Avoid extended warranties

One Thing To Do This Week

You've decided to buy a washing machine and are about to hand over the money when the shop assistant asks if you'd like to take out an extended warranty on it - but is it worth doing so?

Retailers often try to sell extended warranties when you buy electrical home appliances, and they make a staggering £900 million from them each year, according to Which?. But these warranties are overpriced and usually not necessary.

So, how do you know whether you need to buy one of these warranties?

Firstly, would it actually make financial sense? Some warranties can increase the cost of your purchase by 50% or more, while the cost for any repair needed could be considerably less.

You also shouldn't forget the cover that comes automatically with your purchase - most manufacturers guarantee goods for 12 months.

Moreover, while an extended warranty would continue to cover your purchase for a couple of years after the built-in guarantee ends, you still might not need it as the Sale of Goods Act states goods must be of satisfactory quality and fit for purpose, and this can apply for up to six years after the purchase.

Finally, if you do decide to take out an extended warranty, just remember that you don't have to buy it from the shop where you purchased your product. Instead, shop around for the best quote.

There are firms, including insurance companies and the manufacturers themselves, that sell extended warranties that are often cheaper.