Extended Warranties – Are They Worth It?

The average extended warranty policy costs £75, and the most expensive charges can add up to 50% of the cost of what you're buying.

Most of the time, extended warranties are a false economy. Most electrical manufacturers claim that their appliances have a design life of seven years. In addition, appliances usually come with a one-year manufacturer's guarantee. This means that if there is a fault, then the manufacturer will repair or replace it in the first 12 months. The length of the guarantee and benefits offered by the manufacturer can vary. Some shops offer a free two-year warranty.

According to Which, formerly the Consumers' Association, it is often cheaper to pay for repairs if and when needed. Your household insurance may also be able to help, so check your policy.

The extended warranty market is worth £900million a year. That so many are sold is because of high-pressure sales tactics in shops. Staff at the big electrical chain stores receive hefty commissions for selling extended warranties and will target customers at the last moment of the sale in the hope they will make a snap decision.

However, in response to mounting pressure from the Office of Fair Trading about the way extended warranties are sold, many stores offer a cooling off period.