The New Fridge

I bought a new fridge freezer last week. I concede that buying a new fridge, or washing machine, dishwasher or tumble drier is pretty mundane but with my track record in this field there is ample scope for drama and mistakes. Last year for instance, I bought a new vacuum cleaner which has proved to be less than ideal. Because of my past experiences it is often some time between a piece of equipment going wrong and a replacement being bought while I try and weigh up the pros and cons of various appliances (and still occasionally get it wrong), but with the old fridge going doolally (temperatures in the fridge swung wildly from the optimum five degrees centigrade to the alarming fifteen degrees, with similar unexpected variances in the freezer temperatures), a repair or replacement was called for pretty sharpish because being without a fridge is beyond inconvenient.

A fridge. Exciting isn't it?

As the old fridge was seventeen years old the maker’s guarantee and the extended warranty had long expired and I was quoted a minimum of £140 repair charge by the manufacturer, so buying a new fridge freezer was a more attractive proposition. It is remarkable that prices of white goods, televisions and other electrical appliances have actually fallen over the years. The old fridge, purchased in 1996, cost £599.99 but a visit to Currys established that a virtually identical new model could be had for £329.99 and looking back there are other examples of similar price drops. For instance, the first VCR that I bought cost about £350 in 1990; the last one I bought before they became redundant cost fifty quid.

One of the things that I find tiresome about buying new appliances is the inevitable question from the salesman which is “Would you like to take out the extended warranty?” At one time this was something that I had some difficulty in refusing, but in recent years my attitude towards these warranties has hardened and I refuse to countenance them. On one memorable occasion, when buying a new camera, the salesman’s persistence in trying to sell me a warranty was such that I told him that if he mentioned it one more time I would walk out of the shop and not buy the camera. He mentioned it again, so I left and bought the camera elsewhere. Refreshingly, the salesman made only a passing reference to an extended warranty for the fridge and was not at all disconcerted when I declined to purchase one.

The problems with extended warranties are twofold.  Firstly, even though there is a manufacturer’s one year guarantee thrown in automatically, the warranty kicks in immediately, so even though you pay for three, or five years you only actually get two (or four) year’s additional cover. Also these days domestic appliances like washing machines have a pretty long life span; five years is the minimum you would expect one to last, so the probability is that you will pay a fair sum of money, never make a claim and then have to pay to replace or repair the machine anyway, long after the warranty’s expiration.

Secondly there is the cost. Seduced by the prospect of paying say £7 a month for a warranty on our new fridge, dishwasher or whatever, we may feel that this is a small price to pay for peace of mind, but when you consider the number of appliances that most people own on which they may be paying that sort of amount, it soon adds up to a pretty penny. For instance the extended warranty on the old fridge cost me £166 for which I received absolutely no benefit whatever. Looking around my house I find that there are at least seven appliances for which I could in theory have extended warranties. The total cost of replacing those appliances is about £1,800 (based on like for like replacements, not upgrades). The annual cost of extended warranties for these would be in the region of £450 (or £1,350 over three years). For that sort of money I could replace five or maybe even six of the said appliances. Far better, were I disciplined enough to do so, to transfer £35 a month to a savings account to be used in purchasing any replacements (or, if not spent on such, to splurge on a holiday or similar treat at the end of the year).

Some manufacturers and retailers are much more straightforward about their products. For instance, back in 2005 we bought a Miele washing machine and it came with a free ten year warranty covering parts, labour and call out charges. Last year we bought a television from John Lewis and they provide a five year guarantee free, gratis, for nothing. They probably do so because they recognise that the chances are they will not have to make good on that guarantee within the five years; other retailers would do well to follow suit.

Naturally my aversion to extended warranties could come back to haunt me if two or more of my appliances need replacing at the same time. There are companies like Warranty Direct who provide guarantees for three items at a pretty reasonable £12.75 per month plus £3.25 for each additional appliance so I could in theory insure my seven appliances for £321 per annum, but that is still £70 more than the average replacement cost of those pieces of equipment.

There are some things, like cars and central heating boilers, where warranties make better sense as the repair or replacement costs can be eye watering, although that isn’t to say that these warranties are perfect. We will all have experienced or at least have heard of instances where a fault was not covered by the warranty; as with any insurance there are the dreaded exceptions but overall these are two items where peace of mind is probably worth the cost.

Despite the fact that in 2005 the government tried to regulate extended warranties on household appliances and electrical goods, the Office of Fair Trading still receive complaints about the way warranties are sold, or their failure to pay out if the item develops a fault. As with most purchases, when considering taking out an extended warranty it really is a case of caveat emptor.