To AppleCare or Not to AppleCare

AppleCare – The extended warranty that salespeople will try to sell you when you buy a nice new Apple computer. I know, its Apple so you want to think its actually good and worthwhile but lets face it, AppleCare is just an extended warranty. Like any other warranty that a salesperson at any electronics store, car dealership, or department store will try to sell you, its a numbers game and if it didn’t work in Apple’s favor, they wouldn’t offer it.

Lets look at the pros:

Free warranty repairs:
How horrible is it when the computer just breaks for no reason at all. It happens, and when it does, all you can think is “I swear, I didn’t do anything”. Then your next thought is “this is going to be expensive”. This is a nice feature of AppleCare – for the second and third year of your computer’s life-span, you will have free warranty repairs. Note that I said – the second and third year….

Peace of mind:
For a non-technical user, who may have some anxiety over a computer repair, the peace of mind offered by AppleCare is well worth the price. Its easier for them to just send it to Apple and be done with it. However, as we’ll see in the cons, all is not as tranquil as we hoped for.

Now lets look at the cons:

AppleCare does not cover user damage:
Dropped laptop? Cracked screen? Spill something on it? Knocked the nice iMac over? Don’t even think of bringing it in to Apple or a repair center without paying for it. AppleCare specifically does not cover user (physical) damage. If you spilled anything on the computer or dropped it, be honest because they will know when its opened up.

Apple’s repairs are not cheap. One way to lower the cost would be to use an authorized repair center over Apple themselves. Repair centers may fix something for $400-$500 when Apple would be charging $750. I’d get an estimate first from both of them. Either way, you’ve already saved about $250 if you skipped AppleCare because they wouldn’t be covering damage anyway.

Note:If you send your computer to Apple and you refuse the repair because its too expensive, you may be charged a $100 diagnostic fee. You will also charged for the shipping. I’d take it to the Apple Store to see if its a covered repair or not before sending anything to them.

AppleCare does not cover warranty repairs if it LOOKS like user damage:
This is where things get tricky. Say your display stopped working and its a no video issue. Motherboard is determined to be bad. Fair enough, normally this would be a warranty issue with no questions asked. However months or even years before, you bumped or dropped the computer and now there’s a small crack in the casing. Since then, its worked fine. Now this had nothing to do with your problem.. or did it? Apple will flag this as user damage and charge you for the repair. Sucks, doesn’t it?

Your best bet of dodging this one is to use an Authorized Service Center. They may be able to either do the repair cheaper or they may overlook the crack. Again, make sure you get an estimate before they do any work you will be charged for.

AppleCare actually only covers year two and three:
Here’s the dirty little secret of AppleCare. Year one is covered by Apple automatically. This means if a part dies after a few months (but under one year), Apple will fix it for free as long as its a warranty repair (same as AppleCare).

The other part of this little secret is that your computer is most likely to show manufacturer defects within the first months to a year. You also have until that one year is up to purchase AppleCare for your computer.

So, if it looks like you’ve got a lemon thats been in and out of repairs for its entire first year, get AppleCare so they will cover the next two years as well. If you haven’t had any problems and you take care of the computer, consider skipping the AppleCare, you may not need it.

AppleCare lasts only three years:
AppleCare ends three years after you bought the computer. This is perfectly understandable from Apple’s point of view, for them it is more of a cost to fix warranty issues than the computer is worth. Honestly, in terms of a computer’s life, after three years it is on its way to obsolescence.

For you though, this sucks. After three years, the computer is older and worn a bit from years of use. Like an older model car, it is more likely to break down than the new model. AppleCare won’t cover those repairs anymore.

After three years, more cost effective replace and sell the old machine:
After three years, your computer is well on its way to being obsolete. Its not old enough yet to technically be obsolete but it won’t be long. Newer models are out for the same price that you paid for yours, years ago. Your computer, as much as you may love it, is depreciating.. fast.

Instead of sinking $500 or so into a computer that AppleCare won’t cover, use that towards a new machine and sell the old one for parts. There is a huge market for older computers being sold as parts. Take advantage of this, your computer is still young enough to fetch a good price as parts.

For example, if you never bought AppleCare and never needed it, that’s $250. Now, say you can sell your old computer for parts and can get $250-$300 for it. Add that to the $500 for your repair and you’ve got nearly enough for new computer. You’ll get a free year of warranty and the latest technology.

Tech savvy people can do the repair themselves:
So, what happens when you didn’t get AppleCare and there’s a problem? Someone technically inclined can do the repair themselves. Depending on the repair, it may be easy or it may be difficult. Generic parts (Hard drives, memory) are much cheaper than Apple charges for the same parts.

Most of the charge on a difficult repair is labor so if you can do the job, go for it. The website has instructions of how to fix most laptops (and iPods). Desktops are pretty straight forward.

    IMPORTANT: If you bought an iMac… Take it to a repair center. I don’t recommend working on any model of iMac unless you are seriously technically inclined and are aware of all the special little things iMac repairs require. Take it to an authorized repair center. At least, if your iMac lasted the first year with no warranty issues, there’s a great chance it will go the next two years without covered warranty issues as well.

Extended warranties are a money maker:
Let’s face it. Why are extended warranties so popular with manufacturers? Why does that Best Buy, Circuit City, Sears, or any Car, Computer or Electronics salesman push for the warranty so hard when you buy something there? They make them a ton of money. That’s why.

The cost of that warranty is factored into the chance that you will actually use it. This means that only a certain percentage of people will actually use it (the costs of their repairs) vs what everyone paid for the cost of the plan.

If Apple had more repairs than money that AppleCare brought in, one of two things would happen: Either the cost of Applecare would go up or the coverage would go down. Remember, the first year of warranty is free when you purchase the computer. If properly addressed, a repaired warranty issue from the first year most likely will lead to a stable working computer for the next two.

In terms of percentages and “the big picture”, the chance that you will need an AppleCare covered repair is much lower than Apple’s cost to repair that computer. Of course, this means you have to take care of the computer.. Don’t forget, if you didn’t take care of the computer, the repair isn’t covered anyway..

The bottom line is that extended warranties are very profitable for companies. That’s why they push them so hard.

What should you do?
If you want AppleCare – that’s fine. This isn’t a bash on Apple or AppleCare, it can be quite useful. For a non-technical owner, the peace of mind, knowing your warranty repairs are covered is worth it.

In fact, my personal recommendation is to wait until the first year is almost up and see how your computer is. If its had problems already or that particular model has known warranty issues, then get AppleCare.

However, if you take care of your computer, have enough technical knowledge to handle small repairs and are willing to take care of any covered warranty issues in the first year, then skip it.

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