Co-operative Electrical to offer no-profit warranties
The Co-operative said that the warranty market for electrical goods is estimated to be worth £1 billion a year in the UK, and added that some consumers can pay almost as much for the warranty as they do for the product it was purchased to cover.
An investigation by the Office of Fair Trading in 2012 highlighted a number of competition concerns that meant customers were not getting the best value for money, as well as specific issues around the expense of pay as you go warranties.
The Co-operative said it is aiming to champion a new way of providing extended warranties by promising to make no profit on the insurance option on a range of products, from cookers to fridge freezers and TVs to washing machines.
James Holland, managing director of Co-operative Electrical said: “A significant number of consumers seek the reassurance offered by an extended warranty, however we believe that this market should be easier to understand and represent real value, particularly when you compare the price of the warranty with the actual price of the electrical product. In most cases it is just far too expensive.
“If customers do choose to take out the additional cover we want them to benefit from one of the best policies on the market. That is why our warranty not only insures against breakdown or accidental damage, but also protects against food loss in the case of freezer breakdown, and if the product has to be repaired for a third time it will automatically be replaced with a new one.”
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