[MacSpirit] Should you buy an extended warranty? Probably.

by Rodney O. Lain

3/14/01

Money is a like a sixth sense without which you cannot make a complete use of the other five.

William Somerset Maugham

I began to loathe extended warranties the minute I began working at Best Buy. Thankfully, I left that place.

In any sales-driven retail company like Best Buy, the bottom line is fattened by selling services like extended warranties. The Law of Averages proves that many times, the average consumer may never use it. So, the retailer keeps more of that money that it doles out. Kinda like the insurance industry. Couple this with the teeny boppers who are usually hired to peddle these service plans, and you can see why shoppers hate them so.

But Murphy’s Law says that when you do need a service plan is usually the time, you will not have purchased one.

Take me, for instance.

I didn’t buy Apple’s AppleCare protection plan for my PowerBook G3 "Wallstreet," circa 1998. I figured that my PowerBook would not break down. I received several calls from Apple representatives at the end of my first year of ownership. I flat-out declined their offer, because I knew better than they did.

Now, I'm regretting it, since the display hinges on my laptop have gone on the fritz, a well-known issue about which Apple really hasn't done much, IMO.

You’re in good hands, with…
Today, I finally decided to do something about my PowerBook. I went to a local Apple VAR (Value-Added Reseller) in Minneapolis known for excellent Macintosh service and support. I explained that my laptop has a broken hinge on the display monitor. I wanted to know how much it would cost to repair the hinge.

“Between $600 and $700 dollars,” he answered. “You have to send it to Apple. They won’t sell us any of those parts.”

I cursed inwardly as I continued to plead my case in a flash of denial. “Is there any way you can fix it here, so that I don’t have to be without my computer for the trip back and forth to Cupertino?”

“Nope.”

So, I guess I will have to live with my floppy laptop display. Should have bought that extended warranty as a type of insurance policy.

If you ask me...
I am in a unique position to discuss this topic. You see, I sell Mac computers on the weekends.

Through the years, I have been ambivalent on the whole topic. Over time, I have vacillated from one belief that retailers sell extended warranties as a means to put their hands in your pockets above and beyond the price you pay for a new computer. On the other hand, I've grown to believe that you can never know when you might need it.

Since I work in the business, I have to, of course, answer to customers who ask my advice on whether or not they should buy the extended warranty. And, of course, I tell them, since no sales pitch is complete without explaining the full range of services the retailer can offer the customer beyond the initial purchase.

This time, it isn't a sales pitch (I don't want your money). In the interest of the public good, I want to give you this rule of thumb:

The more expensive your investment, the more you should seriously entertain the extended warranty.

Take my PowerBook, for example. In light of my experience, I don’t plan to ever again buy a laptop without such a warranty on it. Ditto for high-end desktops, like the G4 Cube and 15” Studio Display I bought last summer. That time, I bought the AppleCare plan without a second’s hesitation.

Now, if I were buying something like a $799 iMac, I may not be so concerned with with protecting such a comparatively small investment.

As for other rules of thumb, let me give you examples of customers who I’ve seen purchase extended warranties. I think their decisions will prove instructive for you:

1) The newbie. You never know when you’ll need the repairs. Also, you can take advantage of the tech support that often comes with the plan. Now, keep in mind that you get 90 days of tech support from Apple, so you may not need any support beyond that 90 days if you’re of reasonable intelligence.

2) The geek. Sure, you know you way around a motherboard, but I’ve actually sold extended warranties to geeks. For example, there’s this person who services Macs for a living. He said he never wants to work on his own computer. He also told me that he sees more Macs breaking down that he did in the days of more reliable machines, like, say, the Quadras. Take it for what it’s worth.

3) Those of you in between 1) and 2). I have no advice for you. You decide based on what I’ve said about the two above.

To be honest, I do explain the extended warranties when I sell computers. Not the same way I did at CompUSA or Best Buy. I have a bad taste in my mouth from having forced service plans on past customers who didn’t need or want them.

Regardless, I think good salesmanship consists of presenting to the customer the advantages of such a purchase and then letting them decide (then again, it’s easy for me to be so laid back in my approach, since I don’t sell Macs to support my family, so I suggest a second opinion on this one).

This is my opinion, so your actual mileage may vary.

To recap: extended-warranty plans are not evil. If I’d written this column a year or so, I would have said the opposite. But after my recent problems with my laptop and my G4 Cube (that’s a story for another day), I’ve grown to see the value in something that I once saw as merely a retail scam and a flim-flam.

This column is © 2001 Rodney O. Lain. All rights reserved.

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About Rodney O. Lain

A former journalist and college prof, Rodney lives in Minnesota, where he freelance writes on the side and works during the day as a junior manager for a top Fortune 500 company (daily he bemoans the fact that he was assigned a Gateway laptop by the IT guys). He has a soft spot for H. L. Mencken, Steve Jobs, Prince, Richard Wright and other well-known status-quo breakers.

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