Know your consumer rights
Do you need an extended warranty?
We take a look at whether extended warranties are really worth paying extra for.
Peace of mind at a higher price
Businesses sometimes try to sell you an extended warranty, claiming they’ll give you extra protection or peace of mind. So are they worth buying?
In most cases, probably not.
That’s because your purchase is already protected under Australian law.
The Australian Consumer Law provides you with consumer guarantees that the products you buy will do what you reasonably expect them to do.
Warranties are separate from the consumer guarantees, which may still apply even if the warranty has expired.
If you’re still thinking about buying an extended warranty, here are a few things to keep in mind:
Questions to ask before buying an extended warranty
- How much will it cost? Assess the cost of the extended warranty in relation to your purchase. If you bought a $20 rice cooker and the extended warranty costs $20, then you’re probably better off bypassing the extended warranty.
- Will I have to pay extra? See if you have to pay any excess fees if you make a claim and are there any limits on the amount of claims you can make.
- Is it the retailer or a third party who’s offering the extended warranty? In some cases, it may seem that the retailer is providing the warranty but there’s actually a third party providing the insurance. This is one to avoid because a third party may not have the same responsibility as the manufacturer or retailer.
- When does the extended warranty start? A retailer may sell you an extended warranty allowing you a replacement or refund for minor problems and not tell you that you’re unable to receive a replacement or refund until the manufacturer’s warranty ends. A year later, the item you bought has a minor problem and you want a replacement. Instead, the retailer offers to fix the item because it’s a minor problem. You believe that the extended warranty allows you a replacement, and you’re right. But the problem is the extended warranty hasn’t begun and doesn’t allow for a replacement.
- What does the extended warranty cover? Look into whether labour and parts are covered. Also, are there any restrictions as to which repairer you can use?
What can’t a business do if they’re trying to sell you an extended warranty?
- use excessive pressure in trying to convince you to buy an extended warranty
- mislead you by asking you pay for the same rights you already have under the consumer guarantees.
If you feel like you are being pressured into purchasing an extended warranty, or the retailer misrepresents your rights by telling you that you need one, you can report the incident to the ACCC (Australian Competition and Consumer Commission). The ACCC can take action against businesses that mislead or deceive you about your rights.