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Co-operative Electrical has said it is launching a new system of much cheaper extended warranties and will make no profit if buyers of TVs, washing machines, fridges, and other goods take out insurance.

The company said consumers will be offered a one-off payment of less than £80 on a £400 washing machine, compared to some warranties costing as much as £390.

The group said the warranty market for electrical items is worth an estimated £1 billion a year in the UK, with consumers sometimes paying almost as much for a warranty as for the product.

James Holland, managing director of Co-operative Electrical, said: "A significant number of consumers seek the reassurance offered by an extended warranty.

"However, we believe that this market should be easier to understand and represent real value, particularly when you compare the price of the warranty with the actual price of the electrical product. In most cases it is just far too expensive.

"In line with our group purpose, we are championing a better way of doing business by providing at-cost extended warranties which offer real added benefits for those consumers that want peace of mind."

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