Two things. FIRST, make sure you purchase the iMac with a qualified credit card that has a product warranty extension built in. For example, I bought my iMac with my AmEx card. If I didn't buy AppleCare, I'd have 1 year coverage from Apple, plus one additional year extension through my AmEx card. SECOND, I did buy AppleCare - mostly, because this is an all-in-one, and if any component fails, it is a bear to repair it yourself - better let a qualified technician do that. Also, I bought the i7 - as a percentage of the total purchase price, the $169 of AppleCare is a very small cost for a computer I'm hoping to keep around for at least 4-5 years. Finally, because I bought the AppleCare with my AmEx card, it again got extended by one year, so now I have coverage of my iMac for 4 years combined AppleCare + AmEx, all for only the original $169 cost of AppleCare. Additionally, your card should qualify you for some kind of cash back or reward points which you can turn into cash - and that in turn will in a small way cut down on your ultimate cost - I'll get about $20 back through my AmEx... not much, but it brings down my cost of AppleCare to $149... totally worth it for 4 years coverage IMHO, plus you get phone support the entire time (without AC, it's limited to 90 days) and the option of home service. I'd absolutely do it, if I were you.