Deliveries, set-up costs, interest, insurance — add up the costs when buying appliances and devices.
Think carefully about cost — the price tag of your new device or appliance, plus any extras. Examples include:
- optional delivery costs
- optional installation / set-up costs
- optional tech support or extended warranties
- set-up fees and interest — and sometimes payment insurance — if you buy on credit.
Contents insurance generally covers most devices and appliances. Check what you can claim for and what items need to be named on your policy. Avoid doubling up on cover you may already have, if you're offered insurance in-store.
If you buy on credit and there's a problem — with your device or appliance, or your repayments — talk to the retailer or finance company as soon as possible.
Delivery and set-up costs
For bigger or more complicated devices and appliances, eg fridge-freezers or smart TVs, you might need help with delivery or installation — especially if:
- you don't have suitable transport or muscle power
- you are not confident about how to set up and use it.
You could ask a friend or family member to help. If that's not possible, you can:
- use the retailer's delivery and/or installation service
- get a quote from a trusted expert, eg a plumber for a washing machine.
For more detail, including your rights if something goes wrong, see:
Retailers often offer service and support packages — and extended warranties — when you buy devices and appliances. Check the fine print. Are the extras worth paying for?
Your rights compared
Buying on credit
Saving up is the savviest way to buy something new. But that's not always an option, eg your washing machine packs up and you need a new one right away.
Spreading out payments over time can be an affordable way to buy big-ticket items. This is buying on credit — also called credit contracts or credit sales. Examples of this way to pay include:
- credit card or finance card, including interest-free offers
- hire purchase
Like any other type of borrowing, there are risks. Work out how your income or spending might change while you're paying it off, eg rent increase, switching jobs. If offered an interest-free period, ask yourself if you can pay it off before the interest goes up. Once the zero-interest period is over, interest rates can be high.
Also think how you'll avoid the temptation to spend more.
Your finance company might offer to increase your credit limit. Because you don't have to pay it off immediately, you might buy more than you can afford. That new TV might become a TV and a blueray player, or a much more expensive TV. With electronic products especially, there's pressure to buy the latest model.
Check for hidden fees, eg if you want to make extra payments or pay it off early. And if you don't pay on time, you might end up paying extra interest (compound interest).
Price + extras = true cost
When you pay by credit or with a loan, your new purchase can cost more than what's on the price tag. Remember to add on:
- set-up fee
- payment protection insurance, if required by your lender.
Don't focus on the minimum payment each week or month. Add on all extra costs to see the total you will pay, eg a $1,200 TV may seem affordable at $16 a week over two years. But add up the interest and fees, and you may find the true cost is an extra $400-500.
How to work out true cost
Example — Tempted to overspend
Sara buys a TV on interest-free credit. Her finance company puts her debt onto a credit card she can use for other things, including withdrawing cash. Sara uses it to buy groceries, coffee each work day, and a pair of shoes. Then she subscribes to a TV streaming service. It's a shock when she eventually checks her balance — she now owes double the amount. She puts the card in a drawer to curb her spending.
Change of mind
You can cancel a credit contract within five working days.
But you will have to pay the full price of your device or appliance upfront. You haven't cancelled the sale, just the agreement to spread out the cost over time.
If there's a problem
Don't just stop payments. Your next step depends on what's gone wrong:
- If the device or appliance stops working properly, ask the retailer for a repair or replacement.
- If you can't afford your payments, talk to the retailer or finance company about reducing the amount to pay each week or month.
Falling behind on payments means you might be charged penalty interest. If you fall too far behind on payments, your lender might repossess your device or appliance.
For more detail, including what to do if things go wrong, see:
Hire purchase and buying on credit
Laybys and buy now, pay later
Example — Loan insurance
Tim buys a new games console on hire purchase. The retailer tries to make him take out redundancy insurance as part of the credit contract. Tim does not currently have a job, so he turns down the extra insurance.
Buying on credit(external link) — Citizens Advice Bureau
Buying a device or appliance is usually expensive. And if it gets lost, stolen or damaged, eg in an earthquake, that's also expensive. Consumer law doesn't protect you in these cases — that's where insurance comes in.
Contents insurance is likely to cover most devices and appliances against loss, theft and damage in natural disasters. Accidental damage might be covered. Check what you can and can't claim for — and if you need to list items over a certain value, eg an expensive computer, phone or TV. Be aware some insurance companies cover technology for a set time.
You might be offered insurance when you buy a new smartphone. But it's more common for retailers to try to sell extended warranties or service/support packages. Only consider buying these if the extra support or protection is not already covered by either:
- consumer laws
- manufacturer's warranty
- contents insurance, if you have it.
Check your insurance policy. How much do you have to pay yourself (the excess)? Will you lose a no-claims bonus?
Disputing a refused claim
If your claim is refused and you disagree with your insurer's decision, first take it up with their complaints team. If you can't reach an agreement, you can take it up with the insurer's external dispute resolution scheme, eg Insurance and Financial Services Ombudsman.
Insurance and Financial Services Ombudsman(external link)