Is Appliance insurance a good idea or go with Currys care plan

grace2much

Hi all, I always avoided care insurances from places like Currys or Argos etc.  But I want to consider this more.  My cooker is 7 years old and the washing machine is 6 years.  Both are on life support and will need replacing probably within weeks.  I have considered getting them repaired but even for an engineer to call out a service charge is £50 even before parts or labour.  A new basic cooker is £300 and WM £200 ish.  So I'm reluctant to sink maybe £200ish in repairs on 6/7-year-old appliances.

Currys just mailed me an offer for a washing machine as I made some enquires from them online.  The WM is just over £200 but they also included an offer of £90 for 5 years care cover with a replacement if the WM can't be fixed. I need to read the fine print first but it got me thinking.  

Does anyone know anything about large appliances insurance for breakdown/replacement/repair cover?  I know my home insurance does not cover normal wear and tear as my cooker and WM has experienced.  The Currys offering is £90 for 60 months cover so £1.50 per month but only covers this WM so I was thinking maybe appliance insurance that would cover all or most of my large appliances like TV's freezers, cooker, Tumble dryer WM and perhaps even my computer could work out a better deal? 

Or maybe I should stick to what I have always done and buy everything outright, get the 1-year normal warranty, and hope...... but if it dies just bite the bullet and replace it myself.  Even thinking about my current cooker and WM neither of these would have been covered with a similar Currys care deal for the 5 years as both are just over 6 years old.  Mmmmhhh lots of angles to consider...

Any thoughts or ideas would be appreciated. 

Section62

grace2much said:

The Currys offering is £90 for 60 months cover so £1.50 per month....

The first 12 months (at least) is covered by the manufacturer warranty, so in effect you usually only get 48 months for your £90.

And £90 is just short of half the cost of a replacement washing machine....

Whether extended warranties are worth it depends to an extent on how much use the machine gets.  If you are hammering it with several loads per day then breakdown (typically the main bearings) is more likely to happen sooner.  If you only use the machine a couple of times a week (or less) then the wear and tear on items like the bearings will be less.  If you've got 6 years out of your current machine then it wouldn't be unreasonable to expect to get 5 years out of the replacement one... at which point the extended warranty could have run out as well.

Bendy_House

G2M, when was the last time a major (or minor) appliance if yours broke down within 5 years?

Other than, perhaps, 'consumables' like heating elements, which are possibly not even included.

Alanp

Put a bit of money aside each week/month, to pay for any future repairs, if you don’t use the cash then it will go towards a replacement.

GDB2222

There are very high commissions on these insurance covers, which is why retailers are so keen to sell them. So, let’s assume that the £90 premium breaks down something like this:
Commission to seller £45
Admin and profit for insurance company £20
Average cost of repairs £25

So, you are paying £90 to get an average of £25 back. Clearly, that’s not good value for money. Even if my breakdown is not quite right, it’s obvious that the retailers would not be offering the insurance unless they pay out less than they get in.

But, there’s a bit more to it than that.  So, you need to ask yourself a couple more questions.

Are you particularly hard on your appliances? I mean 4 or 5 times as hard as an average person, so you might actually make a profit on the policy? Bear in mind that the average person taking out the insurance may not treat their appliances particularly well.

Second, can you afford to replace or repair the appliances out of your pocket, if they go wrong? That seems likely if you can cheerfully contemplate spending £90 now, on the off chance of claiming successfully on the policy.

Peter999_2

I have self insured for over 20 years.   I save all the money I would have spent on product insurance.   I have saved a large amount of money this way as nothing has failed before being at least 6 years old.    My fridge, for example, is 9 years old and still going strong.   If I had paid the £3 a month warranty for it, it would have cost me £324.  Multiply that by a washing machine, television (x3), computer, cooker, microwave, tumble drier and imagine how much you save.

NorthYorkie

Whenever I have bought an appliance and have been asked if I wish to take out an extended warranty, my response have been along the lines of "Do you mean that this is likely to breakdown in the next few years? If so then  I don't think it's worth buying!"

As suggested above, if you want to provide for possible repairs, it makes much more sense to put the £1.50 per month to one side, rather than hand it over to an insurance company.

Niv

Your current WM is 6 years old and you are considering getting 5 years cover on a new one .... think about that for a minute

Debran

According to "Which?" the answer is NO.  They say that it is not normally worth taking out appliance insurance.

katejo

I never buy any appliance insurance. Too many opt outs/exclusions for the insurer such as claiming wear and tear. Instead just pay regular money into a savings account to cover things like this. If the machine lasts well, you can then use the money for something else.

ouraggie

John Lewis often give 2 year warranties.

My MIL always insists on taking out these appliance policies. She refuses to listen to me when i say they are largely a waste of money. Last year her cooker conked out and she got a new one on the insurance. She proudly showed me her free cooker and i said “You haven’t got a free cooker at all. You have been paying insurance for it for nearly 3 years, a total of nearly £350. So actually you have bought it yourself and just paid for it in advance over 3 years”. I then pointed out that if her old cooker HADN’T conked out she would have still paid out the £350 but would have NO new oven to show for it.
 She then said “yes, maybe not yet but it would conk out eventually and i will have the new one whenever it does.” I tried to explain that with her logic, the longer it lasts for, the more monthly payments she will make to “buy” the replacement. She said, yes, but things go up in price over time, but my insurance stays the same every month for 3 years. Maybe she has a point. I can’t decide!