herald

Monday 20 November 2017

Take a chance with laptop and skip longer warranty

One of the most annoying things about buying a piece of electronic or electrical equipment is the hard-sell to purchase an extended guarantee.

Typically these extended guarantees promise to pay out if anything goes wrong with your piece of kit after the standard 12-month guarantee expires.

In essence, an extended guarantee is an insurance policy that will cover the cost of any repairs for the life of the extended guarantee, which can run for as long as four years. For those of us who like piece of mind that has a certain superficial attraction. But is it worth it?

Expensive

These policies are expensive, sometimes up to 20pc of the purchase price for four years cover.

That works out at about €120 for a €600 laptop, though you could probably do a bit better if you haggled.

But should you bother with one of these extended guarantees in the first place?

The problem with extended guarantees is that the quality of most electrical equipment is now so high that breakdowns are extremely rare occurrences. In other words, the chances of you ever getting to claim on your policy are slight.

My advice is, unless you absolutely must have peace of mind, reject the salesperson's attempt to sell you an extended guarantee and take your chances instead.

My car insurance is coming up for renewal shortly. I have always paid it on the

Yes it is. Most motor insurance customers who opt to pay monthly rather than pay the full amount up front end up being stuck for very high interest rates.

Surprise, surprise Quinn Direct, which frequently comes out cheapest in price comparison surveys, is one of the worst offenders, charging customers who choose to pay their insurance monthly a whopping 19.66pc annual interest rate.

And Quinn isn't the dearest. That dubious distinction belongs to Zurich, which stings its monthly-paying customers with a usurious 19.9pc interest rate. Axa has the third-highest interest rate at 17.24pc.

Value

Allianz claims not to charge its monthly-paying motor insurance customers interest. Instead it charges them an 8pc "service charge" on the pre-levy insurance premium. That works out at an interest rate equivalent of about 15pc. RSA charges a 13.7pc interest rate, while Aviva charges 7pc.

By far the best value is FBD which charges an interest rate of just 4.25pc.

The interest rates charged by Quinn, Zurich and Axa are well up to credit card levels. This is dear money.

Anyone who can't afford to pay all of their premium up front should consider taking out a loan from their bank instead. They would almost certainly end up paying less.

If you can't afford to pay your insurance premium in one go, and for some reason are unable to get a bank loan, then you should factor in the interest cost when comparing motor insurance quotes from different companies.

By the time you have paid out for all of that interest your 'cheap' motor insurance might turn out not to be so cheap after all.

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