Extended warranties not worth the money

This announcement is for: 
  • High number of complaints and enquiries about extended warranties on new cars
  • Similar issues reported on new whitegoods and electronics
  • Shoppers reminded that guarantees under Australian Consumer Law are free

As the busy Christmas shopping period approaches, Consumer Protection is urging Western Australians to avoid buying extended warranties on new products such as cars, whitegoods and electronics.

In the last 12 months, Consumer Protection has received 323 enquiries and 68 complaints about extended warranties, overwhelmingly as they related to the purchase of new motor vehicles.

The main issues involved consumers being unable to seek a satisfactory remedy after a fault developed, or being unaware their particular issue was not covered under the policy. Consumers also encountered similar issues after buying extended warranties on washing machines, dryers, couches, mobile phones and laptops.

Commissioner for Consumer Protection Gary Newcombe urged consumers to carefully weigh up whether purchasing an extended warranty was worthwhile to them.

“Being offered an extended warranty by a salesperson on new cars, whitegoods or electronics may be a familiar scenario to many shoppers, but it could be a waste of your money if you buy one,” Mr Newcombe said.

“This is because the products we buy automatically come with a number of guarantees under our consumer laws, including a requirement that they be of acceptable quality and last a reasonable amount of time, depending on what they are and how much they cost.

“That means if you pay extra for an extended warranty – which is actually a type of insurance policy – you could be paying for repair or replacement rights that are already free under the Australian Consumer Law (ACL).”

Most extended warranties include long lists of exclusions and can require consumers to do certain things for them to remain valid, such as regularly servicing a motor vehicle with the selling dealer. Failure due to wear and tear is another area that may not be covered.

“Next time you’re offered an extended warranty in a shop or car dealership, our key advice is to ask the salesperson what benefits it will provide above your existing entitlements under the ACL,” Mr Newcombe said.

“Retailers or suppliers risk breaching the law if they use unfair tactics or put undue pressure on you to buy an extended warranty, or mislead you into paying for the rights you already have under the law.”

More information about extended warranties, including possible questions to ask a salesperson, is available on the Consumer Protection website.

Complaints can be lodged on the Consumer Protection website, or enquiries made via email to consumer@dmirs.wa.gov.au or call 1300 30 40 54.


Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / alan.hynd@dmirs.wa.gov.au  

Consumer Protection
Media release
01 Nov 2022

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