People buy Applecare because Apple employees are taught to very aggressively sell it (because the profit margins on Applecare are so high), and because its easy to upsell people and tack on additional costs immediately after they've decided to make a big purchase.
Warranties are underwritten the same way insurance policies are....The cost of the warranty is made up of an actuarily predicted cost of claims per contact, plus overhead, plus a (high) margin for profit. Only a very small percentage of users will experience 'losses' throughout the warranty period that exceed the cost of the warranty itself. It is not a coincidence that major failures occur immediately after the warranty period is up. There is actuarial/statistical data behind the length of the warranty period and the cost.
Even if you do find yourself utilizing Applecare for repairs, the actual cost of repairs will likely be less than the cost of the warranty itself. If this weren't the case, Apple would be losing money on Applecare. In most cases, warranties generate higher profit margins than the product itself...which is why representatives at Apple, Best Buy, the car dealership etc etc etc are trained to shove them down your throat.
I never buy warranties because even if something did go wrong, I usually have the technical know-how and patience to fix it myself for far cheaper than the cost of the warranty. When you fix something yourself, you'll be suprised at 1) how easy it actually is to fix, and 2) how cheap it actually is to fix. Even if you can't fix something yourself, its still usually cheaper to have issues serviced as they happen.
The real 'value' to a warranty really is the piece of mind that comes with knowing that you have a contractual agreement with someone to have something fixed if it breaks. But there is a very high price premium involved with having that piece of mind.
Yep, this.
And when the above posted calls out cheaper to repair than the warrantee, that means for Apple to do so, not necessarily the end user - go and price a logic board replacement some time.
For virtually every single electronic device I've ever purchased, the add-on warrantee has been an immediate "no thanks!" and has been justified to not go for it. The majority of electronics are either DOA out of the box, have issues within a very short period of time which is within the normal warrantee time, or live beyond their generally useful life (meaning the time at which most have already upgraded, moved on to new tech/model, etc.). This is exactly what companies bank on (and as stated, it's backed up by their own stats on failure rates/returns, etc.) when they try to sell you 'additional coverage.'
That doesn't mean it never pays to have it, though - it just means for a majority of people buying the extended coverage, any usage of it in cost to the company is < the cost of the warrantee. Anyone needing a logic board or display replacement is definitely better with the few hundred on the replacement, where virtually everyone else could have easily gone without it.
Having said that, Apple Macbook/pros are the only thing I've ever considered getting an 'extended warrantee'/Applecare on, and sadly it's because of all of the reported cases of needing logic board replacements, GPUs becoming de-soldered due to head (older Nvidea issue), and similar. In 2 years (or anything beyond the 1 year original Applecare), having an originally $2500 notebook need a ~$1000 logic board replacement when at the time the laptops used value is perhaps $1200 or so - is a tough spot to potentially wind up in. Having a hard drive die - who cares? It's inconvenient but low $, and even a top case + keyboard barely would break even with the cost of AppleCare, but the logic board.. :-/
At this point, I'm still undecided. I had a dual G4 tower still going strong many years later, the first C2D non unibody MBP 15" still going strong, a refurbed 13" SR white macbook that had a single key DOA out of the box (replaced under original warrantee) that a few years later still works but has flaky USB (after 4 years), and now the highest end MBP 15" sans SSD (7200RPM HD, 2.3GHz i7, HR, AG) which lives connected to an external LCD the majority of the time, meaning the temps that go along with it (77*C at the moment, 4500 RPM fans, pretty common when using an external LCD), and I have some concern about the heat over time causing issues. I expect fully for the machine to very likely outlive the 1 year coverage, but I got out of the 'upgrade every year' phase some years back, so really would like to see at least 3 years out of the machine, unless the wife convinces me she 'needs' it and then I get a 'free' upgrade at some point...so am completely undecided on extending the Applecare at this point - I may well do it, just for sanity/peace of mind.
