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SAVING ON WARRANTIES

What is a warranty and when is it a good investment?

A warranty take several forms but essentially is a form of guarantee on mechanical or electrical goods to ensure it is repaired or replaced if it fails to operate within a period of time protection is provided.

You may have this cover INCLUDED as part of new purchase or be offered it as an optional extra at the time of purchase or later during the registration process for the products normal guarantee.

Many warranties are OVER PRICED for the cover they give and can represent a large part of the overall cost of the equipment.

When considering if a warranty is a good buy consider these key issues;

• the value of the equipment
• the cost of the warranty as a % of the equipment
• the risk of a breakdown annually or at all during the warranty term - unlikely - low - very likely - almost certain.
• the costs and implications of NOT having cover.

Think seriously about the sense of taking cover for a low risk "what if" cover and see it being necessary when you see a breakdown as more likely and a warranty available to give a benefit WHEN it breaks down rather than IF.

Once taken out you may be able to renew the term, but more than likely 5 years is the maximum time of cover, the life of of the device may well be not much more than that or could be 20 years or more.

Lets look at a FEW popular reasons for cover;

Refrigerators

Warranties on these goods is generally unrealistic as their working life is long, replacement value low and any breakdowns are likely to be of a low value.

Washing Machines

Hard working, the chances of frequent breakdowns especially as the machine ages is high and the potential costs high. On site repairs are usually part of the deal so a 5 year plan is sensible after which one should consider replacement of the machine.

TV

Modern devices which include a lot of gadgets and features may well be worth cover, traditionally the normal basic TV was reliable and not worth warranty cover. Many TVs now serve as games machines, computers and overall entertainment centres adding to the risk of breakdown under pressure coupled with expensive repairs.

Motor Vehicle

The amount of usage a vehicle gets varies with users from 5,000 to 100,000 miles a year, so the greater the risk the more need there is for warranty cover.

Normally an annual mileage limit restricts or excludes cover so for high mileage vehicles CONTRACT HIRE is preferred which include breakdown and maintenance.

Restrictions and exclusions are many for seemingly low cost warranties and focus on major breakdowns on components (which are rare).

Is is necessary to maintain regular servicing at a garage otherwise protection is invalidated. For DIY servicers this means your cover is useless.

Many policies provide for "fair wear and tear" deduction so if a device fails after 5 years your claim will be adjusted to pay ONLY for the remaining value of the failed part. Thus you may find a 500 claim will only net you 100 under the warranty terms thus negating its value.

Careful study of what is EXCLUDED (rather than included) is vital, the cost of cover, mileage limits and renewal options (and costs). Take your time to decide if cover is necessary, often vehicle buyers are motivated to buy the VEHICLE and are VULNERABLE to buy expensive and low value warranties at the same time.

Vehicle breakdown cover

Similar to a warranty above, and sometimes confused as being the same, this provides for RECOVERY and MINOR ROADSIDE repairs to a vehicle rather than MAJOR REPAIRS which is feature of a WARRANTY.

Often sold as a membership plan it is nevertheless a warranty or insurance to help with breakdowns AND accidents, ensuring a rescue vehicle attends you and repairs the vehicle or recovers it plus passengers to home or an agreed destination.

Vital for anyone travelling regularly on long trips to strange areas. International cover is also available and wise if travelling abroad for a single or regular journeys.

Central Heating Boiler

Heating the house and hot water day by day some form of warranty is always wise and is potentially low cost considering the importance the device especially in high risk homes with children and the elderly.

Cover can extend to include radiators or just the boiler, and an annual inspection. The extra cost if often sensible especially if you have moved into the property recently and are unsure of the equipments age and condition.

Unlike many devices mentioned above this type of cover can be ongoing and give permanent protection against breakdown, although some warranties limit the age of device, or increase costs, or limit cover as parts for older machines cannot always be guaranteed.

Despite the existence of warranty cover for elderly boilers the frequency of breakdowns may make replacement necessary. Most modern boilers are very efficient and the added savings can fund the investment. For the elderly grants may be available for boiler replacement. (WarmFront in the UK)

Please feel free to Contact Us with questions or to give us information to add to our knowledge base.