More info on CPU

Actively securing computer equipment for total peace of mind

When you have a need to buy a computer or have it in safe hands when it's stolen or needs repairing you'll understand how important it is to feel comfortable with the company who will be taking care of it for you.

At CPU we understand that, which is why we'd like to show you a glimpse into our background so you can see how we've risen to our current position as the leading provider of computer insurance and insurance warranties in the UK.

Mission statement

"to take the risk out of, and to add greater value to computer retailing"

Background to CPU

CPU’s principal activity was the provision of sales-aid leasing facilities to computer manufacturers and resellers this lead us naturally into providing warranty and insurance covers to you, the public. During 1995 and 1996 a hard-core of some 30 dealers were approved. The strength of CPU lies in a number of key areas.

Providing easily accessible support

The management of the company determined that its growth and the support it provides continually would not be dependent on an ever increasing number of staff. Accordingly it has, and continues to, invest significantly in computer systems to ensure that, wherever possible, processes and communications are automated ... making the time it takes you to deal with us efficient and effective.

Care and attention to customers and suppliers

Quality customer service is always recognised as one of the most important attributes of the company. This is apparent in the care and attention given to each supplier and customer, not only at the inception of the relationship, but on an on-going basis, day in and day out.

The management ensures that, not only does it fully understand the products that it is offering to suppliers, but that it also understands the business of those suppliers. This ensures that the products are tailored to meet the needs of suppliers and their customer's.

CPU believed that its own growth and development would come as a direct result of working with the dealers in assisting them in their own development by offering value added products and services.

During 1997, CPU recognised that a number of its existing computer dealers were not offering an extended warranty capability to their customers. Tier l laptop suppliers, such as Toshiba, Compaq and IBM had the resources to offer an extended warranty on an onsite basis. Tiers 2, 3 and other clone manufacturers/resellers were left without an extended warranty to sell and thus could only compete with the Tier 1 suppliers on price.

Notwithstanding that, failure rates are broadly the same across the board. It was also found that in practice, only 30% of the repairs could be effected onsite, due to the lack of training of the maintainers, who were competent to repair desktop computers but lacked the required skills for laptops.

This left customers overpaying for a service that generally couldn't be delivered. Added to that, the failure rate on laptops was, and still is, very high compared to desktops and the average cost of repair had been underestimated when the warranty pricing had been fixed.

CPU recognised that there was a large demand for warranties, and saw that customers, like you needed to have guaranteed comfort that their machine would always be repaired at no additional cost.

So, in the first quarter of 1997, CPU launched the first insurance backed laptop warranty scheme in the UK, sold through dealers on a sales-aid basis. The insurance is provided by Lloyds of London and other 'A' rated insurers. For the first time, CPU's dealers were now able to offer an extended warranty which allowed them to compete with the Tier 1 suppliers and, in many cases, to significantly grow their businesses.

The 1997 Budget created a potentially damaging situation, requiring a higher rate of Insurance Premium Tax (IPT) of 17.5% to be charged when the insurance was being retailed at a higher price than the dealer was buying it in for. This significantly increased the price to the dealer who had only been paying 4% IPT up till then. Unfortunately IPT is not recoverable by the dealers. After much research and advice, the CPUser Group was conceived which allowed CPU to charge the dealers 17.5% VAT, rather than IPT, which they could recover from the Customs and Excise in the normal way and we believe our scheme is unique in the marketplace.

Having achieved success in the notebook market CPU turned its attention to the desktop sector

The significant increase in the number of desktop purchases in the late 1990s, also saw the emergence of large numbers of desktop suppliers. Although accurate figures are not available we believe the figure is between 5,000 and 10,000. Yet again we have seen and continue to see many of these going out of business having sold warranties that are now worthless to the customer.

CPU researched the market thoroughly and in 1998 it launched the first insurance backed scheme to cover the manufacturer's warranty period as well as offering insured extended warranty cover for subsequent years. Our customers are now able to purchase their equipment with full insurance backed cover against hardware failure for up to four years.

In the first quarter of 1998 CPU started “CPU Direct”, its first offering of its products direct to the public. This was launched as a joint initiative between CPU and Computer Shopper, the largest circulation computer magazine in the country, where a full page endorsement of the product range appeared in each issue so that you, the public could gain benefits from having access to the retailer's supplier.

1999 saw CPU forming relationships with consumer finance, credit card and invoice discounting organisations. Each of these sectors were becoming extremely nervous as a result of computer suppliers ceasing to trade leaving them fully exposed under Section 75 of the Consumer Credit Act. (Further details of this can be found in the Finance section on this site). Due to CPU's considerable experience in the computer marketplace, we have been able to offer a very cost effective solution in two ways.

For those companies that have already failed, we have put our insured warranties in place to maintain customers' expectation of having their machines maintained during the manufacturer's warranty period. For the finance house this ensures that their customers continue to make their repayments as required.

Secondly, in order for the finance houses to maintain their presence in the computer sector and more importantly to expand their business in this area, they have turned to CPU to ensure that their clients are fully underwritten by CPU for the period of their exposure.

CPU is determined that customers buying computers will have the peace of mind they demand and that those suppliers who use CPU products will see their businesses develop and flourish.