An extended warranty may be defined as a prolonged form of protection on the product the warranty covers. If a product develops a fault after its standard guarantee expires, consumers may use an extended warranty to obtain a suitable remedy.
For this added protection, consumers are asked to pay an extra amount of money. But should consumers fork out more money for these types of guarantees? What are their tangible benefits to consumers?
To assess the potential benefits of extended warranties, several factors must be taken into consideration. In the first instance, consumers should check what is exactly covered by the extended warranty. This means consumers need to read the guarantee’s terms and conditions before deciding whether to buy the extended warranty.
They must check what defects are covered. Does the guarantee only cover mechanical breakdowns or does it also cover wear-and-tear damages and accidental damages?
The type of remedies the extended warranty provides should also be given due attention.
Consumers should also check if the guarantee mentions any additional costs, such as transport costs to move the product from the consumer’s house to the seller’s repair centre. If there are such fees, these must be clearly written in the guarantee’s terms and conditions.
Before buying an extended warranty, consumers should check if they have a similar cover under their home contents insurance policy. If, for instance, consumers already have a home insurance that covers accidental damage of such products, there may be no need to pay for additional protection.
Consumers should check if they have a similar cover under their home contents insurance policy
Another important factor to consider is the cost of the extended warranty. Such a warranty may be worth purchasing if the product it covers is expensive to repair or replace. In other words, the cost of the additional warranty should be weighed against the cost of replacing the item or repairing it outside the guarantee.
Before paying more money for additional protection, consumers should be aware of the commercial guarantee they may have for ‘free’.
Extended warranties are usually offered on products that are normally sold with a standard commercial guarantee to provide an extended protection once the standard guarantee expires.
It is the consumers’ responsibility to shop around for products that have a good commercial guarantee included in the price. Consumers should compare standard guarantees and the benefits they offer. While doing so, they may find products that carry standard guarantees that are as beneficial as the extended guarantee they were considering buying.
Consumers should also be aware of the legal protection provided through the Consumer Affairs Act. This protection gives consumers the right to claim a free remedy if the product purchased is defective or does not conform to the contract of sale.
This right remains valid for two years from the date of delivery of the product purchased. So an extended warranty should only be purchased when it provides additional benefits than the law and the standard commercial guarantee.
Finally, it is important that consumers bear in mind that buying an extended warranty is optional and that they must not be pressured by sellers to buy such guarantees.
When deciding to make such a purchase, it is consumers’ responsibility to make sure that all the terms and conditions of the promised guarantee are provided in writing. Furthermore, if guarantees are not honoured by the responsible traders, consumers can take action by lodging a complaint with the Office for Consumer Affairs.
Odette Vella, Director, Information and Research Directorate