Extended warranties are a relatively new sales opportunity for the retailers and have not been without their fair share of bad press. Both the OFT and the Competition Commission have investigated claims of unfair terms, mis-selling and excessive profiteering. So the question is, are they worth it?

Your basic warranty

Let’s first define what a warranty is and what it does. When you buy an electrical item you will often be given a retailer or manufacturer’s guarantee or warranty for a period of time, usually 12 months, and up to 5 years for more expensive products. It is a myth that certain electrical products automatically come with a warranty – there is no legal obligation for shops or suppliers to provide them (although once they have, they are legally binding) – it is simply to enhance consumer confidence in their product and promote sales. It also provides the manufacturer with valuable marketing information which is why you will need to register your product by filling in a card with your personal and purchase details in order to activate it.

Warranties are basically a commitment to repair or replace defective parts within a specified time frame – usually 12 months for small electrical items. When this time is up, consumers are commonly told by shops that their responsibility is at an end and there is nothing further they can do. This is often not the case. The important point about warranties is that they should never seek to replace or take precedence over your statutory rights under the Sale of Goods Act, and even after your warranty has run out, you will still be protected by these rights which can run for up to 6 years after purchase.

Your statutory rights

In the absence of any warranty and as we have pointed out several times, the retailer is automatically liable for any faults which develop within the first 6 months. After this time, you may have to prove that the any fault was not down to misuse or wear and tear, although factors such as price paid, model specification, the length of time you have had it (and the length of time it should reasonably last) etc will also be taken into account. Therefore if you buy something which should last around 7 years but has broken down after a year or even after 3 years, the supplier has a duty provide a satisfactory repair – or if this cannot be done, a replacement. If neither a repair or a replacement can be agreed on then the shop can give you vouchers towards the cost of an alternative replacement or a partial refund. Whatever happens, whenever it happens, and whatever remedy you choose, your first and only port of call should be the retailer.


The following statements are frequently made by retailers and are untrue:

  • You can only return items if you have a valid, registered warranty
  • No longer our responsibility, you’ll have to contact the manufacturer
  • Your 12 month warranty has run out, nothing further we can do.
  • We’ll have to send it off to the manufacturer, there will be a charge for repairs / parts / shipping etc.

Your extended warranty

An extended warranty becomes valid after the basic one 1 or 2 year manufacturer or retailer’s warranty has run out and will then run for a further 2 or 3 years. It is the same as the basic warranty but will often cover damage in event of accident or misuse also. Some even cover loss or theft. In this sense it is basically an insurance policy for which you will either pay a one-off premium or a monthly fee. But are they worth it?

Having read the above you would probably wonder why you should be paying for an insurance policy you effectively already have under the Sale of Goods. The only difference with extended warranties is that they provide additional cover for damage cause by misuse and possibly loss / theft. However, in general, the feeling is that for retailers are tending to ‘hide behind’ warranties and using them to mislead consumers about their statutory rights. Moreover, the unfair way in which they are sold has also been under the spotlight. What consumers need to understand is that for the retailers, the sale of extended warranties is often more lucrative than the sale itself. So this, combined with large commissions was making for aggressive sales tactics just before the item was due to be paid for. For this reason, regulations have now been introduced to safeguard consumers against intimidation and provide them with all the knowledge they need to make an informed decision.

New regulations for extended warranties

There is now a requirement on retailers to ensure the following:

  • The price of the extended warranty is displayed alongside the electrical item instore or on press adverts.
  • The provision of information regarding the cooling off period of 45 days, cancellation rights, whether you would be protected in the event the warranty provider goes out of business, and whether the policy terminates if you make a claim.
  • The provision of information regarding consumers’ existing statutory rights
  • The fact that extended warranties are also available as ‘stand alone’ products from alternative sources.

The above information must also be presented in plain English – not legal jargon.

Worth it?

So, should you opt for an extended warranty? All we can say is consider it in the context of your existing statutory rights and read the terms and conditions very carefully – for example, do they offer ‘new for old’ or just a repair? Under no circumstances be bullied into accepting one at the point of sale and parting with even more cash than you’d like. If you decide you do want an extended warranty – shop around from the dozens of available providers, and remember your 45 day cooling off period.