Are Extended Computer Warranties Worth the Cost?

2000: Apple Computer has revamped and enhanced it’s AppleCare Protection Plan extended warranty, which now provides two extra years of service and support for your Mac at a flat rate price, including telephone support, bundled third-party diagnostic tools, Apple-certified repairs, and 24-hour-a-day Internet support.

But are extended warranties like AppleCare worth what they cost?

In 1997, Consumer Reports surveyed the experience of readers who had purchased extended warranties on electronic equipment. On average, consumers had paid about as much for the extended warranty, by the time the product needed service or repair, as the average repair cost for a product of that age. In most categories of electronic products, fewer than 25% of units surveyed had required repairs within five years.

One thing 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.

Another possible alternative is to take the money you would have spent on purchasing an extended warranty and invest it. If you do need service or repair after the original warranty runs out, you can cash in your investment to help pay for it, hopefully with some interest or capital gain added. However, if your Mac survives the initial 12 month warranty period with no repairs needed (as is most likely), or is repaired during the first year, the probability of it needing repairs during the subsequent two years is very low (although it could happen).

However, most computer problems show up early on, and the likelihood is that your “repair fund” money can remain invested until such time as you upgrade to a new system, at which time you could put it toward the new computer purchase or keep it socked away against potential out-of-warranty repairs on the new machine. However, at the price (see below) Apple is offering AppleCare extended coverage at, on iMacs in particular, the “self-warranty” argument becomes a lot less convincing.

Personally, I’ve never purchased Apple’s extended AppleCare warranty coverage for any of my Macs. It always seemed too pricey given the remote likelihood of catastrophic hardware failures after a machine had proved itself reliable over a year’s use under the original warranty. Of course with Apple’s new, revamped AppleCare Protection Plan, the price is more reasonable and you get more than just extended repair coverage, and if the 24-hour online tech support or direct telephone access to Apple’s Technical Support group appeals to you, then go for it. (Apple’s standard phone tech support on new machines expires after 90 days.)

Purchasers of the AppleCare Protection Plan also receive a CD containing TechTool Deluxe software from MicroMat – a software utility that tests the major components of your Apple system, including processors, RAM, and hard drives. Tech Tool Deluxe also checks software and can help users diagnose and fix many software conflicts themselves. The standard version of Tech Tool Pro sells separately for about US$90).

The AppleCare Protection Plan covers the following Apple products:

  • iMac computers
  • iBook computers
  • Macintosh PowerBook computers
  • Power Macintosh and Macintosh Server computers
  • Apple displays purchased as part of Power Mac and Macintosh Server systems
  • Apple displays purchased separately

The AppleCare Protection Plan can only be purchased while your computer is still under its original one-year warranty. All covered systems and covered Apple peripherals must either be new or newly refurbished (by Apple) or still be under Apple’s limited warranty to qualify for Protection Plan coverage. The Power Macintosh G3 Series box includes coverage for an external Apple display, at no additional charge, if it is purchased at the same time as the CPU and used with the covered system. All current models of Apple displays are eligible. The Apple keyboard and mouse are covered if purchased at the same time as the covered system with which they are used. The AirPort Base Station and AirPort Card are included in the CPU coverage with which they are used.

The AppleCare Protection Plan is not renewable at the end of the three-year term, and it lasts for a maximum period of three years from the date of computer purchase, regardless of when the Protection Plan is purchased (either with the hardware or later during the warranty). The extended service period begins on the date the product’s Apple warranty expires, and extended telephone support begins on the date the complimentary new product support expires. The AppleCare plan is transferable to the new owner if you sell your Mac.

Note well, that if you are interested in the AppleCare Protection Plan, it is in your best interest to wait until the 12th month of ownership before purchasing, rather than buying the coverage when you purchase your computer, unless you really need or want one of the enhanced services or the TechTool utility.

Sample AppleCare plan prices:

  • iMac, US$149
  • iBook, US$229 (CDN$239)
  • PowerBooks, US$299 (CDN$329)

The iMac coverage looks like an especially good value. Indeed, if you subtract the value of the Tech Tool Pro Utility, your cost per year for the two extra years of warranty protection work out to about $30 apiece. Not bad, even for an extended warranty skeptic like me. Also worth considering is that while the PowerBook extended warranty is less of a bargain, PowerBook repairs, if you do need them, tend to be pricey.

Visit Apple’s site for more information about Apple’s AppleCare Protection Plan.

Publisher’s note: I am also generally a skeptic about extended warranties, but when I bought the brand new, freshly designed 15″ Titanium PowerBook G4 in January 2001, I chose to go with AppleCare. I only had one repair during the extended warranty period, but since it involved replacing the display, the savings compared to the cost of the repair was significant.

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