We take another look at the question of whether or not you should bother with "extended warranties".
My dad always joked that the first thing to throw away when you buy something is the instructions. This may or may not be wise, depending on whether you’ve just bought an Ikea shelving unit or a thumb drive.
But one thing you should never throw away is the receipt because you just might need it again if something goes wrong. The warranty card is useful to keep, but consumers are covered regardless of whether they have this card or not. An extended warranty, however, is offered by the supplier or manufacturer and comes at a cost and has its own terms and conditions.
In considering whether it’s worth paying for additional warranty cover, remember that the new national consumer laws provide a consumer guarantee and you are covered regardless of any warranty provided by the supplier or manufacturer, and this includes an extended warranty.
If you are told that an extended warranty provides extra protection, which would not be offered unless you buy it, this is not necessarily true. The consumer guarantees provide rights that exist despite anything the supplier or manufacturer may say or do. You don’t need to pay for any rights equivalent to a consumer guarantee.
For example, the one-year warranty is a manufacturers warranty and an extended warranty may provide a refund or repair for an additional year or two. But the consumer guarantee by law provides refund, replace or repair cover for a reasonable length of time depending on the price and quality of the item; but many consumers are unclear about this important point.
Proof of purchase such as a tax invoice or receipt is usually needed and most people already understand that this is the case. But what about packaging? According to the ACCC, a refund cannot be refused with the original packaging or wrapping isn’t supplied if the goods are returned because of a problem.
Once you tell the supplier that the goods are being returned, they become the property of the supplier. The cost of returning items may be borne by the consumer, although it’s worth noting that some Australian-based online retailers will offer a free reply paid address for returns. However, the consumer law specifies that if the cost of returning, removing or transporting is costly, the supplier must collect the goods at their own expense within a reasonable time.
Do you pay extra for extended warranties? Why or why not?