Take Care When Buying An Extended Warranty

Take Care When Buying An Extended Warranty This Christmas

Hon Heather Roy, Minister of Consumer Affairs
Friday, December 18 2009

With Christmas fast approaching New Zealanders should be aware of their rights under the Consumer Guarantees Act (CGA) before making purchasing decisions or buying an extended warranty, Minister of Consumer Affairs Heather Roy said today.

"The National Consumer Survey 2009, commissioned by the Ministry of Consumer Affairs and released in November, showed good public understanding of consumer rights overall but highlighted some knowledge gaps around the CGA," Mrs Roy said.

"In particular, many consumers thought that extended warranties offered more protection when buying goods than the current law does. This is often not the case.

"Under the CGA consumers should be able to expect goods that are durable and fit for purpose. This includes a requirement that they will last a reasonable length of time. Consumers have the right to have faulty goods repaired, replaced or refunded. This means an extended warranty in general offers no additional protection to that provided by the CGA.

"However, there are exceptions: auctions and competitive tenders are not covered by the CGA, and consumers buying goods for a business purpose may want to consider an extended warranty as the CGA may not apply.

"Before buying an extended warranty consumers should carefully read the terms and conditions. For example: US research has shown that, in most cases, electrical goods do not fail within a warranty period. This means claims under extended warranties are not common.

"This is the busiest shopping time of the year. Consumers should be aware of their rights and responsibilities under the law - that way they will be equipped to make good purchasing decisions and will not spend more money than they need to this Christmas," Mrs Roy said.

The National Consumer Survey 2009 is available at www.consumeraffairs.govt.nz/consumersurvey-2009.pdf

ENDS