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Free Warranties Don't pay for extended warranties, get 'em free

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Many shops try to scare customers into buying costly warranties for all electrical and white goods - most are a complete waste of money.

Yet if you want peace of mind, there are tricks to get free cover or multiple-item policies for as little as £10/month. This step-by-step guide will help you decide whether to get a warranty, the cheapest deals if you do, and how to maximise protection without one.

Extended warranty need-to-knows

Before you jump in at the deep end and sign up for an extended warranty, consider these need-to-knows.

1Warranties sold in shops are often massively over-priced

Many shops will try to flog a warranty on virtually everything - even if the goods only cost a few quid. Read more

2Free extra year's warranty available on some credit cards

A number of credit cards give you a free extra year's warranty if you use them to buy electrical or white goods on them. Read more

3 You have consumer rights without warranties

Under UK consumer law, goods are faulty if they're not of satisfactory quality or fit to do the job intended. Read more

4Your home insurance might cover you

Some home insurance policies will cover electrical items and white goods from theft and damage, though breakdown is less likely. Read more

5You can use warranties as a haggling chip

Sales staff often have targets on the number of warranties they must sell on a weekly, monthly or quarterly basis. Read more

What are warranties?

A warranty is an insurance policy that lasts one to five years after you've bought an appliance, which covers you against the cost of repairs and replacements.

While the concept is good, the problem is they can cost as much as the product itself and account for a large proportion of retailers' profits and salespeoples' commission.

Worse still, some warranties used to advertise rights that were already yours by law; though the Consumer Protection from Unfair Trading Regulations 2008 now prohibit this.

What do they cover?

Warranties usually cover your appliance for mechanical or electrical failure, not accidental damage. You should get a repair including parts and labour or, if it can't be repaired, a replacement (though you may have to pay towards this).

It won't pay out for theft, or damage caused by sun, sea water or other natural elements. Stand-alone warranties won't pay out if you're still covered by a manfacturer's guarantee so there's little point in having both.

Different warranty types

Retailers pushing expensive warranties have dragged the product's name through the mud.

Worse, in recent years some have changed from being insurance policies to service agreements and the Financial Conduct Authority doesn't regulate these providers in the same way. More on protection below.

Yet they're not the only ones offering warranties, there are others out there that may be far cheaper. There are three main different ways you can cover products:

Manfacturers' guarantees

Direct insurance for products

Multi-appliance warranties

Do you need a warranty?

Before you consider a warranty, it's worth understanding your rights and checking if you're already covered.

Is there a manufacturer's guarantee?

Most appliances come with a 12-month manufacturer's guarantee. Problems within that time will get you a repair or replacement but it's unlikely to cover you for accidental damage. Make sure you register your appliance or you risk invalidating the guarantee.

If you're wondering about the difference between a guarantee and warranty...

  • A guarantee... is usually a free promise by the manufacturer or retailer to fix or replace the problem.
  • A warranty... is a similar promise, but in this case it's paid-for by an insurance policy.

You have strong statutory rights anyway

When you buy anything, you will be protected by the Sale of Goods Act 1979. It says goods should be of satisfactory quality, fit to do the job intended and last a reasonable length of time.

Where goods are faulty, take them back within six months and this law means the shop has to prove they WERE NOT faulty when you bought them.

Even after that you still have strong rights for six years, but from then on you must prove the goods WERE faulty when you bought them. So at the very worst, if you buy, take it home and it doesn't work, take it back and you are entitled to a full repair, replacement or at least a percentage towards the cost of a replacement..

What is a 'reasonable' length of time?
The law also states things should last a reasonable length of time. This is a deliberately vague description, where the answer depends on common sense judgement...

Most would say it's reasonable for a £1,000 plasma TV to last 18 months, but not for a 50p plastic torch.

In a way this means if legitimate wear and tear breaks the product, the likelihood is you have no claim. Yet if it was an unreasonable fault, you do; however the burden of proof here is on the consumer...

The problem with your rights, especially with goods you believe should last longer, is stores often won't agree. If that happens your only recourse is to take them to court - see the full Consumer Rights guide for more on this, and the Sale of Goods Act.

Does your home insurance cover it?

Does the shop give a free warranty?

Free Section 75 protection on credit cards

Could you repair it yourself?

Can you 'self-insure' it?

BEST BUYS: The cheapest warranties

If you want a warranty, free ones via credit card perks are the cheapest way to get them.

A poor second is via specialist standalone providers. Here, the cheapest depends on what the appliance is, how much it's worth and how old it is. Usually, standalone warranties won't cover goods over eight years old.

It's always important to check the cover is appropriate for you first. And remember most policies won't pay out within the first 30 days.

Best for: Multiple products

Warranty Direct

WarrantyDirect*One of the biggest Providers of extended warranties

Warranty Direct is one of the biggest providers of this type, and is often cheapest for multiple appliance warranties, especially if you've fairly high-value products to cover.

The Warranty Direct* plan costs from £12.75/month for three appliances, such as your cooker, washing machine and TV and offers cover against mechanical, electrical or electronic breakdown only. Accidental damage is not included, even for another appliance.

The plan covers all items up to £2,000, but there's also an annual claim cap of £2,000. So if you claim once for a TV worth £2,000, you won't be able to claim again that year.

Quick facts
  • Price: From £12.75/month.
  • FCA-regulated? Yes - full details on safety.
  • Covered for theft? No.
  • Annual claim cap: £2,000.
  • Includes parts? Yes.
  • Excess? £20.
  • Max age of appliance: Eight years for multi-appliance policies.
Warranty Shop

Warranty Shop Offers three different levels of cover

Warranty Shop offers three levels of cover. Bronze is the lowest and costs £9.99/mth. It covers up to £1,000 worth of products. Silver is £15.99/mth for up to £3,000 of items, and Gold £19.99/mth for up to £5,000.

There's no limit on the number of items you can cover under one policy, so you can cover your things such as your cooker, washing machine and TV all at the same time, though you're limited by an annual claim cap which depends on your level of cover.

Quick facts
  • Price: From £10/month.
  • FCA-regulated? Yes - full details on safety.
  • Covered for theft? No.
  • Annual claim cap: Up to £5,000.
  • Includes parts? Yes.
  • Excess? £20-£60 depending on the age of the product.
  • Max age of appliance: Eight years for multi-appliance policies.

Best for: Single products

No single warranties are that cheap. If you do want one, check out the following...

Warranty Care

Warranty Shop Offers single policy cover

Warranty Shop also offers cover for single products for £5.99/mth, with a maximum item value of £3,000. It has an excess of £30 (or £50 if the product is more than five years old), but could still come out on top for more expensive items.

Quick facts
  • Price: £5.99/mth.
  • FCA-regulated? Yes - full details on safety.
  • Covered for theft? No.
  • Limit per item, per claim: £300.
  • Includes parts? Yes.
  • Excess? £30 to £50.
  • Max age of appliance: Eight years for multi-appliance policies.
Compare extended warranties

Compare Extended Warranties Comparison tool compares high street warranties

Compare Extended Warranties is a new tool to help consumers compare the price of warranties across a range of household items. It's run by providers under an agreement with the Office of Fair Trading.

It means you don't need to opt for the warranty you're offered in-store as you can search for the best alternative deal. You don't need to buy the product and the warranty from the same place, though some won't cover products bought elsewhere. Currys/PC World don't allow you to buy the warranty separately, but Domestic & General does.

This comparison site often comes out best for single products, and for multiple products with low values, so check for the items you want to cover and see whether you can beat the multiple item policies above.

Be very careful when using this site as it can be confusing in the way it lists policies. For some policies listed you pay monthly, but others are priced for three or five years. Check that the price - and the cover - are suitable for your needs.

How do I buy the warranty? You can't click through from the comparison site to the provider, so you'll have to visit the warranty provider separately. Usually, you'll then need to call or visit a store as only a couple of providers allow you to buy online.

Extended warranty providers listed:

Currys/PC World, Argos, Richer Sounds, Domestic & General, Warranty Direct, Tesco.

John Lewis/Marks & Spencer These stores include a warranty in the price

John LewisJohn Lewis has been left off the comparison site, but offers a good alternative. It typically offers a five-year guarantee on TVs, three years on its own-brand appliances, and now a minimum of two years on all other electrical goods at no extra cost. It also price matches, so if you find the product cheaper elsewhere, it'll match it.

M&S warrantyMarks & Spencer also offers two years guarantee on appliances. Make sure they're the cheapest place before choosing to buy as you could find the products cheaper elsewhere.

Best for: Free-but you need to take out a credit card

Always set up a direct debit to repay IN FULL each month, so there's no interest

Ulster Bank

Ulster Gold Mastercard
Free 12 month extended warranty

Ulster Gold Mastercard (16.9% representative APR) gives an extra year's cover after the manufacturer's one or two year guarantee expires. You can register up to six appliances per year.

However, Ulster Bank's announced it's stopping the purchase protection benefit from 15 September 2014.

To qualify for cover, registrations must be made within 90 days of purchase and appliances must cost between £75 and £2,000 to qualify.

Always check the insurance policy for exclusions before relying on it.

Quick facts
  • What does it cover? Six appliances per calendar year for one year's extended warranty. Appliances costing between £75 and £2,000.
  • Accidental damage? Yes.
  • Theft? No.
  • What does it NOT cover? Call out costs if no fault found, delivery of parts.
  • Registration? You must register with 90 days of purchase.

Nationwide FlexPlus offers a good one-year alternative for £10/mth

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The warranties warning checklist

The small print varies between policies, so make sure you check the following before parting with any cash.

Is your policy protected if the provider goes bust?

Is accidental damage or theft included?

When does the policy start?

Do you have to pay for extras?

Is it 'old for new' replacement for unrepairable goods?

Can you extend the warranty beyond its original life?

Do you get full cover for the entire duration of the policy?

Is there an annual claim limit on multiple warranties?

Is it a cashback policy? If so, avoid like the plague

What's the cancellation policy?

Can you extend the warranty beyond its original life?

What if the warranty doesn't pay up?

Warranties are legally binding - so if the retailer or provider doesn't do what it should, you have legal recourse. Hopefully it will never get to this, but it's worth being aware of your rights if there's a problem.

Step 1: Complain to the policy provider

Escalate the complaint as far as you can with the policy provider. Include all the details of previous communications. Quote the clause in your warranty that you want to claim under to help your case.

Step 2: FCA-regulated? Complain to the free Ombudsman

Specialist providers of warranties are usually regulated by the Financial Conduct Authority. So if you encounter any problems claiming, you can go to the Financial Ombudsman, the independent arbiter of financial disputes.

The most important thing to remember is that with any FCA-regulated company you have a right to be "treated fairly" - which of course is a very wide statement. So if you think your complaint hasn't been treated fairly, you can refer it to the free Financial Ombudsman.

Hopefully, just threatening the policy provider with this should be enough in the first place. If not, then fill in the Ombudsman's form and submit your complaint. Read the Your Financial Rights guide for full details of how to do it.

Policies you get direct from manufacturers or retailers (these tend to be free) are usually service agreements meaning they're not regulated by the Financial Conduct Authority. In which case you'll have to skip to step 3.

Step 3: Consider the small claims court

As a very last resort, you could consider going to the small claims court. There's a fee from £25 to £210 depending on how much you're claiming, but it's refunded with successful claims. For full info, see the Small Claims Court guide.

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