Did you guys buy any sort of protection plan?

Discussion in 'iPad' started by littlehuman, Nov 22, 2010.

  1. littlehuman macrumors newbie

    Joined:
    Nov 22, 2010
    #1
    Hi,

    I just bought my ipad today from bestbuy. One of best buy sale guys almost forced me to buy bestbuy protection plan, but I didn't buy it. One thing I found out when I got home was that bestbuy prtection plan covers accidental damage. I am tempted now...

    Did you guys buy any sort of protection plan?? if so, why? if not, why not?
     
  2. Mitchrapp macrumors 6502a

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    Apr 2, 2010
    #2
    I don't buy protection plans for anything. It can be tempting but I stick to my guns and just take extra care of the product. Too damn expensive.
     
  3. tibi08 macrumors 6502a

    tibi08

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  4. AndyfromTucson macrumors member

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    Jan 10, 2010
    #4
    Here is my thinking on protection plans (and insurance in general).

    The vendor sells the protection plan to make a profit.

    In order to make sure they make a profit the vendor has carefully analyzed the probability of the item needing a repair, and the average cost of repairs, multiplied the two to get the expected total cost to them of the protection plan, and then doubled or tripled that figure to come up with the price for the plan. News accounts say that protection plans are some of the most profitable items stores sell, so the markup may be even higher, say 500% over expected cost.

    Since you know the vendor has done their homework in pricing the protection plan you know that on average consumers spend somewhere around 50% (or much less) of the price of the protection plan on repairing the item.

    Therefore the protection plan is not a good value in that its price is some multiple (2x, 3x, 5x?) as your probable expenditures on repairs.

    Sure, if something happens to one item your actual repair costs will probably exceed the price of the protection plan. But the law of averages means that if you studiously avoid all protection plans over your whole life you have a very high probability of saving substantial amounts of money. And vice versa.

    The only time I buy insurance is when (1) there is no reasonable option to just skip the expense if the insured event happens, and (2) the expense would substantially impact my overall financial security.
     
  5. Syk macrumors 6502a

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    Jun 20, 2010
    #5
    I buy insurance on vehicles and homes that's about it.

    Protection plans on items I don't. I worked part time at a office supply store while working on becoming debt free and we sold plans on computers,camera, office furniture and all the profit came from the plans, not the item. Actually those are pure profit.

    Another I didn't like about ours was that if it broke, you had to call it in, and wait till they sent you a money card that could only be used in the store. So that meant being without whatever it is until they sent you the money. I rather be able to walk in say it's broke and walk out with another item.

    I guess about the only way to beat the system would be require a little truth stretching. On most items $100 and below, let's say a printer, the replacement plan was $8-15 more for a year coverage that started after the manufacturer warranty. You could in theory wait till the manufacturer warranty expired, call and say it was broke even though it wasn't, get them to send you a card and go buy some other $100 item at the store, it didn't matter what you used the card on. Those items they didn't require you to send in but reserved the right to.

    So that leaves you with a still working printer and a $100 store card for the cost of $8-15

    Also accidental damage was almost half if not over half the cost of the product and even it had stipulations and you had to wait for the store money card.

    That said I'm careful with my stuff so I don't buy the plans. I might be tempted if I could walk in & walk out with a replacement, no questions asked if the plan was 10% or less of the cost of the item and it would have to be a pretty pricey item
     
  6. 7thMac macrumors 6502

    Joined:
    May 10, 2010
    #6
    The last two posts are much better advice than the countless mindless posts advising people to buy AppleCare (or other insurance) because something expensive might happen.
     
  7. SteveKnobs, Nov 23, 2010
    Last edited: Nov 23, 2010

    SteveKnobs macrumors 6502

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    #7
    Except the last two posts had nothing to do with protection plans for an iPad. We re talking about a $500+ piece of technology... Why not spend a little extra to guarantee your shiny new toy is covered? And if you want to start throwing around some fancy math calculations, $100 more for AppleCare for a $500 or $600 ipad is roughly an 18% increase in cost for the customer- big deal? You weren't cheap to begin with when you bought the damn thing- don't be cheap and leave it uninsured.
     
  8. tibi08 macrumors 6502a

    tibi08

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    Sep 17, 2007
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    Brighton, UK
    #8
    The point of insurance is to cover the significant outlay which you might incur (e.g. if your house burnt down, or your car was written off) which could be financially crippling. If you will find it financially crippling to replace your iPad, then you shouldn't have bought one.

    Save your money for the next upgrade.
     
  9. AppleFan360 macrumors 68020

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    Jan 26, 2008
    #9
    Basically my rule is I only buy protections plans on items with moving parts.
     
  10. Ciclismo macrumors 6502a

    Ciclismo

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    Germany
    #10
    I didn't pay for my protection plan - I've got a half brick in a sock. Both are stolen.
     
  11. Mitchrapp, Nov 23, 2010
    Last edited: Nov 24, 2010

    Mitchrapp macrumors 6502a

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    #11
    Cheap? Smart business. I'm not throwing my iPad to the ground. Sucker born every minute.
     
  12. SteveKnobs macrumors 6502

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    Jun 23, 2010
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    CMU
    #12
    I treat mine like it's my damn child....but even kids get a few stitches and broken bones every now and then. I feel like you might be singing a different tune when the nearly inevitable accident does happen.
     
  13. SidBala macrumors 6502a

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    Jun 27, 2010
    #13
    I never buy the plans. Everyone knows they are ripoffs.
     
  14. smelly cat macrumors regular

    smelly cat

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    Apr 17, 2010
    #14
    To the OP, service plan actually does not cover accidental damage
     
  15. Syk macrumors 6502a

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    Jun 20, 2010
    #15
    I guess everyone should judge how they handle things. I've had my say on it from the stand point of someone who had to sell them when I worked part time and knowing how they really work, I'm saving my money.

    The base iPad is $500 I can replace that myself but I'm pretty sure a replacement plan that offers accidental coverage is going to be close to 50% of the cost of the device, it would be at the place I worked.

    Instead of paying that, put it in a jar someplace.
     
  16. AndyfromTucson macrumors member

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    Jan 10, 2010
    #16
    Why worry about paying "only" 18% (or $100) more for something to get an added feature/plan you will probably never use/need? If you take that attitude on all your purchases you will end up spending a lot more money than if you were a bit more frugal. Do that on ten purchases and you just spent an extra $1000; you just gave up a base model MacBook Air in the name of avoiding being "cheap".

    Bottom line: Being cheap when you buy your toys allows you to buy more toys.
     
  17. tibi08 macrumors 6502a

    tibi08

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    #17
    Do you not have home insurance in New Zealand?
     
  18. harpy macrumors member

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    Apr 3, 2010
    #18
    I'd agree with other's who have said that you should not buy an insurance plan.

    One thing that hadn't been mentioned is that I don't buy these on principle simply because they are very manipulative. Generally they tell you about the plan at the cash register. They do this because it is an effective sales tactic. The moment when you are buying an expensive item is usually a moment when you're emotions are running high.

    You've been weighing the back and forth over spending this much money, and this can be stressful. You're finally committing to purchasing the item and using up valuable resources and then out of the blue they give you a hard sell on this replacement plan. You're put into a position where socially you're discouraged to read over the fine print because others are in line behind you, and you were just about to hand over your money. People are waiting and you need to make a gut decision, should I avoid the risk?

    The problem is that your brain is divided up into different functional roles. In the purchasing process the emotional parts of your brain are very active and its easy to drown out the more analytical and rational parts of the brain. The stress of the event even can trigger your brain to send out endorphins, the chemicals that make you feel good. Some people actually get a "purchasing high" during this whole process.

    So you're put on the spot, socially you're pressured not to think, and your brain is already in a heavily emotional state. So in that spot you have to suddenly make a rational risk assessment. The salesperson is trying to sell the idea that "if it breaks for any reason" and your brain can process this well enough... there is of course always some possibility that your iPad could break. The problem is how likely is that? The sales person is actually invoking a fear response in you, and fear is one of the core emotions that is very effective at overriding the reasoning parts of your brain due to our innate fight or flight response to danger.

    Putting you in this spot is all quite intentional. The stores know that they can catch a lot of people that otherwise are quite rational and prudent and reel them in just because for a brief moment their emotions override their rational analysis.

    Knowing all of this, and know its coming in so many of my transactions, helps me to avoid them on principle. Further, I feel I'm being manipulated by these stores, which helps me remain resolved not to hand them more money simply because they are trying to scare me when I'm in a vulnerable position.

    There is a point to insurance, as others have said, it's there to avoid financial catastrophe. Cars, houses, life insurance... those all make sense. Handing over more money on items that have only a remote chance of breaking or failing, and which already have return windows and manufacturer guarantees, and which won't lead to financial ruin doesn't make much sense unless you're oddly unlucky in life.
     
  19. Amazing Iceman macrumors 68040

    Amazing Iceman

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    Nov 8, 2008
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    Florida, U.S.A.
    #19
    I bought my iPad using a VISA card that doubles the manufacturer warranty of my purchases, so I should have two years warranty on my iPad.
    I also bought an Accidental Damage/Theft policy from Safeware to protect it against those unexpected events.
    I think I'm well covered now.
     
  20. azentropy macrumors 68000

    azentropy

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    Location:
    Surprise
    #20
    I take pretty good care of my devices, but have come to realize that I'm a klutz. I also have my 6 year old niece and 12 year old nephew, along with the whole extended family who love the iPad. So I bought accidental insurance for my 32gb 3G iPad for $80 from SquareTrade and that is how I think of it. Yes it also adds a 2nd year of warranty coverage, but that is just a bonus.

    Just having piece of mind and not worrying every time some one uses it or when it is passed around is well worth the $$ to me.
     
  21. Mitchrapp macrumors 6502a

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    #21
    Good analogy. And more toys are always better.
     
  22. Ciclismo macrumors 6502a

    Ciclismo

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    Location:
    Germany
    #22
    Yeah, but I didn't specifically get it for my iPad. Nor does it cover my iPad in the same way as the gadget protection plans of which are spoken here. However I am of the opinion that a decent contents insurance policy in association with AppleCare's extended warranty is fully sufficient. Along with half a brick in a sock.
     
  23. AndyfromTucson macrumors member

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    Jan 10, 2010
    #23
    Here is an illustration of why I don't buy protection plans. Here is a list of the Apple stuff I have purchased over the last 2-3 years (yes, I have a problem) with what it would have cost me to get Applecare for each item at current prices:

    MacBook White: $249
    MacBook Air: $249
    iPod Touch: $59
    iPod Nano: $39
    Mac Mini (x2) : $149 ($298)
    iPad: $99

    Total: $993

    With the money I have saved by not buying protection plans I could replace any one of these (except for the MBA) with a brand new model.

    Which is better: Buying protection plans and getting your old gadget fixed for free when it breaks or not buying protection plans and using the savings to either (1) just buy a brand new device if one breaks or (2) buy yourself a cool new toy if nothing breaks?
     
  24. tibi08 macrumors 6502a

    tibi08

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    Brighton, UK
    #24
    Although I agree with you totally, I do know somebody who bought a Powerbook G4 in about 2005 with Applecare, and it broke a couple of years later. Apple couldn't repair it and replaced it with a Macbook (effectively a free upgrade worth some $1,000) and then it broke AGAIN beyond repair and he now has an aluminium Macbook (effectively a second free upgrade) saving himself some $1,800 over the original investment in Applecare.

    I would say such examples are few in number, though!
     
  25. cogsinister macrumors 6502a

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    Aug 24, 2006
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    Fredericton NB Canada
    #25
    I just know how to work the phone people at Applecare............and i got a free Ipod.....

    :D
     

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