This festive period, as many of us go into spending overdrive,
we will inevitably be exposed to the murky world of extended
warranties.
An extended warranty is the insurance that salesmen in
electrical appliance emporiums attempt to sell you alongside
products from headphones to fridge-freezers and gives you extra
protection should that item develop a fault after the
manufacturer's guarantee expires.
In many cases, extended warranties are a good idea. A relatively
small amount, say £8 a year for a £200 camera, can give you wide
protection that even covers the product in the event of accidental
damage. You probably spend that much each year on maltesers so for
peace of mind, the price of an extended warranty can be pretty
reasonable.
Always query what you are being sold.
However, as with most kinds of insurance, you should never just
accept what is offered to you straight away and always query what
you are being sold.
Ensure that the salesman has given you a full breakdown of the
costs - retailers are legally required to display the full price of
the warranty next to the price of the actual product.
Carefully inspect the terms and conditions of the extended
warranty before you agree to anything. You may find the cover to be
relatively narrow and therefore a waste of money, for example some
warranties on washing machines do not cover faults with the
door.
Remember you do not have to purchase the warranty with the
retailer, shop around to see if you can find a better deal. You can
find companies on the internet which specialise in selling
warranties.
Under the Sales of Goods Act consumers have
the right to get an item replaced or repaired for free.
Consider whether you actually need the extended
warranty or not. Under the Sales of Goods Act consumers have the
right to get an item replaced or repaired for free within a
"reasonable" amount of time of the purchase. So say if your £600 HD
plasma TV broke down after two years and is no longer covered by
the manufacturer, you could argue with the retailer that an item
worth that much can be reasonably expected to last at least as long
as that, if not longer.
Lastly, check your home insurance policy or with your bank to
see if you are already covered for new purchases.
For more information on this topic please read our free guide on extended warranties and
consumer rights.
Claims Financial
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