Is Applecare worth it?

[Jackintosh]

That's similar to saying that you never know whether you'll hit the jackpot on a slot machine in Vegas. On one level that's true, but the other plain reality is that the odds are stacked against you coming out ahead. When you buy extended warranties you are betting against the house. The problem is, the house knows the odds, and you don't. Just like in Vegas, they make sure they win. Even so, lots of people play slots -- so what do I know?

But this isn't a casino situation where you're looking to make money. It's about peace of mind. That's the whole point of insurance. Otherwise we all wouldn't carry health insurance (at least in the U.S.). And you have to weigh the cost against value. $65-70 with an additional 2 years for a Mini or iMac is worth that peace of mind in my opinion.

It also may be false that Apple is making so much money on this. They may be providing it as a service for their customers who want this protection at a modest or break-even point for themselves.

 

[IJ Reilly]

But this isn't a casino situation where you're looking to make money. It's about peace of mind. That's the whole point of insurance. Otherwise we all wouldn't carry health insurance (at least in the U.S.). And you have to weigh the cost against value. $65-70 with an additional 2 years for a Mini or iMac is worth that peace of mind in my opinion.

As I said in my first post in this thread, it's a bad economic decision to insure against losses that you could easily afford to pay yourself. Calling it "peace of mind" is a way to avoid thinking about the economics, which are truly awful.

It also may be false that Apple is making so much money on this. They may be providing it as a service for their customers who want this protection at modest or break-even cost for themselves.

Extended warranties are notoriously profitable throughout the industry -- and last I checked, Apple was not a charity.

 

[Jackintosh]

As I said in my first post in this thread, it's a bad economic decision to insure against losses that you could easily afford to pay yourself. Calling it "peace of mind" is a way to avoid thinking about the economics, which are truly awful.



Extended warranties are notoriously profitable throughout the industry -- and last I checked, Apple was not a charity.

Easily afford to pay for an Apple repair? As you just said, Apple is not a charity. You'll pay through the nose, and then you'll rethink the economics. As I keep saying, if the cost of the protection is cheap, it's worth it. And at the prices off of eBay, it is.

 

[IJ Reilly]

Easily afford to pay for an Apple repair? As you just said, Apple is not a charity. You'll pay through the nose, and then you'll rethink the economics. As I keep saying, if the cost of the protection is cheap, it's worth it. And at the prices off of eBay, it is.

As an economic proposition, it's not cheap. And as I've said a couple of times before, Apple inflates the cost of these repairs, which gives people who buy AppleCare the impression that they're getting value for money. Repairs can be obtained from others at half the cost Apple charges for them.

In any case, the statement I made holds true. If you are someone who can't afford to replace or repair your computer if it breaks (and know that Apple isn't the only place where you can have it repaired), then an extended warranty may be something to consider. But when I hear people talk about how AppleCare is "definitely worth it" and is good for "peace of mind," I can see that the actual economics of extended warranties are not well understood.

 

[jmpage2]

To be fair you do have to look at the cost of the coverage. $75 for full 3 year coverage including phone support on a $2000 computer is incredibly cheap. There's probably not a single thing that could fail on an iMac other than the keyboard or mouse that would cost $75 or less to repair or replace.

Alternatively, if you choose to self insure in this case, you would probably need to know what the average cost of a repair on X iMac model is. It's also worth noting that on occasion Apple has upgraded peoples 2+ year old iMacs under this coverage to the latest model at absolutely no cost.

Imagine coverage like that on a $35,000 automobile and now imagine that such coverage only cost less than 4% of the purchase price. You'd be an idiot not to get it.

Generally speaking I am against extended warranties of any kind, but in the case of a boutique product like Apple, with such a low cost to insure/warranty the item, it's something of a no brainer.

 

[txnoob]

I think it's safe to say that for some it's "worth it" and for others it may not make sense. Especially for the Apple owner who's on his 3rd machine with nay a problem yet.

IMO, any Apple with a built in display should consider the Applecare simply because one of the most common problems with laptops specifically is the display or the video card.

If you spend $65 on a Mac Mini Applecare and 2.5 years down the road the logic board needs to be replaced for $300 then I think you made a wise invest ment. If you had paid $150 for AppleCare direct from apple, I wouldn't be feeling like it was a great of a deal. Especially if nothing happened at all.

For me, it would honestly depend on how much the apple care was vs. the price I paid for the machine vs. the cost of typical repairs for the model I purchased. Some iMacs have brightness issues on the LCD, Some MacBooks had certain nVidia graphics cards burn up. Unfortunately you may only know about those issues after it's too late.

You also need to consider the fact that some people may have the money right now to purchase the base iMac and AppleCare through Ebay, but most definitely wouldn't have $500 for a potential repair in 2 years (i.e. a struggling college student, single mom, etc)

Lots of variables can determine an extended warranty's worth. I for one don't consider it on items less than $200. Then, if it is offered on more expensive items, I only take it if it is no more than 10-15% of the price of the item. It would also depend on how sensitive the item may be to failure.
for example I would probably pay for an extended warranty on a $500 TV before a $500 kitchen range. I have also been in circumstances where the reseller will discount the price of the actual item if I would buy the warranty and it worked out to be a pretty fair deal.

It's all in your circumstances.

 

[Trajectory]

This question seems to be asked one a month here.

If you buy a laptop or iMac AppleCare is a good idea. I personally have bought AC for all of the Apple computers I purchased over the years, and I've had to use it a few times which made it well worth the cost for me.

 

[txnoob]

Another thing to consider is more people may have been screwed without an extended warranty than others. My mom had a dell computer HDD fail 1 month after the original warranty expired. She also has an Onkyo Shelf Audio system that was $700 when new. It was (still is) an incredible system for it's size. She bought an extended warranty and it failed at about 2 years old and the tuner component was replaced. That was over 15 years ago and now it's still running as new.

She has little faith in electronics and now basically always buys some sort of protection, even when think it's extremely over priced.

 

[Lordedmond]

Apple care is like any insurance

expensive if you don't need it but worth every penny if you do

 

[IJ Reilly]

IMO, any Apple with a built in display should consider the Applecare simply because one of the most common problems with laptops specifically is the display or the video card.

The problem with this reasoning is, you are betting against the house and the house knows the odds, and you don't.

 

[txnoob]

The problem with this reasoning is, you are betting against the house and the house knows the odds, and you don't.

I may not have exact figures, but that's what typically breaks on laptops.

Besides, I said they should "consider" applecare, not buy it. And as mentioned below, your individual circumstance will determine the best course. There is no finite answer.

 

[definitive]

Quality of Macs has fallen down so I think it's worth it if you're not planning to buy new computer every few years. At least you'll sleep your nights well.

explain how quality has fallen. all i see in every thread on this board is how macs are reliable, and pc's aren't.

 

[drjsway]

But this isn't a casino situation where you're looking to make money. It's about peace of mind. That's the whole point of insurance. Otherwise we all wouldn't carry health insurance (at least in the U.S.).

You're not looking to make money but you shouldn't be so quick to let go of your money.

Health insurance is completely different than electronics. If there is even a 1% chance something happens to me, I want to be protected. My life is worth more than money, my mac is not. How can you compare your life to a computer?

IMO, any Apple with a built in display should consider the Applecare simply because one of the most common problems with laptops specifically is the display or the video card.

It may be one of the most common problems but you don't know how often it happens. Apple does. Apple knows EXACTLY the percentage that fails and prices AppleCare accordingly. In Vegas, you can look up the house edge of any game online. AppleCare is worse than gambling because you are completely clueless on the odds, only relying on personal experience and forums like these.

Apple allows reselling of AppleCare on eBay. There is a reason for that. Even at those prices, it is still profitable for them.

My mom had a dell computer HDD fail 1 month after the original warranty expired.

For less than $50, you can find a HDD probably much better than a 13 month old Dell.

She also has an Onkyo Shelf Audio system that was $700 when new. It was (still is) an incredible system for it's size. She bought an extended warranty and it failed at about 2 years old and the tuner component was replaced.

Don't know how expensive the tuner was but she lucked out. I can go to Vegas and make a killing but I wouldn't recommend others do the same.

Ask Warren Buffet (or any investor close to his success) if he buys warranties. Nobody who understands economics as well as he does would even think about it. I don't care if you're a struggling college student who can't afford the repairs. You don't give away money now for something that may not happen in the future.

 

[drjsway]

By the way, every major credit card doubles the original manufacturer's warranty. I know my AMEX, Mastercard, and my VISA does. So, for example, if Apple offers 1 year, my credit card covers the 2nd year.

 

[IJ Reilly]

Health insurance is completely different than electronics. If there is even a 1% chance something happens to me, I want to be protected. My life is worth more than money, my mac is not. How can you compare your life to a computer?

That's true, but the real issue is, surgery and a stay in the hospital can easily run up a $100,000 tab. Most of us need health insurance because a bill like that would be ruinous.

 

[Whackintosh]

By the way, every major credit card doubles the original manufacturer's warranty. I know my AMEX, Mastercard, and my VISA does. So, for example, if Apple offers 1 year, my credit card covers the 2nd year.

How does that work though? Is it the equivalent of a 2nd year of Apple Care with he same level of benefits?

 

[drjsway]

How does that work though? Is it the equivalent of a 2nd year of Apple Care with he same level of benefits?

Not sure if it's same level of benefits but you go to Apple, get a repair estimate, send it to credit card company and they send you a check so you can have it repaired.

 

[Jackintosh]

You're not looking to make money but you shouldn't be so quick to let go of your money.

Health insurance is completely different than electronics. If there is even a 1% chance something happens to me, I want to be protected. My life is worth more than money, my mac is not. How can you compare your life to a computer?

No one's comparing the value of one's life with a computer. We're talking about insurance as a protection against some event, any event. It's a matter of degree and cost in what you want protected and if you think it's worth it.

Some people value knowing they won't have to shell out for an additional 2 years if something goes wrong with their Mac. Some people don't. Just like some people don't bother getting health insurance because they think they're healthy and will never get sick. It's all in your head as to what you think the risks are, and if you need to be protected against those risks.

I think we beat this one to death. Those who think it's worth it, get it. Those who think it's waste, don't. Now back to enjoying our Macs.

 

[drjsway]

No one's comparing the value of one's life with a computer. We're talking about insurance as a protection against some event, any event. It's a matter of degree and cost in what you want protected and if you think it's worth it.

Some people value knowing they won't have to shell out for an additional 2 years if something goes wrong with their Mac. Some people don't. Just like some people don't bother getting health insurance because they think they're healthy and will never get sick. It's all in your head as to what you think the risks are, and if you need to be protected against those risks.

Getting back to the original question "Is AppleCare worth it?"

It is worth it if you need a peace of mind that you're protected, yes, but if you need that peace of mind, you wouldn't be asking the question anyway.

Is AppleCare financially wise? No. Most companies have at least a 50% profit margin on warranties and I doubt Apple is the exception. Nearly 100% (yes, 100%) of Circuit City's operating income came from selling extended warranties.

Most people would be ruined with an $100,000 hospital bill. Nobody, not even the struggling college kids, will be ruined if their mac breaks.

Consumer Reports has been speaking out against extended warranties for for years. They felt so strongly, they took out a full page ad in USA Today. Click below to see it:

http://www.consumerreports.org/cro/resources/images/money/news/november-2006/why-you-dont-need-an-extended-warranty-11-06/overview/vmax_cr_v4_big.jpg

 

[drjsway]

Sorry for beating it to death but I feel strongly that we should educate people on this issue. Here's what Business Week says:

If you've done your homework, you'll just say no. For what is largely an afterthought in the buying process, extended warranties -- or more accurately, service contracts -- have become a huge $15 billion annual business. Typically, at least half of that goes into the seller's pocket as profit, with less than 20% spent on the repair or replacement of products. To put that in gambling terms: The house has set the odds so that for every $100 it takes in, it pays out only $20. You're betting against the house. Guess who wins.
http://www.businessweek.com

 

[Mike in Kansas]

Sorry for beating it to death but I feel strongly that we should educate people on this issue. Here's what Business Week says:

If you've done your homework, you'll just say no. For what is largely an afterthought in the buying process, extended warranties -- or more accurately, service contracts -- have become a huge $15 billion annual business. Typically, at least half of that goes into the seller's pocket as profit, with less than 20% spent on the repair or replacement of products. To put that in gambling terms: The house has set the odds so that for every $100 it takes in, it pays out only $20. You're betting against the house. Guess who wins.
http://www.businessweek.com

A lot of these things are a "bad deal" on average: car insurance, homeowners insurance, umbrella insurance, etc. However, as an individual, you don't get to average your risk out over many computers, houses, cars, etc. If a tragedy happens to you, your odds are now 100%. Your single computer either has something fail, or it doesn't. It doesn't fail 10% of the way.

For the pittance you can find Apple Care for on the web ($75 for an iMac), I can't see how that is a bad deal if ANYthing breaks over the next 3 years.

 

[Jackintosh]

Getting back to the original question "Is AppleCare worth it?"

It is worth it if you need a peace of mind that you're protected, yes, but if you need that peace of mind, you wouldn't be asking the question anyway.

Is AppleCare financially wise? No. Most companies have at least a 50% profit margin on warranties and I doubt Apple is the exception. Nearly 100% (yes, 100%) of Circuit City's operating income came from selling extended warranties.

Most people would be ruined with an $100,000 hospital bill. Nobody, not even the struggling college kids, will be ruined if their mac breaks.

Consumer Reports has been speaking out against extended warranties for for years. They felt so strongly, they took out a full page ad in USA Today. Click below to see it:

http://www.consumerreports.org/cro/resources/images/money/news/november-2006/why-you-dont-need-an-extended-warranty-11-06/overview/vmax_cr_v4_big.jpg

Consumer Reports has been against purchasing warranties on everyday electronics such as TVs, DVD players, and the like. I've never seen them come out against warranties for complex technology such as computer systems. So you're reading too much into what Consumer Reports is saying.

And I keep saying, as the above poster does too, if the cost of the protection is a pittance, then what the heck? Sometimes it sounds like principle's hijacked common sense, as in this situation.

 

[IJ Reilly]

Consumer Reports has been against purchasing warranties on everyday electronics such as TVs, DVD players, and the like. I've never seen them come out against warranties for complex technology such as computer systems. So you're reading too much into what Consumer Reports is saying.

And I keep saying, as the above poster does too, if the cost of the protection is a pittance, then what the heck? Sometimes it sounds like principle's hijacked common sense, as in this situation.

Consumer Reports has always recommended against buying extended warranties. If the principle is saving money over the long run, then I agree -- it has been hijacked.

 

[JayLenochiniMac]

Consumer Reports has always recommended against buying extended warranties.

In general, yes, but they've made a few exceptions in the past, namely rear-projection TVs. They also suggest the most cautious customers to consider an extended warranty if the warranty is inexpensive and the costs of repair is high (sounds like Apple, doesn't it?).

 

[IJ Reilly]

In general, yes, but they've made a few exceptions in the past, namely rear-projection TVs. They also suggest the most cautious customers to consider an extended warranty if the warranty is inexpensive and the costs of repair is high (sounds like Apple, doesn't it?).

I recall seeing the former in Consumer Reports, but not the latter. In fact what they do recommend for the worrier is banking the money you might have paid for extending the warranty. Projection TVs cost (or once did) something like four grand and are very unreliable. And they have said that of the extended warranties available, AppleCare is one of the better ones because of the telephone tech support. (Many may not realize that your one year of AppleCare phone support begins when you call them the first time, so I wonder about the value of that too.) In general, they still recommend against them.

Here is the article from CR:

http://blogs.consumerreports.org/shopping/2006/11/resist_the_pitc.html