Due to the Consumer rights act 2015, companies selling large domestic goods are expected to produce items of a “satisfactory quality” and to “last a reasonable amount of time”. Because of this, most customers find they never claim with the manufacturer warranty, as it’s at the peak of its performance. The deterioration of such appliances is expected to start happening after a year of purchase. Companies offering extended warranties know this fact and is why they offer you one year manufactures warranty as standard. They are relying on the new appliance lasting up to 2 years without you having to make a claim, and they will not have to pay out for any form of repairs. Meaning you will be paying for a product offering you no financial gain but making the company plenty of money. This is also why you will see that companies that provide extended warranties will always factor in the age of the appliance and won’t cover ‘high risk’ appliance, as the older an appliance is, the more likely it is to breakdown.
On the other hand, what do you do when an appliance does break down after the one year manufactures warranty? You decided against extending the warranty, and if you don’t have a form of Domestic Appliance Cover for your white goods, you’re not covered at all. Your household contents insurance won’t cover you for breakdowns. Now you’re left with the decision to either pay for a new appliance or looking into getting the item repaired; with the possibility of increased costs from the call-out fees, parts and labour for just one item to be restored. So it can be tempting to extend the warranty for your own peace of mind for the future.