Are we being served? The rort of extended warranties

Ron Boaden says:

08:22pm | 26/04/10

A couple of points here. Firstly, the reason Exteded Warranties can only be purchased at the time of sale is due to a stupid Govt. regulation that states that (for some obscure reason) if it is offered after the sale, it constitutes insurance advice, which can only be offered by a licenced advisor. As a person who works as a BDM for an Extended Warranty providor, I can assure you that we would be delighted if we were permitted to have the offer available at a later date. Secondly, like all contracts, they are only as good as the contract offered. An ethical provider will offer an ethical contract. Customers should read the terms & conditions at time of purchase.

David (London) says:

08:34pm | 03/09/09

A considered and practical guide to this issue. Thank you.

amplion says:

05:33pm | 03/09/09

CHOICE, as usual, is leading the way in representing the interests of consumers.  Like the other posts here, we have found the “extended” warranties are a complete con and a total waste of money.

Tedb says:

02:49pm | 03/09/09

It’s not an EXTENDED warranty, it’s ANOTHER warranty. A De Longhi coffee machine we purchased at Hardly Normal failed recently and, under the extended warranty, was replaced by a much cheaper Breville. Okay, it does the job, but it’s a bit misleading to discover the difference down the track. I won’t buy them again,.

Cameron Price-Austin says:

01:01pm | 03/09/09

Warranties are useless anyway. We bought new carpet from Carpet Choice and was told it was 5 star extra heavy duty, scotch guarded and came with a 5 year warranty. Less than a month later it was soiled and marked, just from walking on it (no shoes, pets, food etc - seriously, just sneeze in the general vicinity of this carpet and it stains).

We went back to Carpet Choice who told us it was normal wear and tear and refused to honour the warranty.

If they’d offered us an extended warranty (up to ten years for example) at the point of sale, we probably would’ve taken it. Then where would we be? They probably still wouldn’t honour it. Until retailers are forced to honour the warranties they sell, you’re better off saving your money.

DG says:

12:22pm | 03/09/09

Instead of your “30 days quote” theory - why not offer a 7 day cooling off period? This would allow the person to buy on the spot (and if they care, research and exercise their cooling off rights).

Of course, this, like various other redemptions, almost assures the retailer of the profits because the customer is unlikely to exercise their rights (I recall reading that a recent cash back deal on certain merchandise resulted in about a 50% response rate, meaning that around half of the purchasers threw away cash rather than sending off and application for a refund).

I tend to agree with Jake that we must place some of the responsibility onto the purchaser - instead of granting extensive rights to consumers how about they take reasonable steps to ensure their own safety (like gambling this could be another tax on stupidity). I’m not suggesting that the retailer should be entitled to make dishonest claims, but if they offer useless services and people are willing to pay for them because they are unwilling to look out for themselves….that’s fair game.

Ben says:

11:00am | 03/09/09

On a side note Apple allowed me to buy extended warranty for my iPod much after I had originally purchased it from them but only if it was still inside the initial 12 month warranty period.

Jake the Muss says:

10:20am | 03/09/09

It’s a bit rich to argue that because people are risk averse they therefore are paying too much for an extended warranty.  It’s worth what it is worth, and if you are a risk averse person then that will be a higher amount.  If you aren’t a risk averse person, you probably won’t buy one at all.

People should be more aware of their statutory rights but I don’t think businesses should have to make friendly signs and put them everywhere.  Caveat emptor, do your due diligence.

You aren’t being forced to purchase anything.  If you feel pressured to buy it then you are a weak willed fool and I want to personally thank the store for removing money from your silly little fingers.

http://www.pimpinforfreedom.wordpress.com

Dave from Albury says:

09:09am | 03/09/09

One of the biggest problems, in my opinion, is that most extended warranties sold by electrical retailers are not an extension of the manufacturers warranty, but a service contract with a separate third party. Therefore they can’t guarantee that there will be spare parts available for your item, have much less control over the quality of the repair and don’t have the concern for protecting a brand’s reputation the way that the manufacturer would.

Nick says:

08:54am | 03/09/09

A statutory warranty may entitle you to a repair or replacement… but the extra effort that it takes to enforce this right often means that you are better off with a purchased warranty.

I don’t buy extended warranties, but it is more on principle than anything else. If know that if I actually had to make a claim under a statutory warranty there is a good chance I would get some resistance. Too many retailers either don’t know what a statutory warranty, will try and argue that it doesn’t exist and that a purchased warranty is required, or will insist that the product lasted long enough and that it is of merchantable quality. The average consumer has no chance.