Is AppleCare Extended Warranty Coverage Worth The Cost? – The ‘Book Mystique

People purchasing or receiving Apple hardware products as Christmas gifts, have a decision to make (although not necessarily right away) as to whether they should buy AppleCare extended warranty coverage.

An affirmative argument in favor of getting AppleCare is that current Apple devices are difficult and expensive to repair, so it’s better to have coverage and not need it (the likeliest scenario) than to need it and not have it during the one (iPads, iPhones) or two (Macs) subsequent years after the basic 12-month Apple warranty expires.

On the other hand, another school of thought, to which this writer belongs, holds that Apple hardware leads the industry in build quality and reliability, and that any defects will most likely to show up during the initial year of use, making AppleCare an arguably expensive type of insurance against improbable and remote possibilities from an actuarial perspective. For example, on an $899 or $999 MacBook, AppleCare coverage costs $250, adding a whopping 28%/25% respectively to the cost of the computer.

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In an op-ed earlier this month, WSJ’s Geoffrey A. Fowler argues convincingly that most computer device extended warranties are a bad deal and some an outright rip-off. I’m sure he’s not including AppleCare in that latter category, as it’s an excellent insurance product offering impeccable service should it be needed, but the point is that in the vast majority of cases, it won’t be.

I’ve never bought AppleCare for any of the going-on two dozen Mac portables and iDevices I’ve bought since 1996, beginning with a PowerBook 5300. So far I’ve had exactly zero problems that AppleCare would have addressed -with any of these machines, ‘nor for that matter have I ever made a warranty claim under the basic 1 year warranties on any of them.

I don’t buy extended warranties on household appliances or vehicles either, and have never had cause to regret it. Maybe I’ve just been fortunate; my anecdotal experiences represent a statistically insignificant sampling, and there are many folks out there who say they’re thankful they did purchase AppleCare. I’m glad for them, but in a general context I’m still convinced that extended warranties like AppleCare are a poor investment.

I’m in essential agreement with University of Chicago Booth School of Business Professor of Behavioral Science and Economics Richard Thaler and Professor of Law at Harvard Law School Cass R. Sunstein, who say in their book “Nudge: Improving Decisions About Health, Wealth, and Happiness”:

“On our assumptions, the extended warranty is a product that simply should not exist. If Humans realized that they will be paying twenty dollars for two dollars’ worth of insurance, they would not buy the insurance. But if they do not realize this, markets cannot and will not unravel the situation. Competition will not drive the price down, in part because it takes the salesperson a while to persuade someone to pay twenty dollars for two dollars’ worth of insurance, and in part because it is difficult for third parties to enter this market efficiently.”

Another thing to consider before purchasing an extended warranty is that many major credit cards will double the manufacturer’s warranty period (often capped at one or two years) on purchases made with their card. However, if you use your computer for work, be sure to read the fine print, since most credit card warranty extensions don’t apply to machines used for business purposes.

Most Warranty Issues Happen In The First Year

As previously noted, the strongest likelihood is that any warranty issues will occur during the first year, in which case you’re covered anyway. The second one or two years of extended coverage you pay for with AppleCare are more of a dice-roll, although given the general reliability of Apple portables, if your Mac or iDevice 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 relatively low (although it could of course still happen).

From my own experiential perspective, had I purchased AppleCare for each of the Apple hardware devices I’ve purchased over the years, I would have by now spent more than the price of a new MacBook Pro, with no benefit to show for it, which is part of the philosophical equation that has dissuaded me from ever buying AppleCare. At this point, the money I’ve saved over the years by assuming repair risk after 12 months is more than enough to replace any of my Apple devices should one of them experience a catastrophic failure.

Telephone Tech Support Also Extended

There is another factor to consider pertaining to AppleCare. I’m tech-savvy enough that I don’t have a lot of interest in extended Apple tech support (Apple’s standard phone tech support on new machines expires after 90 days.). Over the years, I think I phoned them once or twice about the PowerBook 5300, but I was a lot newer to Apple laptops then. On the other hand, for some users the tech support lifeline can be very helpful, and that should be part of the AppleCare purchase deliberation.

Don’t Buy Until The Deadline

Note well that even if you’re interested in buying the AppleCare Protection Plan, it’s 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 that extended phone tech support.

The AppleCare Protection Plan can be purchased anytime 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 (Apple Certified Refurbished), or still be under Apple’s limited warranty to qualify for Protection Plan coverage.

In conclusion, if you’ll sleep better knowing you have AppleCare coverage, don’t let me persuade you contrariwise. The degree of risk one is comfortable assuming is a personal decision, and actuarial probabilities notwithstanding, with any mass-produced product there will always be a percentage of lemon units, so if you do decide to roll the dice, be aware and prepared to accept that once in a while they turn up snake-eyes.

For more information about Apple’s AppleCare Protection Plan, visit:
http://www.apple.com/support/products/

And a Merry Christmas to all!

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