Extended Warranty

Updated: Oct 26, 2020

Extended Warranty Insurance is where the consumer pays a fee in return for the warranty provider agreeing to repair or replace parts or components or goods in the event of defects or failures.

This is also called Mechanical Breakdown Insurance.

A problem with Extended Warranty cover is that it is almost completely worthless on second-hand vehicles given the many exclusions.

Consumers rights over quality are protected by Australia’s Consumer Law and therefore buying extended warranties is not necessary.

Australians have paid over $300 million in Extended Warranty insurance.¹

The average premium for extended warranty cover is $1482.² Customers could receive up to this amount plus interest.


¹ ASIC Report 492 ² Ibid.

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