Miscellaneous Ramblings

To AppleCare or Not to AppleCare?

Charles Moore - 2006.11.20 - Tip Jar

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In Why You Don't Need An Extended Warranty, Consumer Reports' says that extended warranties are a "notoriously bad deal" for most consumer products.

That has long been my contention. For example, in 2001 I bought a Samsung VCR from Sears on sale for C$95. I didn't buy the extended warranty, but when the machine was nearly a year old, Sears customer service phoned to ask if I would like to lock in extended coverage before the one-year warranty expired.

"How much will that cost?" I queried politely. The answer was something like C$75. "But I only paid $95 for the machine," I responded. "Does spending more than three-quarters that figure on extra warranty coverage make sense to you?"

The person at the other end agreed that it probably didn't. The VCR is still working fine after five years of service. If it breaks, you can get higher-spec ones today even cheaper.

Consumer Reports notes that retailers push extended warranties and service plans hard because they boost profits substantially. Stores typically keep 50% or more of what they charge for extended warranties, which is a lot more margin than they get selling actual products.

However, CR reasons that it's relatively unusual for products to break within the extended-warranty window (typically around three years) based on their research data, and if they do break, repairs (or in the case of my VCR actual replacement) often costs about the same as the cost of the warranty.

Indeed, I've never purchased an extended warranty for anything, including AppleCare for the new Apple computers I've bought over the past 14 years, but interestingly, one of the exceptions Consumer Reports makes to it's "don't buy extended warranties" advice is AppleCare coverage for an Apple computer - because it includes extended tech support and Apple only offers a stingy 90 days of free phone phone tech support.

Well, it's an argument. Whether it makes sense for you depends on your risk tolerance and to a large degree a roll of the dice. The last time I used Apple phone support was in 1997, and as I recall, they weren't a whole lot of help - I knew more about the problem than they did. However, a single anecdote is just that, and if you anticipate needing phone support beyond 90 days, perhaps CR's advice is sound for you, but it's expensive hand-holding.

Current US AppleCare plan prices:

  • Mac mini, $149
  • iMac/eMac, $169
  • MacBook/iBook, $249
  • Power Mac/Mac Pro, $249
  • MacBook Pro/PowerBook, $349

AppleCare coverage includes:

  • Extends telephone technical support from 90 days to three years from computer's purchase date
  • Extends hardware repair coverage to three years from computer's purchase date, including:
    • Onsite service for desktop computers (not available in all locations)
    • Global repair coverage
  • Provides dedicated access to web-based support resources=
  • Includes diagnostic software tools (TechTool Deluxe from Micromat)

Note that while the MacBook Pro/PowerBook extended warranty is more expensive, notebook repairs (if/when you do them) tend to be pricey. I've been fortunate, I guess. Most of my Macs have been portables, and the only major component failure I've has was a fried processor in my WallStreet PowerBook - but that happened at 3.5 years, so AppleCare wouldn't have helped anyway.

Even my 700 MHz G3 iBook, which statistically is one of the most problem-prone laptops Apple has made, has been trouble-free for nearly four years now. I pondered buying AppleCare for it but decided against, and I'm none the worse for it.

Consumer Reports says laptops have among the highest repair rates among the products they track, with 43% of three to four-year-old machines requiring repairs. But as with my WallStreet, many of these problems occurred outside the coverage period of a typical computer extended warranty anyway, and a sizable proportion of them would be due to drops or liquid spills - accidents that extended warranties usually don't cover.

Double Your Warranty for Free?

Another point to consider before purchasing an extended warranty is that many major credit cards will double the manufacturer's warranty period (often capped at two years) on purchases made with their card. However, be sure to read the fine print. My credit card company will double the warranty on a computer purchased, but not on machines used for business purposes, such as my PowerBook.

The phone tech support issue aside, if you buy an expensive machine like a 17" MacBook Pro and the big screen or the logic board fails (as unlikely as that would be statistically), you'll thank yourself for having ponied up for AppleCare.

On the other hand, with a MacBook, like the the iBook, before it, I'm inclined to the view that AppleCare makes little rational sense. AppleCare coverage for a US$1,100 MacBook costs $250, or about 22% of the cost of the computer.

  • Mac mini, $149* - 18-25% of retail
  • iMac/eMac, $169 - 8.5-17% of retail
  • MacBook/iBook, $249 - 17-22% of retail
  • Power Mac/Mac Pro, $249* - 10% of retail, 2.66 GHz model
  • MacBook Pro/PowerBook, $349* - 12.5-17.5%
* also covers one Apple monitor purchased at same time as computer

IMHO, the MacBook and Mac mini have pretty much become "disposable" computers in the sense that out-of-warranty major repairs make less sense than with PowerBooks. Replacing a bad logic board or broken display will most likely run you close to or even more than what you can get a refurbished example of the same model for - and with a fresh one-year warranty if you buy an Apple Certified Reconditioned machine. Currently, Apple Certified Refurbished 1.83 GHz Core Duo MacBooks are selling for just $850 with a full year warranty, 90 days of phone tech support, and yes, AppleCare eligibility.

However, if you'll sleep better knowing you have AppleCare coverage, don't let me talk you out of it. The degree of risk one is comfortable assuming is a personal matter, and statistical probabilities notwithstanding, with any mass-produced product there will always be a percentage of lemon units - so if you do decide like me to roll the dice, be aware and prepared that once in a while they turn up snake-eyes.

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Charles Moore has been a freelance journalist since 1987 and began writing for Mac websites in May 1998. His The Road Warrior column was a regular feature on MacOpinion, he is news editor at Applelinks.com and a columnist at MacPrices.net. If you find his articles helpful, please consider making a donation to his tip jar.

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