The truth about extended warranties

I recently bought a new dishwasher. I found the exact one I wanted, then carefully compared retailers until I found it at a great price. But when it came time to check out, it offered an option to purchase an extended warranty.

As soon as I saw those words I imagined my dishwasher breaking soon after the standard warranty had expired. It seems liked the responsible choice to extend the warranty and its never cheap.

Thankfully CHOICE has come to our rescue, just in time for all those Christmas, Boxing Day and New Year's purchases.

While the consumer group found one-in-five Australians are buying extended warranties, they offer nothing more than the legal rights you already have under consumer law.

In fact Julia Steward, Consumer Rights Expert at CHOICE tells consumers not to "waste" their money on them.

"Many extended warranties largely replicate or underplay your existing rights under the Australian Consumer Law," she says.

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"They're a sales trick to squeeze more money out of you that ignore your  existing rights under the law."

She says if you feel pressured to purchase an extended warranty ask what it will give you beyond Australian Consumer Law.

In the event you experience an issue, CHOICE says to contact the retailer with your proof of purchase. If a product isn't performing as advertised you will have the option to claim a refund, replacement or repair.

If the retailer isn't helpful, the next step is to write a formal complaint. If you don't receive a response after this step, that's when you contact your local consumer affairs and fair trading body such as ACCC.

In some circumstances, you can refund the purchase through your bank.

"Remember, your rights are often longer and more comprehensive than what you receive from a warranty," she explains.

"Your rights aren't one-size-fits-all. Under the law, the products you buy should be eligible for refund, replacement or repair depending on the expected lifespan of the product. Not what the company says the warranty is."

You can find out more about extended warranties by visiting the CHOICE website.