Extended warranties – are they worth it?

The Consumer Rights Act 2015 is already on your side.

It states that goods should be of satisfactory quality, fit to do the job intended and last a reasonable length of time.

If you buy a new TV or washing machine and it breaks down within six months, you can take it straight back to the shop.

It’s up to them to prove that the appliance wasn’t faulty when you bought it.

You might even be legally allowed to return goods up to six years after you buy them.

But this depends on whether you’re able to prove that a fault was present when you bought it and that normal wear and tear wasn’t the cause of any problem.

Before you think about paying for an extended warranty, remember that manufacturers often guarantee their goods for up to 12 months and in some cases longer.

Plus, some retailers will top up the period of guarantee on top of that of the manufacturer – for free.

This can add up to five years total cover and it’s all included in the price.

If you pay by credit card, you’re automatically covered on any goods valued between £100 and £30,000.

The law states that the credit card company must cover you if goods are faulty or not as described, or if they’re not provided under the contract.

Electrical and mechanical breakdown aren’t usually covered by your domestic contents insurance, but theft and accidental damage are.

So it’s worth checking the details of your policy – there’s no point paying twice to cover the same thing.

But check whether your contents insurance policy needs you to pay an excess when you make a claim. Many extended warranties don’t.

There are reasons why an extended warranty might not be, including:

• most electrical goods and appliances are getting cheaper over time
• they’re also getting more reliable, so you’re less likely to need a warranty
• repairing is getting more expensive as appliances get more complex – so it can be cheaper to buy new than repair
• technology is advancing, so replacement goods are not only usually cheaper, but are often going to be better than the one you had before – perhaps more energy-efficient and so cheaper to run, or with the latest features included in the price.

While some retailers sell extended warranties for electrical appliances and white goods, these warranties often have time limits for the repair.

This might be as long as four to six weeks, so you need to think about whether you would want to wait that long for your appliance to be repaired.

For example, could you manage without a washing machine for six weeks?

Some policies cover repair costs but not all of them cover parts and labour, while others place a cash or time limit on claims.

So it’s important to read the details very carefully before signing up.

Some retailers also sell insurance for appliances you already own but which are not currently insured.

But these come with lots of conditions and usually a ‘no-claim’ period immediately after the start of the cover, during which claims for breakdown won’t be paid.

Also, some policies are only ‘service contracts’ so aren’t regulated by the Financial Conduct Authority or covered by the Financial Ombudsman Service.

That means if the retailer goes bust, there’s no guarantee that your claim will be paid.

To get the most from the Compare Extended Warranties comparison website, enter:

• the price
• the electrical item, for example ‘dishwasher’
• how many years the manufacturer provides a warranty for.

You can then see results by price or how long the warranty is for.