Extended warranties are a funny thing

We buy a computer, or a home appliance, and we are always offered an extended warranty which spans longer than the base manufacturer warranty. It’s well known that these warranties are very profitable for sellers, and it’s certain that it is because, on average, the repair costs are well under the cost of the warranty. Only on that point of view, we’d be better of by paying ourself for the repairs.

But there’s something even stranger to extended warranties: they generally offer nothing which isn’t already covered (for free) in Quebec by the Loi sur la protection du consommateur (Consumer Protection Act). Let me translate a few points from the act:

  1. This section applies to a contract for a sale or rent of goods and to a service contract.

Ok, so now we know what the law is talking about when it speaks of contract. Let’s skip to the good stuff:

  1. A good which is subject to a contract must be capable of serving to the usage it is normally destined.

  2. A good which is subject to a contract must be capable of serving a normal usage for a reasonable time, in accordance to its price, dispositions of the contract, and normal usage condition for the good.

So if a seller tells us the device is going to last 10 years, that the price is fair, and it breaks after only two years, then the seller is at fault.

  1. The consumer who contracted with a merchant has the right to directly exerce against the merchant or the manufacturer a recourse based on an obligation from article 37, 38, or 39.

So, if such device breaks after two years, even if the base warranty has expired, you can ask to the seller to repair it; if he doesn’t you can fill a complain at the Office de protection du consommateur (Consumer Protection Office) and fill a suit to the small claims court. That’s my opinion, and it matches what Option consommateurs has to say on the subject.

So, the extended warranty, in addition to cost much more than what it would probably cost for all the repairs it covers, does rarely cover anything more than what is already covered by Quebec’s law. Its only advantage would be to make merchants a little less reluctant to comply, but how much is that worth?



I thought about this the same way. Holland has almost the same law where an “expected lifespan of a good” also is important. Say 10 years expected life from your example, and breaks after two years. Then you’ld probably have to share repairs (around 20% pay yourself). Caveat-1: it has to be a production fault or engineering fault, if you use your keyboard to drive nails into the wall, well you get the point. Caveat-2: hassle. When you pay for extended warranty you probably don’t need to argue a lot to get it repaired, without it you need to go thru a lot of hoops to get to your rights. So for some stuff (or particular companies) extended warranty might work out. Caveat-3: if you are a company (dunno about free-lance / one-person companies) NONE of the above works. You are on your own and have to fight hard and can end up disapointed without extended warranty (which might even be tax-deductable). Regards, GD.

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