Your rights with extended warranties, manufacturer’s warranties and guarantees under the Consumer Guarantees Act and the difference between these.
Generally a guarantee or warranty is an agreement from the retailer or manufacturer that they will repair or replace an item, or give you a refund if something goes wrong within a reasonable time after you buy it.
In New Zealand, consumers are protected by guarantees in the Consumer Guarantees Act. Many products will also have a manufacturer’s warranty, and you can choose to pay extra for an extended warranty, though this is often unnecessary.
In New Zealand, consumer guarantees are set out in the Consumer Guarantees Act (CGA).
Consumer guarantees give you rights against a manufacturer or importer as well as the supplier or retailer if your products don’t meet any of the CGA consumer guarantees. These rights include the right to expect that your purchase will last for a reasonable amount of time, as long as you don’t misuse the products. This period may last longer than the manufacturer’s warranty for larger electrical appliances like ovens, washing machines and dryers.
These guarantees apply whether or not you have an express manufacturer’s warranty (or it has expired) or an extended warranty from the retailer. Again, the supplier will usually sort out any issues directly with the manufacturer, unless you bought directly from the manufacturer or importer.
For replacement goods your consumer rights start all over from the date of replacement.
Manufacturers’ warranties are in writing and guarantee that they will repair or replace faulty products for a set period. This is useful when the supplier has gone out of business.
Usually the supplier will liaise with the manufacturer. If the manufacturer does not follow the terms of their warranty, you can claim for compensation. If you claim on the manufacturer's warranty and your products are replaced, you may still receive a new warranty on the replacement products.
An extended warranty is like insurance that you buy from the shop to give you extra protection. Sometimes your home and contents insurance will cover the same things that an extended warranty might cover.
Extended warranties are offered on a huge range of products, especially electronic products. Under an extended warranty, the warrantor agrees to remedy any specified problems with a product for a certain amount of time after the manufacturer’s warranty has expired.
Generally, extended warranties aren’t necessary because you already have extensive rights under the Consumer Guarantees Act, but they can be a good option in limited situations, including:
- if the product is something that you need continuously and you don’t want to wait for repairs
- for commercial goods, since they are not covered by the Consumer Guarantees Act
- if it applies to damage caused accidentally (home and contents insurance may provide cover so check this first).
Read the terms and conditions carefully to check it gives you the protection you need. When selling you an extended warranty, suppliers are required to inform you of the difference between what an extended warranty offers and your consumer rights under the Consumer Guarantees Act. If you claim on an extended warranty, it may expire, depending on the warranty’s terms and conditions.
Manufacturers’ guarantees under the Consumer Guarantees Act
Under the CGA, manufacturers and importers also guarantee that:
- spare parts and repair facilities will be available for a reasonable time (including second-hand products from overseas that are first supplied to you in New Zealand)
- they will honour any express manufacturer’s written warranty that comes with their products
- the products are of acceptable quality
- the products match any description given (labelling or packaging).
Even if the manufacturer's written warranty has expired, the manufacturer will still be responsible if the products are faulty and not of acceptable quality for products of that type.
But, the manufacturer can contract out of the part of the guarantee that covers the availability of spare parts. To do this, they must let you know via the supplier at the time of purchase that repair facilities and spare parts are not available.
The manufacturer is also not liable if the problem is caused by someone other than the manufacturer or their agent, or by an event outside their control, such as an earthquake.
Manufacturer's warranty or express guarantee
A manufacturer does not have to provide a written warranty (express guarantee) with their products. But if they do, they must meet the terms and conditions of the warranty.
This can be useful when you buy products privately and they are still under the manufacturer’s warranty. You can claim a remedy from the manufacturer if you get the warranty and original receipt from the private seller.
If you have a current manufacturer's warranty, you must give them the opportunity to fix the problem first. This may be doing repairs or providing an identical replacement (according to what the guarantee sets out). If they fail to do so or refuse to do so, you may bring a claim for damages from the manufacturer, under the CGA, for any drop in the value of the products and the price paid by you or the average retail price at the time of supply (whichever is lower).
You will need to check the terms of the manufacturer’s warranty carefully to see who pays for freight on the return of products and what other terms apply to any claim.
If the manufacturer or importer has gone out of business, a supplier does not need to meet the responsibilities set out in the written manufacturer’s warranty. However, you still have rights against the supplier for any problems with consumer products or services.
In addition to the manufacturer's warranty, you still have rights under the CGA.
At the time you buy your extended warranty, the retailer must give you a written agreement that is clear and easy to understand with:
- a summary of your rights under the CGA compared to the extra rights you’ll get under the extended warranty
- your right to cancel within five working days if you change your mind, and how to cancel
- the warrantor’s name, street address, telephone number, and email address.
Other terms that must be set out include the:
- rights and obligations of the business providing the extended warranty (sometimes it’s the retailer, sometimes it’s another business)
- date the agreement starts, duration and expiry date
- total price you’ll pay over the full period of the agreement.
Extended warranties(external link) — Commerce Commission
The warrantor should also tell you about the right to cancel the agreement within five working days of receiving a copy of it and explain how to go about cancelling it.
You can also cancel at any time if the warrantor has not met all of its disclosure obligations described above.
You must give notice to the warrantor (verbally or in writing) that you wish to cancel. You must use the contact details the warrantor provided under the written disclosure, or in any other way that the warrantor and you agree you can communicate. Once the agreement has been cancelled, the warrantor must repay the cost of the warranty to you without making any deductions from the amount paid.
If there is a minor breach of the disclosure rules and you are no worse off, you can’t cancel after the five-day period.
If things go wrong
You have different options if you have a problem with consumer products. This depends on your circumstances and if:
- you are relying solely on the consumer guarantees under the CGA
- the products also come with a manufacturer’s warranty
- you bought an extended warranty.
Contact the retailer, manufacturer, warrantor or lender
You can claim a remedy directly from the business that sold you the products even if you have a manufacturer’s warranty. You do not have to contact the manufacturer, a repair person or any other third party. If the seller tells you to do that, they are likely to be in breach of the Fair Trading Act (FTA) by misleading you about your rights.
However, if the supplier or trader has gone out of business or you bought directly from the manufacturer or importer, you will need to contact the manufacturer directly.
If you have an extended warranty, contact the warrantor (may be the shop or another business). Advise them as soon as possible after you discover a problem with the products or services.
If the supplier has gone out of business, you may also contact the finance company if you bought the products on credit from that finance company and they are faulty.
If you are unable to resolve your issue directly with the retailer, manufacturer or service provider, our Resolve It tool has information to help you take the next steps. These may include going to the Disputes Tribunal or District Court.
> Resolve it: Faulty products and services
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Bridget buys a new smartphone from a retailer. She pays an extra $100 for an extended warranty to cover her for one year if she drops the phone and has to replace it. However, she also has home and contents insurance that would cover accidental damage to her smartphone so the extended warranty is not necessary. Bridget would have five days from the date of purchase of the extended warranty to cancel the warranty and get a full refund of her money.
Devlin has new curtains installed at home. They come with a manufacturer’s warranty that will last for five years, as they’re hard-wearing and durable. During this time, the curtains fade in several places and Devlin is not happy with their appearance. He brings the curtains in and the retailer sends them to the manufacturer to inspect and replace in accordance with the warranty.
Spare parts available
Paul buys an expensive wheelchair that is imported from Japan from a local mobility store. After two years, he needs to get two of the wheels replaced because of wear and tear. He finds out the shop can’t source the spare parts easily in New Zealand. He reminds them that under the Consumer Guarantees Act they will have to honour the guarantee to have spare parts available for a reasonable time. It is not unreasonable to expect spare parts to be available two years after the sale.