Credit Card extended warranty vs retailer extended warranty

ash on 23/06/2010 - 12:55
Last edited 23/06/2010 - 12:58

hi

In many of the deals posted, especially for electronic/electrical goods, many people often think about purchasing extended warranties. I also hear people recommending using their gold/platinum credit card to get extended warranty.

I have a Gold mastercard myself and I first got it for that exact reason - free extended warranty and travel insurance.. However, after purchasing several electrical goods at boxing day last year, I wanted to find out what exactly the "free extended warranty " meant so I went throught the T&C of my CBA Gold mastercard. Not surprising I found the "strings" that were attached.

The extended warranty is for 1 year only on top of existing warranty not exceeding a total of 5 years.
and
you have to pay for a upfront $100 excess fee for any repairs carry out.

This means if you are purchasing anything below $100, the extended warranty is basically useless. The only good thing about the CC warranty is that you don't have to pay for the warranty upfront.. so if nothing happens to your purchase you don't waste your money on warranties.

As I have not purchase retailer extended warranty for a while, I just want to know does normal retailer's extended warranty also come with an excess fee? And what are people's experience with claiming extended warranties using a credit card and from the retailer?

On a side note, one of my friends who used to work at DSE told me they make most profit from selling extended warranties to their customers, and he rarely saw an extended warranty claim in the time that he worked there.

General Discussion

Comments

  • chuneeperformance on 23/06/2010 - 13:26

    STGEORGE PLATINUM is only 1 year extended from manufactures warranty but there's no excess on warranty or its claim.

  • dragonrabit on 23/06/2010 - 17:47

    my citibank platinum card will match manufacture warranty up to 3 years.

  • inherentchoice on 23/06/2010 - 23:08
    +1

    Well there's a lot of incentive for the salesperson to make you purchase the extended warranty because they will get a decent cut of it. With credit cards on the other hand I don't think they're siphoning off as much. Warranties are really just an insurance policy and personally I'd be happy to just take the risk rather than send money though to the insurance giants that underwrite all the different kinds of extended warranties.

    Seriously, with whitegoods and technology, by the time it breaks after the manufacturer's warranty is over, if it ever breaks, there will be newer better ones on the market (including deals posted on OzB) and your particular model would be worth a third of what you paid or less.

    Anyway I just say all extended warranties are over-rated and not worth it.

    • ash on 23/06/2010 - 23:19

      Yes that was my thinking too after talking to the friend who used to work in DSE. The companies that underwrites extended warranty must be making lots of profit to give such a big cut to the retailer… meaning customers are probably not claiming for repairs.

      From personally experience, I think if something has manufacturing defect it will usually breakdown in the first 12 months, otherwise they usually last for few years. Only time I was talked into buying an extended warranty was for my car stereo, but again I never got to claim any warranty on it.

      • dragonrabit on 23/06/2010 - 23:27

        yup.
        a year ago, my friend would like travel to overseas and ask me which travel insurance has cheap premium. i told me friend to take gold card that has free travel insurance. 6 months ago she went to overseas again and got accident there. she said it is worthed to pay the excess when she claims with her credit card, if she purchase a separate travel insurance it will cost her at least $300 for her whole family + she still need to pay excess $100. she is only paying $200 on excess with her credit card.

        • inherentchoice on 24/06/2010 - 21:12

          If you don't already have it covered by your credit card I think www.travelinsurancedirect.com.au is what you want and there was a 10% discount code floating around. Travel agent tried to sell me a policy for $90 insurance with like $200 excess. TID had gave me better cover for about $30 and only $100 excess.

          • dragonrabit on 24/06/2010 - 21:51

            @inherentchoice: it is depend where are u going. certain region cost you more for the cover. i still prefer my free travel insurance from my credit card, flat excess $200. and been travel many times, so far never claimed with them.

  • stanas on 24/06/2010 - 13:45
    +1

    Most goods will also have a statutory warranty which may continue beyond the length of the warranty provided by the retailer. However, it may be difficult to enfore given the vague way it is written and is defiantely more useful for expensive items. Basically you are eligilbe to make a claim if the product doesn't last a reasonable amount of time, given the price you paid. Also if you are successful you will likely be paid on a pro-rata basis.

    You would have to weigh up the costs of the extended warranty as well as the T&C of the extended warranty, to see if it worthwhile over the statutory warranty.

  • dealman on 20/12/2011 - 06:57

    Guys, Has anyone made a claim on the extended warranties offered by credit card companies.

    Just wanted to know how the experience was like? Was it easy / difficult ? Is the extended warranty comparable to the manufacturer or retailer extended warranty ? I have been buying things on my credit card just for this extended warranty, is it any good?

  • Geewhizz on 20/12/2011 - 08:18

    We nearly always buy extended warranty, and have never NOT had to use it, ie, every item we've purchased extended warranty on, we have needed it.

    We discovered though, that Harvey Norman's extended warranty is cr*p compared to the vast majority, so shopping for extended warranty based on price can lead to disappointment. Whereas most extended warranties really are an extension of the warranty for the specified period, once repairs through HN are deemed to have cost what you originally paid for the item, that's it. I found this ut with a $1000 digital camera - it had been back twice for repairs and the third time it needed to go, (only about 2 years into a 4 year extended warranty) I was told there was only $56 remaining of what they would cover. What the …?

    Anyway, lesson learned. The worst thing is, the vast majority of the staff seem unaware that this is the way the extended warranty they are selling works.

    A lot of manufacturers sell their own extended warranty these days.

    • dealman on 20/12/2011 - 17:16

      That sucks !
      Why take a 5 year warranty then ? Did you fight this issue further ? what happened

      • Nutrino on 20/12/2011 - 21:24

        Here's some advice, if you do buy the extended warranty READ the TERMS AND CONDITION, the sales person will not tell you everything. If you don't agree there is a cooling off period, usally 7 days.

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