Whether consumers are buying a new household appliance, a new electronic gadget or a new car, they usually hope that it lasts a long time and thus gives them good value for money. However, for peace of mind, consumers often consider protecting such purchases by also buying an extended warranty.
The latter is essentially a prolonged protection on the product that gives consumers the right to claim a free remedy from the guarantor in case defects emerge after the standard commercial guarantee expires. For this additional protection, consumers are asked to pay an extra amount of money.
Before incurring this cost, consumers should determine whether the guarantee would really give them additional value and benefits. To establish this, consumers need to assess the real benefits the extended warranty offers.
In the first instance, consumers should be aware that whether or not they buy an extended warranty, they always have their statutory rights. These rights originate from the Consumer Affairs Act, which stipulates that all goods purchased by consumers must match the description and specifications in the contract of sale, must be fit for their intended purpose, and must also be of the quality and deliver performance that are normal in goods of the same type.
If the goods purchased do not meet these criteria, consumers are entitled to claim a free remedy from the seller. In the first instance, consumers may request that the goods are repaired or replaced free of charge.
Consumers may claim a reduction in the price or the termination of the sales contract if neither repair nor replacement are possible solutions, or if opted for, may cause consumers a significant inconvenience. The time-limit for consumers to claim these remedies is two years from date of delivery of the non-conforming product.
Consumers should also bear in mind that most products for sale come with a standard commercial guarantee which usually provides adequate protection. By shopping around and comparing different brands and sellers, consumers may find products that carry standard guarantees that are as beneficial as the extended guarantee they are considering buying.
Consumers may have a similar cover under a home contents insurance policy- Odette Vella
Should consumers decide to buy an extended warranty, it is important that they read the terms and conditions carefully. The fine print on an extended warranty may include exclusions and limitations, and thus may not be as good and advantageous as it looks.
For instance, some warranties may only cover certain types of damages or defects, or they may not cover damage caused by misuse or accidents.
The type of remedies the extended warranty provides should also be given due attention. Does the guarantee offer a new product for the old one, or just repair? If it only provides repairs, consumers should double-check that both labour and parts are included. If labour is not included, consumers are advised to enquire about the applicable rates.
Something else to consider is whether consumers can claim a refund for a damaged product that cannot be repaired or replaced. It is also worth checking if the execution of the guarantee involves any additional costs, such as the cost for transporting the damaged goods or call-out charges.
Any applicable fees must be clearly written in the terms and conditions. If these are not mentioned in the guarantee, they cannot be imposed on consumers after the purchase.
Naturally, the more flexible the extended warranty is, and the more damages it covers, the more consumers would benefit should they decide to purchase such a warranty.
Prior to buying such an extended warranty, consumers should consider its cost, the value of the product it covers and the cost of replacing the item or repairing it outside the guarantee.
Consumers should also be aware that they may not need to buy an extended warranty if they have a similar cover under a home contents insurance policy.
In conclusion, extended warranties can offer additional protection for consumers, but they come at a cost and often also with limitations. Whether or not to purchase an extended warranty is ultimately the consumers’ choice. In other words, sellers cannot oblige consumers to buy an extended warranty.
Furthermore, when such a warranty is purchased, consumers must ensure that any terms and conditions promised to them by sellers are clearly written on the guarantee’s documents. These conditions become legally binding, and if not honoured, consumers may take legal action against the guarantor.
Odette Vella is director, Information and Research Directorate, MCCAA.
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