MONEY COMMENT
Extended Warranty? No, Thanks!

By Jane Mack (TMFJane)
September 13, 2004

The other day my cheap and cheerful printer finally gave up the ghost after six years of faithful service. So, yesterday, I went out and bought a new one. It's a sexy silver colour and, not only does it print but it also scans and photocopies as well! Isn't new technology fantastic?

Anyway, as usual, the salesman tried to sell me an extended warranty and, because I was in a really good mood, I decided to spell out to him why I didn't want one.

First of all there's the manufacturer's guarantee which, in this instance, lasts for a year. If my printer breaks down, it'll probably do so within the first year, so I'm covered anyway.

Second, I have rights under the Sale of Goods Act. This covers problems with design, quality and reliability so if something goes wrong with the printer within an unreasonably short period of time, the retailer has to repair it regardless of whether the manufacturer's guarantee has run out or not.

Third, I have accidental damage cover on my home insurance. If my three-year old niece pulls it on to the floor during one of her tantrums, I can get it repaired for free should she break it.

Fourth... well the fourth reason didn't apply but I thought I'd tell him anyway. Several credit-card companies will give you with a free extended warranty on certain household goods purchased using their card. (I was buying the printer for cash which is why this didn't apply).

Fifth, I told him that I thought £17 for something costing less than £70 was a bit excessive. If the printer went wrong and I couldn't fall back on any of the above, I could afford to pay for the repairs myself or go out and buy a new printer - the main reason being because I didn't waste my money on buying extended warranties! (I did tell him all this quite nicely and, to give him his due, he gave me a very sweet smile when I'd finished and then agreed with me).

As it happens, the Government is intending to introduce legislation in time for Christmas forcing retailers to display the cost of the extended warranty next to the price of the item. There will also be a cooling off period for those buying them and people will also have 30 days to come back and purchase a warranty - thus giving them time to shop around for a better product.

I've said it before and I'll say it again - for the most part extended warranties are a waste of money and people would be much better of self-insuring. Save the insurance premiums yourself and you'll invariably find that if one of your myriad electrical goods does break down, you can pay for repairs yourself. It's likely to work out much cheaper in the long run.