Washing machines are expensive to repair but are extended warranties the answer?
Third party extended warranties have changed over recent years and no longer give the type of cover most people would expect, but how many people realise? Many washing machines have been decreasing in price (and quality) for decades but spare parts prices and consequently repair prices have increased disproportionately. Many washing machines aren’t economically worth repairing at increasingly younger ages (the youngest I’ve come across is just 13 months)
It must be comforting to think your washing machine has an extended warranty to cover it. But think about it, if the average washing machine has become so expensive to repair and so cheap to replace that you really need protecting – would insurance companies be daft enough to take the hit for you? No, we all know they are anything but daft.
Some extended warranty schemes are writing off washing machines left right and centre these days and you could find yourself cyclically buying new washing machines and extended warranties far too regularly. But who’s to blame? Ultimately it’s the public for demanding and (falling for) unrealistically cheap finished goods prices. Many people buy these extended warranties thinking they are an answer to expensive repairs but the insurance companies are just as negatively affected by unrealistic repair prices so their prices and the quality of cover is negatively affected.
What’s the answer?
The most obvious answer would be to increase the cost of the extended warranties to reflect the higher repair prices. But that would just make the price of a 5 year warranty even more than the price of buying the washing machine in the first place. It just wouldn’t work because people would never pay that much.
What’s the alternative?
Well to survive, if you can’t (or daren’t) increase prices you have to decrease the costs of the product and when that’s taken as far as possible you have to start decreasing the quality of the product. The realities of extending the warranty on something so expensive to repair and so cheap to replace are that the quality of cover is detrimentally affected.
Insure a washing machine under an extended warranty these days and when it’s past 5 years old many of the leading extended warranty companies will only repair it if the cost of parts and labour don’t exceed 50% of the cost of “the cheapest available replacement”. This means if you insure a washing machine that costs £250, any repair above £125 will scrap it (after 5 years). Doesn’t sound too bad? Unfortunately £125 doesn’t get lots of repairs done these days, and contrary to what you might expect, some of the cheapest washing machines have the most disproportionately expensive prices for spare parts.
Example:
You can buy a ridiculously cheap washer dryer in the shops right now for just £266, but the circuit board (just one small part) costs £138 as a spare (This figure is from an email to me from a customer saying it was quoted by a repair agent over the phone). With fitting costs (depending who you use) it could be around £178 – £200 to replace, which is way above the maximum price for a repair after 5 years old for that machine. Potential faults that aren’t likely to get fixed on many washing machines over 5 years old are the PCB, motor, drum, tub, and depending on make and model even the drum bearings. The new Hotpoint Aqualtis washing machine can’t even be stripped down because it has a sealed tub and drum. It could be scrapped after 5 years simply because something’s got trapped under the drum because it can’t be stripped down to retrieve it.
Once a washing machine is over 6 years old they’ll only pay up to 40% of the price of the cheapest new one available, and at 7 years of age they’ll only pay out up to 30% of a replacement cost, which frankly will hardly cover any repairs at all (£79.80). The idea appears to be that they’ll cover repairs for the first 5 years but after that they’ll scrap it unless only a minor repair is needed.
What happens when a repair exceeds these percentages?
The good news is you get a new one but the bad news is it’s usually supplied by their suppliers and you have to pay at least half of the cost to replace it – and of course your warranty is then cancelled (even if it’s only been in force a few weeks).
- If your appliance is between 5 and 6 years old you contribute 50% of the replacement price
- Between 6 and 7 years old they will contribute 40% and you need to find 60%
- At 7 years or older you just get 30% towards a new one and have to pay the remaining 70% – All plus delivery charges
Check your terms and conditions
If you have an extended warranty, carefully read the terms and conditions. There’s nothing you can do about it but at least it won’t be as big a shock if they scrap your washing machine. Consider putting the money towards a better quality washing machine next time ( Research buying a washing machine using Washerhelp )
If you are considering buying an extended warranty right now, consider whether to put the money toward buying a better quality washing machine in the first place or not. Many better quality washing machines have free guarantees of 2, 5 and even 10 years ( Which are the most reliable and the least reliable makes of washing machine? | TIP: John Lewis guarantee their own “John Lewis” brand washing machines for 3 years and Miele washing machines have as long as 10 year guarantees ).
Many people do like being covered, and it clearly must work out beneficial for some people but at least be aware of the limitations of cover these days. I don’t intend to criticise these companies. They are doing what they can to survive and keep prices affordable, but while prices of new washing machines keep falling and prices of spares keep being ridiculous you may find yourself being forced into replacing your washing machine quite regularly. This I believe would cost more in the long run than spending more on a high quality washing machine instead.
Finally, don’t confuse paying more for a washing machine with getting a better quality washing machine ( If I buy a more expensive washing machine, do I get a better washing machine? | Related advice: Should I buy an extended warranty / guarantee?
Written By - Washerhelp on May 23rd, 2007 with
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