ARTICLES > Extended Warranties; Are They Worth It?
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Extended Warranties; Are They Worth It?
It's a question our enspire mentors get asked often; “Should I have taken the Extended Warranty on my new appliance?” The simple answer is, “no.” WThe Consumer Guarantee's Act protects us: In New Zealand we have The Consumer Guarantee's Act. The Act is designed to protect consumers against goods that are faulty or develop faults prematurely. Amongst other things the Act says that goods sold must be; A practical example from my experience:
Some time ago our family purchased a washing machine which came with a 12 month manufacturer's warranty. After about 18 months it broke down. I contacted the store to let them know. They said, “Bad luck. It's out of warranty. You should have signed up for the Extended Warranty.”
My response was, “Not so. It may be out of the manufacturer's warranty but, the Consumer Guarantee's Act says the machine must be of acceptable quality. I'd expect such a machine, if treated well, to last a lot longer than 18 months. Therefore, I would like it fixed.” The store reluctantly contacted the manufacturer, who was aware of their obligations under the Act and the machine was repaired.
Our Conclusion: So, in terms of personal finance, if you want to save money, don't bother with Extended Warranties. Thanks to The Consumer Guarantee's Act, you're almost always covered already.
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