An extended warranty is an additional warranty that some retailers try and sell you which provides repair and maintenance for a specified period. It may or may not extend the manufacturer’s warranty. Before purchasing an extended warranty, you should carefully check the warranty brochure or document so you are clear what it is offering you.

You should check what parts or labour the warranty covers and whether the product needs regular maintenance or servicing for the warranty to apply. Some extended warranties may only replace the product or refund customers based on annual depreciation of the product. This means the product you get as a replacement may be inferior to the one you originally bought or you may be refunded less money than you originally paid. Check if an annual depreciation applies to the extended warranty before you buy it.

Some extended warranties start from the date you buy the item and not when the manufacturer’s warranty ends. You should read the terms and conditions of the extended warranty brochure carefully and assess whether it is worth the extra money before you buy it. If you don’t meet the extended warranty conditions you may not be able to claim on the warranty or it may be cancelled.

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Here is a series of questions to help you decide whether the extended warranty you are considering buying is worth the extra money. Check these facts in the extended warranty brochure which you can get from the retailer and take it home with you to consider.

Warranty provider

• Who is providing the extended warranty?
  • a manufacturer
  • an insurance company
  • a retailer.

Period

• What is the period of the extended warranty?
• When does the extended warranty start?
  • from the date of purchase
  • after the voluntary or manufacturer’s warranty expires.

Terms and conditions

• Are there any special requirements you need to follow for the extended warranty to be valid? For example, are there requirements for regular maintenance or servicing?
• What does the extended warranty cover? For example, does it cover labour and parts?
• What are the exclusions or restrictions? Typical exclusions may be transport or freight costs.
• Does annual depreciation apply to the product if you replace or refund?

Claims

• Are there any claim limits?
• Are there excess fees for each claim you make?
• Where and how do you lodge a claim? You may be restricted to a particular repairer and number of claims you can make.

Product

• What is the life expectancy of the product?
• Is the product expensive?
• Is it likely to break during the period of the extended warranty?

General

• How much does the extended warranty cost in relation to the cost of the product?
• Are you planning to move? This may cause problems if you are required to take the product to a particular location for servicing.
• Is the extended warranty worth the extra money? Consider whether the statutory and the voluntary warranties will provide sufficient protection.

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