Is an extended warranty worth it?
What you may already have for free, when the cover is genuinely worth it, and what to check in the exclusions.
- Difficulty
- beginner
- Time
- 15 min
- Read
- 2 min
- Safety
- caution
Short answer
Usually not, because consumer law already covers faults for years and the premium is priced to be profitable. It can be worth it for accidental damage cover on something expensive and easily broken, which the law does not cover.
Extended warranties are sold at the till because that is where the decision is hardest to think about. The key point is that they overlap heavily with rights you already have and did not pay for.
Safety
Step by step
- Remember you already have rights.Goods must be durable, and a claim can generally be brought for up to six years, or five in Scotland. An extended warranty covering years two and three overlaps substantially with that.
- Check what you already have elsewhere.Home contents insurance often covers accidental damage. Some bank accounts and credit cards include purchase protection. Paying twice for the same cover is common.
- Separate breakdown from accidental damage.Mechanical failure is largely covered by consumer law. Accidental damage — dropping it, spilling on it — is not, and that is where a policy can genuinely add something.
- Read the exclusions before the price.This is where the value is decided. Wear and tear, cosmetic damage, batteries, screens, accessories and consumables are commonly excluded, and the excess may be substantial.
- Compare the premium with the replacement cost.A policy costing a quarter of the item's price, with an excess, on something with a low failure rate, is rarely good value.
- Consider self-insuring.Putting the premium aside instead means you keep it if nothing breaks. Over many purchases this reliably comes out ahead, which is precisely why the policies are profitable.
- Take time rather than deciding at the till.You can usually buy cover later. Pressure at the point of sale is a sales technique, not a deadline.
- Consider it for the specific cases where it fits.Expensive, portable, easily damaged, and you would struggle to replace it — a laptop or phone used heavily and away from home. That is the case where it can make sense.
Tips
- If the salesperson says the manufacturer's warranty is all you otherwise have, that is not correct. Your rights against the retailer are separate and longer.
- Check your home insurance before buying cover for anything in the house. You may already be covered for more than you think.
- The cooling-off period applies to warranties sold at a distance. If you agreed under pressure, you may be able to cancel.
Questions people ask
Are extended warranties a waste of money?
Usually, because consumer law already covers faults for years and the premium is priced to be profitable. Accidental damage cover on an expensive portable item is the main exception.
Does an extended warranty give more than my legal rights?
For accidental damage, yes — that is not covered by consumer law. For mechanical failure, it largely duplicates rights you already have.