Purchasing Extended Warranties on Products

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If a warranty or extended warranty is included in the sale price and not charged separately in another transaction, there is no issue with such a warranty.

For example, if a fridge is sold for £500 and includes a one-year warranty, this is permissible. Offering warranties or guarantees for fixed periods has become a customary practice in transactions and is therefore permissible (Bahār-e-Sharīʿah 11/701).

However, purchasing an extended warranty separately is not permissible, as a warranty is not a tangible product that can be bought or sold. It is merely an abstract right (haq mujarrad), which cannot be sold as a standalone transaction.

For example, if a fridge is priced at £500 with a one-year warranty included but an additional two-year warranty can be purchased for £100, this extra charge is a separate transaction, distinct from the original sale price of the fridge. It is also typically listed as a separate line item, clearly indicating that the £100 is being paid specifically for the extended warranty. Such a transaction is impermissible.

Some mistakenly believe that purchasing an extended warranty at the same time as the product makes it part of the sale price and therefore permissible. This is incorrect. If the extended warranty is explicitly listed with an additional cost beyond the product’s sale price, then it remains impermissible, regardless of whether it is purchased simultaneously with the item.

In the example you provided, buying a computer for £700, which includes a one-year warranty at no extra cost, is permissible, as the warranty is part of the product’s price. However, paying an additional £50 to extend the warranty to two years is not permissible, even if the payment is made at the time of purchase. The fact that the £50 charge is specifically for the extended warranty shows that it is a separate transaction, distinct from the sale price of the computer.