If you’re buying an electronic item or household appliance on the high street, you can guess what happens when you reach the till.
Buying a TV, fridge, dishwasher or computer is complicated enough, without having to work out whether you want an extended warranty as well.
That’s why so many people simply do what the salesperson tells them and sign on the dotted line, only to leave the shop with strong misgivings.
Did you really need that extended warranty? The chances are you didn’t.
And once you have taken a closer look at the receipt, you will realise how expensive it really is, and may start to get annoyed.
But there is a superior, and cheaper alternative. It is called a household appliance warranty, and typically offers much better cover than anything you will buy on the high street.
Better still, you don’t have to speak to a salesman to buy it. You can compare costs and cover online, without feeling that you’re being hassled.
And it doesn’t just cover one household appliance, but all of them.
Don’t repair, replace
If you buy an item, either on the high street or online, you automatically benefit from the manufacturer’s 12-month guarantee.
If it breaks down in that time, they must either repair the problem, or replace the item. The big worry is what happens if it breaks down after the manufacturer’s guarantee has expired.
That’s why people buy extended warranties, because they promise to fix any problems that appear in the next two or three years.
But the people who benefit most from extended warranties are the shops that sell them, because they make big profits from over-priced warranties.
The chances are, you will never even claim on your warranty. As the quality of electronic goods and household appliances increases, they are less likely to break down.
A decent washing machine is unlikely to go wrong in the first three years, when the warranty covers you, but it might start having problems once it gets older than that.
Given the relative affordability of many electronic items (you can even buy a DVD player for under £30), and the rate at which technology advances, it often makes more sense to simply buy a modern replacement once yours bites the dust.
Extended household applicance warranty is not usually covered under your contents insurance, so check your small print to make sure you are covered for all your needs.
Time to clean up
In 2005, the government tried to regulate extended warranties on household appliances and electrical goods, to make the sales process more transparent.
But some claim this shake-up failed to clean up the market, and the Office of Fair Trading receives regular complaints about the way warranties are sold, or their failure to pay out if the item develops a fault.
There has to be a better way.
If you’re brave and bold, you will politely reject the salesperson’s offer, and walk out of the shop.
Then the doubts might occur. What happens if your new purchase really does break down after 12 months? The good news is that there is an alternative.
A handful of specialist companies offer household appliance warranties that don’t just cover a single purchase, but a range of different items throughout your house.
As well as offering much wider cover than extended warranties, household appliance cover is often cheaper to buy.
Many household appliance warranties will cover older items, perhaps up to eight years old.
This is hugely valuable, because older pieces of equipment are much more likely to develop faults.
Most policies also allow you to stop your premium at any time, at which point cover instantly ceases. By comparison, most extended warranties sold on the high street lock you into a two or three-year payment term, with no get-out clause.
You might even be able to add an accidental damage clause to your household appliance warranty, something standard extended warranties won’t offer you.
A typical household appliance policy might cover three items, such as a washing machine, dishwasher and TV, for a set payment of around £10 a month.
This might be enough for you. Or you might prefer to buy multi-appliance cover, allowing you to protect, say, nine kitchen appliances with a single monthly payment. Or you can buy a specific computer warranty.
Before buying any kind of warranty, ask yourself the following questions:
What kind of guarantee am I getting from the manufacturer?
Is the appliance likely to break down? Modern domestic appliances are increasingly reliable. How expensive is the item to repair or replace?
If the cost is pretty low, you can probably take the chance of going without cover. Does my household contents policy cover me for accidental damage, fire or theft of the appliance?