A penalty on your telly

Football fans have created a sales boom in TVs and videos. But the warranties with them can be an own goal, Paul Slade warns

Electrical retailers such as Comet and Dixons rely on the extended warranties they sell with appliances to boost tight profit margins on the goods themselves.

But this can lead to shoppers being pressured to buy expensive warranties. These are lucrative for the shop, but often poor value or quite unnecessary for the buyer.

Taking an extended warranty typically means the goods you buy will be covered for repair if they break down for five years instead of the one year's cover you get free.

But if the set you buy does not break down in the first year, the chances of it doing so by the end of year five are slim. A recent Consumers' Association survey showed that over 80 per cent of televisions and videos operate trouble-free for at least five years.

Harriet Hall, the National Consumer Council's legal officer, says: "It's definitely worth being wary of someone who is trying to press you to buy an extended warranty, because you may well be able to get a better deal somewhere else. You need to think twice about why you're actually buying one at all."

A Which? undercover shopping exercise at the end of last year found that staff at Comet, Currys, Dixons, The Link, Powerhouse, Scottish Power and Tempo all misled customers in an attempt to sell extended warranties.

One shopper was told the average repair bill for a damaged video was pounds 119, when the true figure is just pounds 49.70. Another was told that he was likely to drop his new phone, because he "looked like the type".

Refusing to buy a retailer's warranty along with the goods themselves does not mean you have lost the opportunity forever. Many stores will still sell you a warranty up to a year after you bought the goods. Others stop selling the warranties one month after purchase.

Even if you cave into the immediate pressure to buy, you still have the chance to change your mind later. The British Retail Consortium's code of practice on warranty sales insists on a "reasonable cancellation period" after purchase. In practice, this means you can normally cancel a warranty up to 14 days after buying it.

Ms Hall says: "Until you get home and open the box, you don't know how long the manufacturer's warranty is going to be. Sometimes the manufacturer will extend the free warranty for a longer period, and you usually pay less than you pay the retailer." In cases like this, the cooling-off period should let you cancel the retailer's cover and take the manufacturer's instead.

Dixons Group - which also owns Currys - expects to sell more than 100,000 televisions and videos by the time the World Cup is over and it is the most expensive sets which are selling fastest of all. Dixons spokeswoman Jacinta Gray says: "The World Cup is a big influence. With a major event, people do tend to go for the bigger sets."

One of Dixons most popular sellers is a 28-inch Dolby set, priced at pounds 449.99. Buying a Dixons extended warranty to stretch your cover on this set to five years would cost you another pounds 199.

BREAK COVER

Your contents insurance will cover the cost of a new television if the set is accidentally broken, but will not help if a part wears out.

For that, you need a separate policy to cover the cost of repairs. TSB and Norwich Union both offer policies like this, which you can take out to cover appliances which you have already owned for as long as eight years.

There is no point in taking such cover until the manufacturer's guarantee has expired. If you need to make a claim under these policies, the insurer will send out one of its own approved repairers to do the work.

Norwich Union's appliance breakdown plan covers all the main electrical appliances in your home, including the washing machine, dishwasher and video. you have to choose whether to cover items up to five or eight years old.

Monthly premiums for the five-year option range from pounds 6.999 to pounds 12.999. For the eight-year option, you will pay between pounds 8.99 and pounds 17.99 a month. Breakdowns in the first 30 days of a policy are excluded.

Exact premiums depend on factors such as how many people there are in the house. Norwich Union's Sue Winston says: "For five-year-old appliances 66 per cent of the people we quote for pay pounds 6.99. For eight-year cover, 70 per cent pay pounds 9.99.

The premiums for TSB's appliance repair insurance are based on the individual items covered. Insuring a television would cost pounds 3 a month if the set is between one and four years old and pounds 4.50 if it is between four and eight years old. You pay a single monthly premium to cover the combination of appliances to be insured.