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Is an extended warranty worth buying?

36 quoted answers, each with its source

The short answer

Consumer guarantees under the Australian Consumer Law apply automatically and exist despite anything a supplier or manufacturer says or does; after a warranty against defects expires, the guarantee of acceptable quality usually still applies, and a consumer can insist a supplier meet a consumer guarantee even where additional warranties cover the goods. Extended warranties are optional and usually sold separately for an extra cost; they may or may not give any extra rights beyond the automatic consumer guarantees, and regulators state that offering one that merely mirrors or is less than the guarantees can mislead consumers. CHOICE reports that many extended warranties offer no more than the free ACL rights and that 72% of surveyed claims were made when the product was under two years old; a court has imposed a $200,000 civil penalty on each of Fisher & Paykel Customer Services and Domestic & General for misleading extended warranty offers. What the claims do not establish is whether a particular extended warranty offers benefits beyond those automatic guarantees; from 9 June 2019 a separate mandatory warranty text applies to services supplied after that date.

Every part of this comes from the quotes below. How we write these.

What the rules actually say17

Quoted straight from the ACCC, the Australian Consumer Law or a state consumer regulator.

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The ACCC states that…

  • an extended warranty extends the length of a manufacturer's warranty.
  • a care package extends the length of a manufacturer's warranty.
first-party
1 quote from 1 source
An extended warranty or care package extends the length of a manufacturer’s warranty.
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The ACCC states that extended warranties are unlike manufacturer's warranties, which are included in the sale.

first-party
1 quote from 1 source
Unlike manufacturer’s warranties, which are included in the sale of the product or service, extended warranties are usually sold separately for an extra cost.
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The ACCC states that an extended warranty may or may not give a consumer any rights beyond the automatic consumer guarantees.

first-party
1 quote from 1 source
An extended warranty may or may not give a consumer any extra rights in addition to their automatic consumer guarantees rights under consumer law.
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The ACCC states that businesses must not mislead consumers into paying for rights in an extended warranty that consumers already have automatically under the consumer guarantees.

first-party
1 quote from 1 source
mislead consumers into paying for rights in an extended warranty that they already have automatically under the consumer guarantees.
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The ACCC states that after a warranty against defects expires the consumer guarantee of acceptable quality usually still applies.

first-party
1 quote from 1 source
Warranties against defects usually apply for a set amount of time. After the warranty expires, the consumer guarantee of acceptable quality usually still applies.
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The ACCC states that businesses must not mislead consumers into thinking their rights are limited to the remedies or timeframe set out in a warranty against defects.

first-party
1 quote from 1 source
Businesses must not mislead consumers into thinking that their rights are limited to the remedies or timeframe set out in a warranty against defects.
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The ACCC states that a manufacturer's warranty on a parallel import may not apply in Australia.

medium confidencefirst-party
2 quotes from 1 source
However, if the product comes with a manufacturer’s
warranty, the warranty may not apply in Australia. Check the terms and conditions of the warranty to see whether parallel imports are covered.
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The ACCC states that manufacturers and their local authorised sellers do not have to honour warranties for parallel imports if the terms of the warranty exclude them.

first-party
1 quote from 1 source
Manufacturers and their local authorised sellers do not have to honour warranties or provide support or spare parts under warranties for parallel imports, if the terms of the warranty exclude them.
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Consumer Affairs Victoria states that…

  • extended warranties are optional.
  • the consumer guarantees give rights that exist regardless of what a supplier or manufacturer says or does.
first-party
1 quote from 1 source
The consumer guarantees provide rights that exist despite anything the supplier or manufacturer may say or do. Extended warranties are optional.
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Consumer Affairs Victoria states that consumers should check an extended warranty provides benefits greater than they already have under the Australian Consumer Law before agreeing to pay for it.

first-party
1 quote from 1 source
Before agreeing to pay for an extended warranty, consumers should check that it provides benefits greater than they already have under the ACL.
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Consumer Affairs Victoria states that implying only an extended warranty will cover problems with a product may amount to misleading a consumer about their rights.

first-party
1 quote from 1 source
Suppliers also need to be careful not to imply that only an extended warranty will cover problems with a product. Doing so may amount to misleading a consumer about their rights.
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Consumer Affairs Victoria states that a consumer can insist a supplier meets a consumer guarantee even where the goods are covered by additional warranties.

first-party
1 quote from 1 source
A consumer can also insist a supplier meets a consumer guarantee, even if the goods are covered by additional warranties.
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The ACCC states that a business selling an extended warranty that offers less than or merely mirrors the consumer guarantees risks misleading consumers into thinking they are receiving additional benefits.

medium confidencefirst-party
1 quote from 1 source
Businesses that sell extended warranties which offer anything less than or simply mirrors what a consumer is entitled to under the consumer guarantees, could risk misleading consumers into thinking they are receiving additional benefits when they are not.
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The ACCC states that the claim that an extended warranty provides extra protection a consumer would not otherwise have is not necessarily true.

medium confidencefirst-party
1 quote from 1 source
Some suppliers or manufacturers also tell the consumer an extended warranty provides extra protection, which the consumer would not have unless they buy it. This is not necessarily true.
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A court imposed a civil penalty of $200,000 on Domestic & General Services Ltd over false or misleading representations made while offering an extended warranty.

medium confidencefirst-party
2 quotes from 1 source
that both Fisher & Paykel Customer Services Pty Ltd and Domestic & General Services Ltd made false or misleading representation in the course of offering an extended warranty to consumers, and imposed a civil penalty of $200,000 on each business.
The Court held that the letters contained a false or misleading representation to consumers

Measured finding5

Something someone actually measured, with the method attached.

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CHOICE reports that in its survey of appliance and electronics shoppers, Harvey Norman was the outlet most likely to try to sell customers an extended warranty.

1 quote from 1 source
Harvey Norman scored third-lowest on value for money and was also the outlet most likely to try to sell customers an extended warranty
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CHOICE states that its research found that 7 out of 10 Australians wrongly believe that purchasing an extended warranty gives them extra protections beyond their rights under the Australian Consumer Law.

1 quote from 1 source
New research from CHOICE has revealed 7 out of 10 Australians wrongly believe purchasing an extended warranty gives them extra protections beyond their rights under the Australian Consumer Law (ACL).
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CHOICE states that its nationally representative survey found that almost a third of Australians, 32%, had bought an extended warranty in the past two years.

2 quotes from 1 source
The nationally representative survey also found:
Almost a third (32%) of Australians have bought an extended warranty in the past two years.
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CHOICE states that its survey found that of people who purchased an extended warranty in-store, only 12% reported hearing about how it differs from the Australian Consumer Law.

1 quote from 1 source
For people who purchased an extended warranty in-store, only 12% reported hearing about how it differs from the ACL.
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CHOICE states that its research found 72% of respondents who claimed an extended warranty did so when the product was less than two years old.

1 quote from 1 source
“Our research also found 72% of respondents who claimed an extended warranty did so when the product was less than two years old, which shows businesses are selling people rights they already have for free under the ACL,” says Veyret.

Practical effect4

What is observed to happen in practice, as distinct from what is documented.

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The ACCC states that extended warranties are usually sold separately for an extra cost.

first-party
1 quote from 1 source
Unlike manufacturer’s warranties, which are included in the sale of the product or service, extended warranties are usually sold separately for an extra cost.
#

A court imposed a civil penalty of $200,000 on Fisher & Paykel Customer Services Pty Ltd over false or misleading representations made while offering an extended warranty.

medium confidencefirst-party
2 quotes from 1 source
that both Fisher & Paykel Customer Services Pty Ltd and Domestic & General Services Ltd made false or misleading representation in the course of offering an extended warranty to consumers, and imposed a civil penalty of $200,000 on each business.
The Court held that the letters contained a false or misleading representation to consumers
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CHOICE states that it has previously found many extended warranties offer no more rights than those already available for free under the Australian Consumer Law.

1 quote from 1 source
Such observations come after CHOICE previously found many extended warranties offer no more rights than those you already get for free under Australian Consumer Law.
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CHOICE states that its survey found seven in ten respondents thought they would not be able to receive a refund, repair or replacement for a faulty product once the manufacturer's warranty expires.

1 quote from 1 source
Seven in 10 (70%) thought they wouldn’t be able to receive a refund, repair or replacement for a faulty product once the manufacturer’s warranty expires.

Changed on1

A dated change. This is where advice quietly stops being true.

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A separate form of mandatory warranty text applies to services supplied after 9 June 2019.

medium confidencefirst-party
1 quote from 1 source
The mandatory text for the supply of services after 9 June 2019 is:

Disputed between sources1

Sources that do not agree, presented without picking a winner.

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CHOICE states that in most cases extended warranties are not worth purchasing.

medium confidenceother
2 quotes from 2 sources
“In most cases, extended warranties aren’t worth purchasing. If your product becomes faulty or does not work, you will likely be covered for a repair, replacement or refund under the ACL,” says CHOICE Head of Policy and Government Relations, Patrick Veyret.
Gold Service Extras takes the stress out of dealing with faulty products. From the moment you get your new product home, Gold Service Extras provides certainty and support through a range of benefits and inclusions ensuring you are back up and running with a working product in no time.

Often said, but we could not find it in the rules8

Lots of people say this. We went looking for an official source that backs it up and could not find one, so treat it as something people repeat rather than something settled.

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  • The ACCC reproduces a statement from letters sent to consumers who had purchased a Fisher & Paykel appliance, inviting those consumers to buy an extended warranty.
  • The statement that invited consumers who had purchased a Fisher & Paykel appliance to buy an extended warranty told those consumers that the appliance would not be protected against repair costs after the 12 months remaining.
medium confidencefirst-party
2 quotes from 1 source
Both companies sent letters to consumers who had purchased a Fisher & Paykel appliance inviting them to purchase an extended warranty. The letters contained statements such as
a year old, which means that you have 12 months remaining—after that your appliance won’t be protected against repair costs.
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The Good Guys states that…

  • a faulty product valued at $500 or less will be replaced.
  • the replacement of a faulty product valued at $500 or less is so the customer does not have to wait for it to be repaired.
other
1 quote from 1 source
A faulty product valued at $500 or less will be replaced so you don’t have to wait for it to be repaired.
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The Good Guys states that a product repair taking longer than 20 business days from when it inspects or receives the product makes the customer eligible to have it replaced with an equivalent product.

other
1 quote from 1 source
If your product repair takes longer than 20 business days from when we inspect or receive it, you’ll be eligible to have it replaced with an equivalent product.
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The Good Guys states that an enrolled product requiring more than two repairs during the life of the plan will be offered an equivalent replacement at the customer's request.

other
1 quote from 1 source
If your enrolled product requires more than two repairs during the life of your plan, we will offer you an equivalent replacement at your request.
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The Good Guys states that a customer who does not purchase Gold Service Extras may still have rights under the Australian Consumer Law to a free remedy after the manufacturer's warranty and its own minimum voluntary warranty expire.

other
1 quote from 1 source
Even if you do not purchase Gold Service Extras, you may also have rights under the Australian Consumer Law to a free remedy (even after expiry of the manufacturer’s warranty and The Good Guys’ Minimum Voluntary Warranty).
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The Good Guys states that Gold Service Extras must be purchased at the same time as the product it covers.

other
1 quote from 1 source
Gold Service Extras must be purchased at the same time as you purchase your product.