Worthless warranties: are you overpaying for faulty goods cover?
Extended warranties should give you peace of mind that any issues with your product will be resolved as smoothly as possible - but Which? research has found they don't always provide the cover you'd expect.
One in five bought a retailer's extended warranty for a tech product or appliance in the last two years, our survey* of 2,000 people revealed. But, shockingly, half of those who made a claim during this time said they had problems doing so.
With the cost of living on the rise, many of us are looking to cut back on unnecessary monthly payments. Read on to find out whether retailers' extended warranties are worth buying, and your rights when a tech product or appliance breaks.
One-off repair costs could be cheaper than a warranty
We looked at insurance plans and extended warranties offered by some of the biggest online tech and appliance retailers - such as Amazon, AO, Appliance City, Argos, Currys, John Lewis and Very - and found that the cost and type of cover varied dramatically.
If you buy a new HP laptop, a year's cover with Argos was the most expensive, costing £112.68 a year via monthly instalments.
AO charged the most to cover a Hotpoint washing machine, with plans starting from £6.99 a month for this type of appliance, adding up to more than £83 a year. Currys' care plan was also at the more expensive end for laptops and washing machines.
Our survey revealed that, on average, extended warranties are taken out for just over two years at a cost of £84.80 a year. However, our data on the average cost of repairs for tech products and appliances suggests it might cost you less to organise any unexpected repairs yourself.
Depending on the fault, getting your laptop repaired could cost on average between £68 and £78**, but some faults are more expensive to repair, such as the hard disk or SSD failing which could set you back as much as £104.
Similarly, the average repair cost for a washing machine is between £82 and £108***.
So instead of buying an extended warranty for a fault that might not happen, you will very likely be better off organising your own repairs if the product does happen to become faulty.
- Find out more: your faulty goods rights explained
Far from comprehensive cover
Our research found comprehensive cover is far from guaranteed.
Even though Currys offers a more expensive care plan for laptops and washing machines compared with other retailers, it's the only store we looked at not to include accidental damage in its warranty. Its plan, as well as Argos', does come with additional technical and customer service support though.
You could also be paying for breakdown cover that's already included in the manufacturer's guarantee. Most of the products that we looked at came with a manufacturer warranty of at least one year, with some lasting two or five years, and typically these would cover you for breakdowns.
The warranties offered by Amazon, AO, Appliance City, Argos and Very come with breakdown cover, but their policies don't allow you to claim for breakdown problems that are included in the manufacturer warranty. This means that you're only really paying for accidental damage cover until the guarantee period ends.
Some of the schemes also come with surprising caveats. The warranty offered on Amazon's site - which was one of the cheaper options for all three products - only allows you three successful claims during any 12-month period. Depending on when you notice the fault with your machine, you could be entitled to more than this under your statutory consumer rights. Most of the other policies offered unlimited repairs.
And some of the retailers state that in the event of a replacement they can't guarantee a like-for-like product, which is inferior to your statutory rights. Very's policy says your replacement might not be brand new or of the same colour.
- Find out more: how to cancel your extended warranty
What the retailers say
When we put our findings to the retailers they typically told us that their insurance plans and extended warranties offered customers peace of mind, good value for money with protection above manufacturer guarantees and statutory rights.
Amazon stressed that customers could get help quickly with its plans. AO told us customers could be confident knowing their plans are regulated by the Financial Conduct Authority (as did Sainsbury's Bank when responding about Argos Care plans) and that they ask if a customer has alternative cover in place.
Appliance City wanted us to know that it doesn't undertake a 'hard sell' with its warranties and most are taken out on larger appliances such as range cookers and induction hobs costing over £2,000, which are more prone to accidental damage.
Currys stressed its plans offer a range of supporting benefits such as 24/7 help, a seven-day repair promise, a replacement if an item can’t be repaired and extras such as an appliance valet service. It also reviews its plans periodically to ensure they continue to meet expectations.
John Lewis told us it offers high-quality repairs or replacements and that it already offers market-leading breakdown guarantees and its Protect Plus extended insurance plan adds to that, covering accidental damage with no excess charge.
Very revealed that over the last six months at least 96% of claims have been accepted under its insurance policies with an average repair time of five days.
'I don't want the hassle of the claims process again'
Which? spoke to some consumers who were surprised to find their warranty plans didn't cover them for their faults.
Peter Wickett paid £40 for Very's two-year extended warranty for his Fitbit in 2020.
When his watch strap broke at the start of 2022, he was surprised when Very refused his claim, stating that his warranty didn't cover him for breakdowns until after the manufacturer guarantee period.
After unsuccessfully contesting Very's decision, Peter contacted Fitbit directly and it replaced the product as a gesture of goodwill. But Peter, who has a number of extended warranties with Very, was disappointed by what happened.
Very apologised for Peter's experience but said his policy only includes accidental damage until the manufacturer warranty expires, because they want to ensure they are not providing cover that the customer already receives through the manufacturer.
Contents insurance could offer better value
Although it is hugely disruptive when a tech product or appliance packs in, we're not convinced these extended warranties and insurance plans offer good-enough value.
If you do want the extra protection, or don't think you could afford the upfront cost of a repair yourself, it's worth looking at home insurance that covers all your tech and appliances for accidental damage, rather than having individual plans for each product.
Dean Sobers, Senior Researcher at Which?, explains: 'If your appliances break, don't expect your home insurance to cover the cost. Contents cover typically doesn't pay out for mechanical breakdowns, faulty workmanship or wear and tear.
'However, when it comes to clumsy mishaps, home insurance can be very useful. Most providers including the 29 whose policies we examined in December, offer 'accidental damage' cover which would protect your appliances, gadgets, furnishings and other possessions. The word 'offer' is important: the cover usually doesn't come as standard - and can be very limited where it does - for example, only covering non-portable items.
'Still, getting protection for all your contents is reasonably straightforward and inexpensive to add in when getting a quote, and our research suggests it's highly worthwhile. When we last quizzed insurance claimants, accidental damage was the second-most common reason (after burst pipes) policyholders had for putting cover to use.
'As with all insurance, the cover is subject to exclusions. Some policies won't cover damage, caused by pets, cleaning or tenants. To be sure what your policy does and doesn't do check the wording carefully.'
- Find out more: how to find cheap home insurance
Your faulty goods rights explained
If something you've bought develops a fault, you're protected by the Consumer Rights Act 2015.
You also have rights to cancel your extended warranty policy if you no longer think it's worth paying for.
- You're entitled to a full refund, repair or replacement if you notice the fault within 30 days. After 30 days you can ask for a repair or replacement. If the retailer fails to repair or replace it, you can then ask for a full refund.
- If you discover a fault within the first six months after buying a product it is presumed to have been there since the time of purchase unless the retailer can prove otherwise. During this time, it's up to the retailer to prove that the fault wasn't there when you bought it.
- Your statutory rights for faulty goods last for up to six years in England, Wales and Northern Ireland, taking into account how long you could reasonably expect the product to last. Your rights are covered for five years in Scotland.
- The Supply of Extended Warranties on Domestic Electrical Goods Order 2005 gives you the right to cancel a warranty if it lasts for more than a year. If you cancel within 45 days of taking out the warranty, and you haven't made a claim, you must be given a full refund. If 45 days have passed, you're still entitled to ask for a pro-rata refund.
Find out more: letter to warranty provider who is refusing to pay for repairs
*Which? ran a UK nationally representative survey of 2,000 adults with a boost for people who have taken out extended warranties (500 responses). Fieldwork was conducted online by Opinium in April 2022.
**In March 2022 Which? ran a survey about tech products using panels from Lucid and from its own Which? Connect panel. The total sample size of repair costs for laptops was 714.
***Which? also carried out a survey about large domestic appliances in September 2021 using panels from Lucid and from its own Which? Connect panel. The total sample size of repair costs for washing machines was 97.
