Date: 7 February 2012

The Office of Fair Trading (OFT), the government consumer watchdog, is concerned that you may not be getting full value for money if you buy an extended warranty.

An extended warranty is a form of insurance for goods, so that if your goods break or are damaged, you can get them repaired or replaced at no extra cost.

You'll typically be asked if you want to buy an extended warranty when you buy products such a washing machine, a TV or a laptop. However, you're often not given enough information to work out whether you really need a warranty and if you could get a better deal elsewhere.

Here are some top tips if you're thinking of getting an extended warranty:

• it's optional – you don't have to buy it - if the goods you buy turn out to be faulty, you're entitled to get a refund, a repair or replacement from the shop you bought the goods from whether you have a warranty or not
• think whether you're likely to need it – many goods cost less to replace than the cost of the warranty
• check if you're already covered -- you're likely to be covered for the first year by a free manufacturer's guarantee, or you could be covered by your home contents insurance policy
• shop around – you don't have to buy a warranty from the same place you buy your goods from. It's often cheaper to get a separate insurance policy elsewhere
• ask for full details of what you'd be covered for – if you think it's still worth it, you have up to 30 days to buy the warranty from that place
• you can change your mind about a warranty you've already bought for domestic electrical goods – you have up to 45 days to cancel this type of warranty.

Some retailers have promised to improve the way they sell extended warranties. This could include setting up comparison websites and providing more information in-store about other providers.

The OFT is now considering whether these measures go far enough or if more needs to be done to give consumers the information they need to make an informed choice.

To find out more about extended warranties, go to the OFT website at www.oft.gov.uk.