Should you bother with an extended warranty?

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Household appliances can be expensive to replace if they break down. Can an extended warranty give you extra protection? Here’s what you need to know.
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An extended warranty is a type of insurance policy that gives you extra cover when something you bought breaks or stops working. 

While consumers have statutory rights to protect them against buying poorly manufactured goods and services, an extended warranty can give them extra peace of mind. 

However, such policies can be extremely expensive, and some don’t offer any additional protection. This is why it’s really important to shop around and understand what’s on offer before you buy.

Here we explain all you need to know.

Pros and cons of extended warranties

Pros

  • Peace of mind

  • Multi appliance discount

  • New for old cover

Cons

  • You may already have cover

  • Monthly cost

  • Long list of exclusions

Here is more about what extended warranties cover

When should you get a policy?

You should consider an extended warranty if:

  • Your appliance would be expensive to replace if it stopped working

  • You have several items to cover and could get multi appliance discount

  • Your appliance is outside its manufacturer’s warranty

  • You want accidental damage cover for your appliance

Bear in mind that as technology advances, appliances are less likely to break and become cheaper to replace. This could mean an extended warranty is an unnecessary cost.

Things to consider before buying an extended warranty

When looking for an extended warranty, you should check:

  • Is it a service agreement or an insurance policy? You will be protected by the Financial Conduct Authority if you get an insurance policy.

  • Is your appliance within the age limit? Cover usually ends when your machine is more than eight years old.

  • Do you have to pay a separate call-out charge if you claim? Some insurers do not cover the cost of an engineer coming to assess the damage.

  • Is new-for-old replacement cover included? If your appliance is under three years old and too expensive to repair, some warranties may replace it.

  • Is it worth the cost? It may be cheaper to put the money you could spend on a warranty into an instant access savings account and use the funds there if your appliance breaks.

What can you claim for, and what is usually excluded?

An extended warranty is only worthwhile if it pays out when required. Make sure you know what you can claim before taking out the cover by checking:

  • The exclusions: This varies between policies, so check the small print to see what is not covered before taking out cover.

  • The excess: You will have to pay this every time you claim, so make sure it is affordable.

Claims limit: You may be restricted to how many times you can claim, or how much you can claim for, for example, £500.

Check the terms and conditions because some policies end after you claim. This means any premiums you have paid will be lost, and you won’t be covered for future damage.

Here is more information about claiming on your extended warranty

Are you already covered?

Before buying an appliance warranty, check to see if you already have cover. Places to check include:

  • Manufacturer’s or retailer’s warranty: If your appliance is still under guarantee, there is no need to take out separate cover. Manufacturer or retailer guarantees typically last one to five years, so check your purchase receipt to see if you have cover.

  • Home insurance: You will have some cover for your appliances on your home contents insurance, for instance, in the case of fire damage or theft. However, you may not have accidental damage cover or breakdown repair.

  • Packaged bank account: Some reward accounts come with free 12-month extended warranties. Although most packaged accounts come with a monthly fee, this could be a cheaper way of getting cover for your appliances.

  • Consumer Rights Act 2015: If your appliance develops a fault within six months of being bought, you are entitled to a full refund from the retailer. Here is more about your refund rights.

  • Section 75: If you bought your appliance with a credit card, and it cost between £100 and £30,000, your card provider must refund you if it is faulty. Here is how Section 75 protects your credit card spending.

How to choose an extended warranty

If you don’t already have cover for your appliances and want the peace of mind of a warranty, you can look for one by using our comparison guide. It’s important not to take one from the shop or manufacturer without comparing it with others as you might not get the best deal.

Get as many quotes as possible so that you can compare levels of cover and find the right policy at the lowest price.

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