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Warranties and extended warranties

Information about warranties and extended warranties, including when they’re worth buying and what retailers must tell you.

WarrantyInformation about warranties and extended warranties, including when they’re worth buying and what retailers must tell you.

This page includes changes to the Fair Trading Act that apply from 17 June 2014.

On this page:

Types of warranties and guarantees

There are 3 types of warranties and guarantees that cover the quality of goods and services you buy:

  • warranty
  • extended warranty
  • consumer guarantees.

Warranty

This is a manufacturer’s guarantee that they will repair or replace faulty goods.

Note that one of the guarantees under the Consumer Guarantees Act is that the manufacturer will meet the terms of their warranty.

See Terms of manufacturer's express guarantee (ie their warranty) must be met for more information.

Extended warranty

This type of warranty is a retailer’s guarantee that they can sell to you.

Under an extended warranty, the retailer agrees to remedy any specified problems with a product for a certain amount of time after the manufacturer’s warranty has expired.

If you buy an extended warranty, you don’t have to pay for these specified repairs on your product during this extra warranty time.

Extended warranties are offered on a huge range of products − electronic goods and whiteware in particular. 

Consumer guarantees

These guarantees are your basic consumer rights under the Consumer Guarantees Act. One of these guarantees is that goods should be durable and last for a reasonable amount of time.

See Consumer Guarantees Act for information on the guarantees that goods and services must meet when sold by a retailer or service provider. 

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Do I need an extended warranty?

Before you buy an extended warranty, it’s a good idea to consider if you really need one. The Consumer Guarantees Act already gives you certain rights. This includes the right to expect that your purchase will last for a reasonable amount of time.

If you expect a product to last for the same amount of time − or more − than the extended warranty lasts, you should be covered by the Consumer Guarantees Act.

If you’ll want to replace the item before the extended warranty ends, the extended warranty may be a waste of money. For example, if you usually buy a new phone every 2 years, you probably won’t use a 5-year warranty. 

When is an extended warranty a good idea?

An extended warranty may be a good option if you’re buying something that you intend to use for business, as the Consumer Guarantees Act doesn’t cover items bought for business use. But, remember to check the terms and conditions to make sure the warranty gives you the protection you may need.

How long should I expect my goods to last?

With or without a warranty or extended warranty, you have the right to expect goods to last for a reasonable amount of time.

  • Example: If you have a computer and the warranty is for 1 year, this doesn’t mean you’d expect the new computer to last only 1 year. It’s reasonable that a new computer would last several years – as long as you look after it and follow the instructions on how to use it.

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What the retailer must do when selling an extended warranty

The retailer must do certain things when they sell you an extended warranty.

These obligations are included in the Fair Trading Act and cover all extended warranties sold from 17 June 2014. The Commerce Commission enforces this law.

What the retailer must tell you

When a retailer offers to sell you an extended warranty, they must make it clear what extra protection the extended warranty will give you. That is, what additional rights you’ll get on top of the rights the Consumer Guarantees Act gives you for free.

They must also explain:

  • that you have 5 working days to cancel if you change your mind
  • how you may cancel.

What the retailer must give you

At the time you buy your extended warranty, the retailer must give you a written agreement. This agreement should be easy to understand and free of complicated language or legal jargon.

The front page of the agreement should:

  • clearly explain how each of the protections the extended warranty agreement gives you are different to your rights under the Consumer Guarantees Act (CGA)
  • summarise your consumer’s rights under the CGA and explain how you can make a claim or seek a remedy
  • explain how you can cancel the agreement
  • give you the warrantor’s name, street address, telephone number, and email address.

The written agreement should also include:

  • the rights and obligations of the warrantor (the business providing the extended warranty – sometimes it's the retailer, sometimes it's another business)
  • the duration and expiry date of the warranty  (including whether or not the agreement expires when a claim is made)
  • the total price you’ll pay over the full period of the agreement
  • the date the agreement starts. 

More about the retailer’s obligations

See Extended warranties on the Commerce Commission’s website for more information about what the retailer must do when they sell you an extended warranty.

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Read the fine print

Make sure you understand all the terms and conditions before buying an extended warranty. For example, it might only cover certain parts or certain faults. Or, if you use the extended warranty and get a replacement, the extended warranty may not cover the replacement goods.  

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You can cancel an extended warranty within 5 working days

From 17 June 2014, you have 5 working days to cancel an extended warranty if you change your mind. (Note that if you bought your extended warranty before this date and you weren’t given this right, the retailer wasn’t breaking the law.)

Your 5-day cancellation time (also called a ‘cooling-off period’) starts the day after you receive a copy of the extended warranty agreement.

If you cancel within the cooling-off period, you are entitled to a full refund of the warranty price – with no deductions and no questions asked.

You can cancel any way you choose

You can cancel an extended warranty agreement any way you choose, providing you are clear that you are cancelling the agreement and use the warrantor’s contact details they provided in the agreement.

You must still pay for the goods or services you bought though

When you cancel an extended warranty agreement, you must still pay for the goods or services that the extended warranty was going to cover.

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How long should I expect my goods to last?

With or without a warranty or extended warranty, you have the right to expect goods to last for a reasonable amount of time.

  • Example: If you have a computer and the warranty is for 1 year, this doesn’t mean you’d expect the new computer to last only 1 year. It’s reasonable that a new computer would last several years – as long as you look after it and follow the instructions on how to use it. 

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If something you buy turns out to be faulty

Neither a manufacturer’s warranty, nor an extended warranty, replaces your rights under the Consumer Guarantees Act (CGA). And the business can’t tell you that it does.

If you buy something that turns out to be faulty, you can choose how you’d like to sort out the problem. You can choose whether to go to the manufacturer or the retailer. A retailer can’t refer you directly to the manufacturer if that isn’t your choice – even if the manufacturer’s warranty is still valid. 

What can I do if something I bought didn’t last as long as I expected it to?

Take the goods back to the business if you can and show them what’s wrong. Explain that under the CGA they must repair, replace or refund the faulty goods if the problem is minor or give you a refund, replacement or compensation if the problem is serious.

You can also go to the manufacturer or importer to get the problem fixed. You can use the manufacturer's warranty or your extended warranty if these apply to your problem.

Can the business charge me to check the goods?

Sometimes the business may ask for a deposit to cover the cost of checking the goods. If the problem is the fault of the goods then the business should refund the deposit and give you a remedy under the CGA. The business should have told you about this policy when they sold you the goods. Otherwise, you can tell them you won’t pay it. 

What if the business or manufacturer won’t fix the problem?

Write a letter to the manager or the head office of the business. Explain the problem and what you’d like them to do about it. Keep a copy of the letter.

See How to complain for tips on how to complain effectively and to the right person.

If you still can’t agree with the business, you can take your claim to the Disputes Tribunal.

See Disputes Tribunal to learn about the Disputes Tribunal process. 

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Got a problem with a warranty?

If you have a problem getting a repair, refund or replacement under an extended warranty, you can take your complaint to the Disputes Tribunal.

See Disputes Tribunal to learn about the Disputes Tribunal process. 

If you believe a retailer isn’t complying with the law, you can complain to the Commerce Commission.

See Making a complaint for information on how to make a complaint to the Commerce Commission.

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Find out more

 

Last updated 16 June 2014
[Internal link] Consumer law changes - Changes in consumer rights.

Consumer laws have changed

[icon] Alert. Some web pages may not show these changes yet.

See Changes in consumer rights for more information.

 

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