Article by our associate solicitor, Kirstiana Ward, published in Oasis magazine

Each time we buy something new, be it a new washing machine, surround sound system or iPhone, we are asked by the sales assistant if we would like to buy an extended warranty.

This is sold to us as paying for “peace of mind” should the product fail after the standard in-store manufacturer’s warranty offer (generally one year) has expired. Often we have just spent thousands of dollars on our new coveted item and another couple of hundred dollars seems reasonable to protect us against potential product failures down the track.

But do you really need the extended warranty?

It is important to understand the difference between warranties to determine whether you should or should not purchase an extended warranty. For example, you may have been promised about the quality, state, condition, performance or characteristics of the goods or services, what they can do and for how long. If you later find that this promise does not hold true, you can assert your rights under a consumer guarantee.

Another type of warranty is the warranty against defects; or manufacturer’s warranty.

This is a promise made to you by the seller that if the goods are defective, the business will repair or replace them or resupply or fix a problem with services. This manufacturer warranty is usually limited by time. It is optional to purchase an extended warranty to lengthen the coverage of the manufacturer’s warranty.

You should take care when purchasing extended warranties to make sure that you are not paying good money for something that is automatically provided by your consumer guarantees under the Australia Consumer Law (ACL).

These consumer guarantees include your rights to a repair, replacement or refund as well as compensation for damages and loss and being able to cancel a faulty service in particular circumstances.

Consumer guarantees are there to protect you. You may be entitled to a repair, replacement or refund, even if any voluntary or extended warranty has expired. Before buying an extended warranty, always ask the supplier to list what it gives you over and above your automatic consumer guarantees.

An remember, if you have a faulty product and you are told that your in-store guarantee has expired, visit the Australian Competition and Consumer Commission to seek further advice or assistance.