Avoid unnecessary warranties

Consumer groups are warning shoppers to think twice before taking out extended warranties on electrical items this Christmas.

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Breakdown cover on electrical goods can cost more than half the price of the appliance itself and is often unnecessary, argues the consumer group Which?

Meanwhile, Consumer Direct, a government-funded advice service adds that buyers already have protection when a new electrical good breaks down.

The warnings come as many electrical goods stores prepare for their sales peak both at Christmas and in the New Year. Up to £900m is spent on extended warranties each year, much of it in the coming weeks.

But an investigation by Which? found that a Kenwood smoothie maker sold for £17.50 has a three-year extended warranty which costs £14. Meanwhile, Argos is selling a Sony DVD player for £45, while the three-year cover costs £25.

Although such policies are sold as offering "peace of mind", a replacement item could cost little more than the warranty - and with product reliability improving people are less likely to need cover in the first place.

If an item breaks down, many stores tell customers that their legal rights run out when the 12-month guarantee does. But this view is rejected by Which? Its senior lawyer, Peter McCarthy, says: "Don’t let a seller have you believe that your legal rights end with the guarantee. The seller will be liable if the goods it sold you aren’t of satisfactory quality."

Shoppers have statutory rights which mean that in some cases, stores should repair faulty goods even after 12 months, when extended warranty cover would start.

Michele Shambrook, operations manager for Consumer Direct, adds: "When you buy domestic electrical goods you already have certain legal rights. If the appliance breaks down within a reasonable period of time, the retailer is obliged to put the problem right by repairing or replacing the product.

"It may be worth buying an extended warranty if it gives you something over and above these rights, such as accidental damage cover - but you often you get this under your home contents insurance anyway."

For those people who decide that they want the protection and peace of mind which an extended warranty offers, Consumer Direct has this advice:

  • You do not have to buy a warranty at the shop where you bought the goods.
  • Make sure you understand the terms of the agreement and what extra protection the warranty has to offer before deciding to buy.
  • Don't be rushed into making a decision - retailers must offer extended warranties on domestic electrical goods on the same terms for 30 days if you choose not to buy it there and then.  This includes any discount that was offered.
  • Retailers also have to give you 45 days to cancel the extended warranty, and provide you with a written reminder of this right and the right to cancel at any time and receive a pro-rata refund.
  • You can buy warranties that cover a number of appliances, such as all the electrical equipment in your kitchen, so it is a good idea to shop around for quotes before signing up to a warranty.

For advice on buying a warranty or if you are having problems with faulty goods call Consumer Direct on 08454 04 05 06 or visit its website http://www.consumerdirect.gov.uk/

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