New website available for consumers of domestic electrical goods

There are already comparison sites for utility rates, insurance, bank accounts, saving rates, credit cards and mortgages; so it comes as no surprise that another consumer-facing financial product – There are already comparison sites for utility rates, insurance, bank accounts, saving rates, credit cards and mortgages; so it comes as no surprise that another consumer-facing financial product – the extended warranty, should be next in line.

Last year, the OFT conducted a market study and found that consumers were not getting the best value for money when purchasing extended warranties.  In particular:

• only ~25% of consumers consider more than one provider when seeking an extended warranty;


• the 'point of sale' advantage enjoyed by retailers (i.e., the ability to sell extended warranties at the same time as the electrical goods are sold) distorts competition in the marketplace; and


• when buying an extended warranty at the point of sale consumers are not given enough information to make an informed decision as to whether the extended warranty represents value for money.



 
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As a result, the OFT asked retailers to set up a comparison website to allow consumers to access better information and compare warranties on a like-for-like basis for a wide range of domestic electrical goods.

The website is now live - http://www.compareextendedwarranties.co.uk.

The OFT is hopeful that other providers will also elect to participate to give consumers more information to allow them to make an informed choice.

The expected increase in competition will be great for consumers, but could also present an opportunity for retailers and other providers of extended warranty insurance products to grow their market share into the areas traditionally held by other retailers.