrical goods and most domestic appliances are pretty reliable these days; but if a product does develop a fault, you may be able to claim a repair or replacement from the retailer even without a warranty.’
The Sale of Goods Act will often provide you with necessary protection should something go wrong with your item. If a product breaks down, consumers may have a legal right to repair or replacement.
Sale of Goods Act
Under the Sale of Goods Act, goods must be of ‘satisfactory quality’ and last a ‘reasonable’ amount of time – up to six years after purchase.
Although you probably wouldn’t be able to claim if a £20 DVD player broke down after two years, you should be covered if a £300 TV stops working, as you would reasonably expect it to last longer.
If you do want extra cover for your big electrical purchases, we think it makes more sense to ensure your items are covered under your home insurance policy, rather than buying separate extended warranties for your goods.
Changed your mind on your extended warranty? Follow our steps to .
The extended warranties market is worth well over £750million.
The OFT’s director of consumer and goods group Claudia Berg said: ‘Consumers buy millions of extended warranties on domestic electrical goods each year and we want to make sure they are getting value for money.’
The results of the study are due to be published in the summer.