Those of you who have made biggish purchase such as a TV, home appliance or automobile may have been offered an extended warranty, which basically covers repair beyond the manufacturers expiration date, usually by a couple of years. This costs an additional fee and although we are protected by the Australian Competition and Consumer Commission (ACCC) for a period of time, a warranty can save you money in certain circumstances.
Home appliances and TV’s for example don’t generally break down until we need a new one, so today we’re going to look at when buying an extended warranty might be a good idea and why it might save you money in the future to help you avoid expensive suprises.
Buying second hand vehicles can be subject to breakdown or wear and tear that you haven’t been responsible for causing. Common changes may include tires, mechanisms on doors or other electronics, powered-steering, air-conditioning etc. If you are lucky this won’t happen to you, but if it does then buying the extended warranty can help you avoid incurring huge bills to repair these problematic issues.
It’s common knowledge that these extended warranty options from car dealers are big profit areas for the business, but they can also save customers hundreds or thousands of dollars if something goes very wrong. A good way to look at it is if you are planning on keeping your vehicle beyond the manufacturers warranty (each manufacturer differs), then the warranties can pay for themselves.
Many of these garden machines work through tough conditions such as the Australian heat, plus they do laborious jobs and can wear down easily. This activity will dull parts quickly and combined with burning combustive fuel which also degrades parts over time can mean within 1-3 years they will need some sort of repair.
If you are thinking that surely repairs won’t be that costly and that you would happily take the hit then it will be useful to know that labour costs and repair parts can in many cases cost 50% or sometimes more than the original purchase price of the machine. Extended warranties range between 15 – 25% of the cost of the machine which is at least a 35% saving if a big issue occurs in a year or twos time. Honda lawn mowers are known to have their self-propelled drive mechanism go after 18-24 months and this can cost in excess of $400 to repair, something your cheaper extended warranty would cover. It’s important to keep a record of all your receipts too when within warranty.
If you plan on completing work on your property then most companies will offer a warranty cover for the length of time you plan to stay there. If you are having a wall rebuilt or extended then your cover will include window protection for example. In this case it can certainly save money by enquiring about available extended or lifetime warranties available. They are usually built into the cost of the products making them slightly more expensive, but if anything goes wrong, it can prevent you having to shell out unplanned amounts of money.
This can also be said for buying a ‘new’ used home. All appliances for example should be up to standard at inspection, but there are numerous costs you have to deal with when moving into a new home, the last thing you need is an appliance to need replacing or repairing, if it could have been covered in an extended warranty.