Purchasing an extended warranty on a product, versus, the Consumer Guarantees Act

 

Let's imagine for a moment you purchase a new couch, like the one pictured with my twin grandsons, separated and beautifully sleeping, I love them so so much!!  They truly are a gorgeous little combination of trouble and trouble, but they keep me young they are so full on, this is truly a small moment of peace and bliss, they are truly perfect!  I digress, apologies for that.......moving right along.

When we spend a lot of money on an appliance or a large item of furniture, even a car, we often get asked if we would like to have an "extended warranty".  The extended warranty can be quite pricey, and can be an additional cost added to whatever finance option you are using to pay for the product and therefore has compounding interest on it as well.  

Let's have a conversation about extended warranty.

Most things we purchase, particularly those with higher price tags, have a warranty of some sort.  I am not talking about the extended one, but maybe a 12 month warranty that you are told about at purchase.  Often we think, nervously, that is not long enough, if we have spent around $50,000 or $5 on something we want it to last longer than a year.  Otherwise why on earth would we buy it?

A few years ago, when things were not lasting after consumers purchased them, the government passed a law: The Consumer Guarantees Act.  While I don't expect you all to be lawyers, there are a few clauses in the Act that are worth memorising:

• "A reasonable period of time"
• "Fit for purpose"

All goods and services purchased in New Zealand are expected to last for "a reasonable period of time" when used in a manner that is "fit for purpose".

If I use the fridge as a sled in the snow, and, surprise surprise, it doesn't last.  It is not expected to be covered by the person I purchased it from.  I didn't use it, in a manner that was "fit for purpose"

However, if I use the fridge as a fridge and just plug it in.  I can reasonably expect it to keep things cold for a "reasonable period of time".  For a fridge that is considered to be 10-15 years!

Therefore, if my fridge was to break down within that period of time, when I was using it in the manner it was intended to be used, so "fit for purpose", the person who sold it to me is expected to replace, repair or refund it.  

If we compare this to the idea of an extended warranty, you would have to ask yourself:  Why? 

What possible reason would you have to purchase an extended warranty?  I would be interested in your feedback on this question.

I personally have tested this a number of times and sure enough, the first reaction of the store is "this product is outside of the warranty period".  However, the moment I mention the Consumer Guarantees Act, they immediately (or their manager) offer to repair, replace or refund.  While you have to give them the opportunity to do any one of the three, it still means your fridge (or whatever you purchased) is covered, even without it being under warranty.

When you start to consider this in other objects that we purchase, including small appliances, such as jugs, toasters, electric razors, hairdryers etc.  We often just throw them away rather than take them back.  It is important that they are returned, not only for our own financial security but also because it is our duty as a consumer, to let them know that it is a substandard product, or has a defect.  If we don't notify them of this then they will continue churning out the same product the same way without knowing.  It is actually our responsibility.

The couch in the picture above with the dear little boys sleeping soundly on it, gosh they truly are just beautiful.... oops sorry, I digressed again.   That couch was a replacement for a lounge suite I purchased new 6 years ago.  It was a leather look suite, black, and the head rests had cracked through the leather, there was some red fabric underneath coming to the fore.  While I had to allow the store to first look for replacement headrests to repair the existing couch, when they couldn't source them, they asked me to select a new suite to replace it with and they sent it out to me.   

The boys like it and so do the rest of the family!

I often see things for sale on different marketplace sites that have been purchased and breakdown soon after, or just out of warranty.  People are literally giving them away rather than go back to the store.  Please, go back to the store.  This even works on clothing and linen.  If you buy a new set of sheets and they start to pill or get too thin within a "reasonable period of time" then contact the place your purchased them from for a replacement or a refund.

I personally, have had a number of things replaced, a large fridge freezer that was 6 years old, the couch above, a tv, an outdoor table - twice, a laptop, even parts of a brand new vehicle that should have lasted longer.  

Have a go, I would be interested in how you get on, but know the law is on your side.  It makes a huge difference to your weekly budget if you have to suddenly buy a new fridge.....shortly after you bought the previous one. 

Have a wonderful afternoon and I hope I can help you out in many ways, feel free to follow and share my blog.  Thanks so much for your support, I really appreciate it.  Keep the comments coming, I love getting them.