War of the Warranties: AppleCare vs. SquareTrade

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By , dealnews contributor

Those who adore Apple products know that often it's a love-hate relationship. Apple is pricey, and aside from modest discounts on Black Friday, there's really no such thing as an "Apple Store Sale." (Although you can see, again, modest discounts from resellers throughout the year.) Being a deal slinger, this may irk you.

Sure you can shop for discounted accessories and cases via dealnews, but what about insuring your $1,000+ laptop? Is AppleCare really your only option? We think not! San Francisco-based SquareTrade is a third-party service that offers a paid warranty independently of a product's manufacturer. If you're a regular on our site, you're probably aware that we frequently see SquareTrade coupons that reduce the cost of a variety of warranties, giving you the opportunity to snag a discount in a way that's not possible with Apple. But does that mean the SquareTrade option is a lesser "budget" version? In a heads up comparison, we looked at the cost, coverage, and overall value of SquareTrade and AppleCare warranties.

How AppleCare and SquareTrade Warranties Work

All Apple devices come with 90 days of telephone technical support and a 1-year warranty to guard against mechanical failures. AppleCare extends both forms of coverage from two or three years, depending on the product. Certain other variables may change as well; iPhone AppleCare (which is technically AppleCare+), for example, specifically addresses accidental damage (also known as "drops and spills"), though it doesn't cover what's known as "full immersion" (i.e., "I dunked my iPhone in a swimming pool," or toilet). It does not insure against theft or loss, and you'll pay $49 for each incident of repair up to two claims maximum.

SquareTrade warranties insure your Apple device for two or three years. In addition to mechanical issues, drops and full-immersion spills are covered for iPhones, though theft and loss are not. SquareTrade thus gets a slight advantage here for covering more damage scenarios than AppleCare. Their warranties are applicable to all new Apple products and refurbished ones as well, regardless of where they were purchased.

Coverage Costs

A 2-year AppleCare+ warranty costs $99 for an iPhone and must be bought within 30 days of your purchase at an Apple retail store. A 3-year AppleCare warranty for an iMac costs $169, and it's $349 for a MacBook Pro. A full list of AppleCare prices can be found here.

For most electronics, SquareTrade bases its prices largely on what the product being covered costs. So a 3-year warranty on a $1,200 computer (the starting price of a new iMac) will set you back $159.99. However, coupon code "WIZZARD25" currently slashes 20% off, and we regularly see discounts of up to 30% off, making the coverage notably less than the Apple option at this price point. With SquareTrade's current iPhone 4S promotion, 2-year coverage will only cost you $99.99 (a low by $25), just a buck over Apple. While there's a $50 deductible on all claims, SquareTrade allows customers up to four repairs on or replacements of your iPhone; AppleCare allows just two, with a $49 deductible. SquareTrade has the advantage once again.

SquareTrade is also able to match AppleCare with the iPad (while also offering a slightly more inclusive plan), if you're again willing to hold out for the right promotion. iPad protection on AppleCare is $79 for two years, while on SquareTrade it's normally $129.99 for two years. However, we have seen coupons reduce the latter to as low as $69.99. (Current code "WIZZARD25" cuts it to $103.99.) Plus, this plan covers accidents, whereas AppleCare does not.

Redeeming Warranty Services

In the case of AppleCare, just head to an Apple Store or authorized Apple repair center and a Genius will help. Apple has a good track record of replacing defective chargers on the spot, no questions asked. But more complicated repairs require leaving your computer with Apple for service, and depending on the backlog, the work and parts shipment may take days or even weeks.

A SquareTrade warranty is a bit more flexible: customers can either head to their local Genius Bar and SquareTrade will reimburse the costs of repair and servicing that you pay upfront, or customers can send their Apple products to SquareTrade via free overnight shipping. Even with little faith in the USPS, SquareTrade guarantees a 5-day turnaround for repairs. What's more, they have a track record of fixing about 80% of iPhones on the day they receive them.

Customer Service

When it comes down to it, service is an aspect of a warranty that cannot be overlooked. While Apple needs to do a better job of keeping appointment times, it still deserves high ratings for how it has streamlined its customer service methods. Technical service on the phone, as many Apple customers will attest, is another matter, though I've had better luck than many dealing with Apple's help lines.

In 2011, SquareTrade won its first Stevie Award for sales and customer service, and the company has garnered support from some heavy hitters, including NBC, MacRumors, Macworld, and Gizmodo. What's more, SquareTrade has earned an A+ rating and accreditation from the Better Business Bureau, whose records also show that all 90 of the complaints filed against SquareTrade have been resolved successfully. Apple has an A+ rating as well, but for the company as a whole and not its warranty program per se.

Best Bet Warranty

AppleCare warrantees work, but could be cheaper and more comprehensive. High prices on iPhones, iPads, and MacBooks are, in part, understandable because true to the Steve Jobs vision, they occupy their own universe. But Apple doesn't own the warranty business. SquareTrade offers clear advantages in price, customer service, and overall coverage — if you make sure to keep your eye out for a deal.

Front page photo credit: EyeOh
Photo credits top to bottom: D Drake Photos, The Gear Head, and The Mighty Max Cart

Lou Carlozo is a dealnews contributing writer. He covers personal finance for Reuters Wealth, and was most recently the managing editor of WalletPop.com, and before that a veteran columnist at the Chicago Tribune. Follow him on Twitter — @LouCarlozo63. You can also sign up for an email alert for all dealnews features.
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).

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6 comments
Ltree
I had a Square Trade warranty for my iPod Touch that covereed accidental damage, and when it fell into water and died, ST promptly reimbursed me the full purchase price of the iPod. I bought a warranty for its replacement and hope I never have to use it.  :-)
    However, I would NEVER get anything but AppleCare for a Mac because of the invaluable phone support that it provides. I've owned numerous Macs since 1987 and most of my problems have been solved by phone calls, but I really appreciated that AppleCare provided house calls when we had iMac or tower malfunctions. 
    BTW, I never buy AppleCare from Apple, but always do a web search to see which reliable source has the current best discount on it.
January 23, 2012
Yuniverse
Thanks for the comparisons.  However, it seems like this article is a little skewed toward Square Trade.  While mentioning that Apple Care needs to be purchased within 30 days of purchase of the products in question, the article forgets to mention that is also the case with Square Trade.  Therein lies the difficulty of buying Square Trade warranties with discounts to pretty much match the Apple Care's prices.  What if you've bought your item during a good sale but the Square Trade is not offering discount at the time nor within 30 days?  Square Trade discount can't be counted upon because of the restrictions of when you can buy it.  Instead, it could be cheaper buying Apple Care warranties from a reputable ebayer at the discount.
January 23, 2012
oscarino
I am on my second MacBook Pro, both have been covered by AppleCare.  Even forgetting the warranty (under which they replaced the first computer), their technical support has been a lifesaver time after time, and it is superb.  They don't seem to care how long their people take -- so long as they ultimately solve the problem.  95% of my calls have been answered in 2 minutes.  It is like having your own IT department.  There is nothing like it in the computer industry, and even were Apple laptops and OS X not superior to PCs and Windows, the availability of such support would be a deal closer even at the premium price of Apple produce. The warranty extension is nice, but the tech support is scarily good, and, if you use your computer for business, something you will never want to give up after the first time you use it.
January 23, 2012
deltaman
This comparison ALSO overlooks another important difference — AppleCare covers the product for the entire duration of the warranty, regardless of the number of repairs or the accumulated costs of covered repairs; SquareTrade coverage ends when they have expended the original insured value on repairs — replacing your laptop screen or motherboard could effectively end your warranty coverage at that point — regardless of how much time remains! This important distinction in coverage is applicable when comparing SquareTrade warranties with OEM warranties offered directly by many other manufacturers besides Apple. With a SquareTrade warranty, the buyer assumes a risk that even one serious (i.e., expensive) repair could significantly deflate the residual value of coverage remaining, and effectively leave you largely uncovered for additional repairs during the remaining term of coverage — and, they get to keep your covered item once their payout (based on THEIR calculation of the retail parts + labor cost) has reached the original insured value; if the diagnosed repair cannot be completed for the residual value remaining on your contract, they'll just send you a check for whatever unused balance remains...

On a lesser point, AppleCare also offers mail-in depot service for portable devices, as well as in-home/office repairs for iMac and Mac Pro devices.
January 23, 2012
jerpat
This article overlooks one very important difference between AppleCare and Square Trade, telephone support.  Without AppleCare phone support ends after 90 days; with AppleCare phone support for the entire warranty period, usually 3 years.  With Square Trade??  Phone support has been invaluable for me with MacPro, MacBook, MacMini, Apple TV, and iMac.
January 23, 2012
LonnieMcClure
To clarify, the $99 plan that includes accidental damage coverage is actually AppleCare+, not the standard AppleCare plan, which is $69, does not include accidental damage protection, and can be purchased any time during the warranty period.
January 23, 2012