A better way to define "extended warranty" is "prepayment of future repairs." A salesman will tell you that if you have to bring your car in once for major repair, the warranty will have paid for itself. So suppose you pay $800 for a warranty. Two years later, you have an $800 repair, covered by warranty. Did it "pay for itself"? Of course not; you prepaid when you bought the car. With very few exceptions, most cars come with a one or two year warranty. Because most of us own our cars longer than that, we would prefer the manufacturer to stand behind their product a little longer than that. Thus the "extended warranty" was born. YOU assume most of the risk and the salesman has one more product he can make a commision off of you with. Many of you reading this think I'm just sour grapes. Many of you believe that the extended warranty brings peace of mind. Fair enough. It's your money, but remember these points: 1) You should read the warranty, in front of the salesman. Ask questions. Note how often he uses the word "etcetera". 2) Notice how parts that need the most frequent replacing (timing belt, brakes, struts, emission sensors) are never covered. 3) So called "bumper to bumper" warranties only last the first 30,000 miles. Then, a long list of parts are suddenly NOT covered; usually the parts that are expected to fail after 30,000 miles. Then after 60,000 miles, another list of parts are no longer covered, and another batch after 80,000 miles. The manufacturer is only covering his rear, not yours. 4) Insist on a MANUFACTURER'S warranty. The car's logo should be on the paperwork. If the salesman says, "Our service contracts are provided by so and so", either skip it or take your business somewhere else. These are not warranties; they are insurance policies, complete with "deductables", and insurance policies never "pay for themselves". Some of these policies make YOU pay for the repairs, then send them the receipt. Later, they send you a reimbursement check for what they think the repair was supposed to cost. Other policies won't pay up until they give the technician an approval. If the contract company won't pay the full price, the technician hits you up for the difference. 5) No matter what any salesman tells you, you will hardly ever bring your car to the service bay with trouble and get the repairs done scott free. You will, at the very least, be charged a "diagnostic fee": the cost of finding what's wrong. Also, part of a service manager's job is to find a way to weasel out of the warranty if he thinks he can. If not, he'll try to get you to pay for other repairs he "happened to notice while your car was on the lift." There's just no such thing as a free lunch. To learn about better warranty options, log onto: www.beat-the.com/warranties.html

Pretty much all the bases covered by previous posts. I can back up what has already been stated. In short, I purchased a pre-owned Volvo (first car through a dealership-live and learn), bought an extended 36 month warrany, and it was useless. It was not a manufacturer's warranty. The car broke down 30 days after purchase. The repair was one of those "not covered" items. Cracked alternator arm to be exact. So, I paid for the repair, the towing, and a new battery (juice got sucked right out of it as a result of the cracked arm and it was 4 years old). Cha ching $400 (1997). I was livid. Incensed more when the dealership mechanic told me I was "wrong" and that all I had was a dead battery and to suck it up that they were not paying a dime either. I wrote to Volvo directly. They reimbursed me for everything and made the dealership suck it up. Shop manager called to apologize and the mechanic was fired. The response time was days. . .not weeks. Sometime's going to the manufacturer pays off. Okay, so back to that waranty. A year later the A/C blew. . .not covered. The radiator busted. . .not covered. You get the idea. Oh, and the warranty cost was just tacked on to everything else that was financed. Yes, FINANCED and that means there was interest paid on it. Best advice, buy a reliable car, take good care of it, and find a good mechanic who won't rip you off and forget the warranties. I bet this method would cost you less in the long run. . .in headaches at least.

I think it really depends upon the individual situation and exactly how the extended warranty reads and who sponsors it and the car. I tend to have the viewpoint that an extended warranty is really a type of "car health insurance". It is similar to insurance, like a "Blue Cross car coverage" with exceptions and limitations and deductibles and lots of fine print. It is a hedge-bet by both parties. The one who offers the warranty hopes to make a profit, while the buyer hopes to offset any catastrophic repair costs. [A dealer may hope to improve PR also.] The different parties are wagering and attempting to predict potential covered repairs. Also, a little factor is that different car manufacturers want their customers to be satisfied and may influence how some warranty offers play out. Anderson had a good anecdote regarding an aspect of this. Personally, I have had some satisfactory experiences by purchasing new cars and a "high end" extended warranty at that time. I knew how the commission ran with these warranties because the car salesman was my son-in-law... ...regardless, I have come out way ahead with new Ford cube van which I had used for work. Another Ford, I didn't come out way ahead financially, but I did have the relief of not having major worries on costs when I had car problems. I feel a good dealership can play a role with satisfaction and coverage. So, there are a lot of variables. It is one of those decisions where you have to weigh in different factors.

I covered this a little in another question, but I'll rehash here for your benefit. Stay away from any dealer warranty. Several reasons: 1. Usually the warranty is only valid at the dealership you bought it from. Break down out of town or somewhere around the country and you would have to get towed back to your dealership to get warranty repairs, and dealer warranties have a limit on towing distance they'll cover - if they cover towing at all... 2. You will probably find that one of the requirements of the dealer warranty is that all services and checkups have to be done at that dealership for the warranty to be valid... an easy way of fleecing customers - you've got no option then to go to them for services, and are at their mercy when it comes to quality and price... 3. Often they'll have limitation on WHAT they cover... like the aforementioned Volvo saga. HOWEVER - if you can get hold of a genuine manufacturer warranty extension, then it may be worth it. If you're planning on owning the car longer than the regular warranty period, a manufacturer's extended warranty is a good idea. Make sure that it covers exactly the same as the normal warranty. Most manufacturers are good with their warranty - it's usually the dealership you'll have a problem with, if any. If you can't get a manufacturer's warranty from the dealer, call the manufacturer directly and see what they have to offer.

I purchased an extended warranty, when I purchased a 2001 ford windstar, from Warrantybynet.com. I had to have the transmisson repaired at a cost of $2,500 , which they paid it all. next the motor went bad for the power window, they paid $230.00 of the $240.00 charge, so I guess it depends an the company you go with, I would recommend Warrantybynet

Yes! You should buy the extended warranty when you purchase a car. It is a minimal investment to protect your property. I do not however suggest purchasing from car dealers. They generally mark up the price of the warranty coverage to make a profit on the sale. Try reading up on extended warranties at carbuyingtips.com or edmunds.com. They offer great information. Good Luck!

It certainly depends on the automobile purchased (i.e., it's year, condition, etc.) but, I bought an extended warranty when I bought my 2001 Mercury Sable and it has proven to be worth every penny! Plus, I worked it into the financing so it wasn't a lot of money out of my pocket at the time. I had to have the entire A/C system replaced and I only paid the $75.00 deductible out of a $2500+ bill. There have been 2 or 3 other things that would have been very expensive for me had I not purchased the warranty. (However, if I had purchased a Toyota, I might not have gotten the warranty because Toyota's are such good cars) BTW, the warranty I purchased was through CARMAX, not through Ford. It may make a difference how worthwhile the cost is based on whose warranty it is.

Always, how else are the warranty companies going to make a huge profit.

I had a good experience with buying an additional extension to the manufacturer's warranty. I bought a Porsche with about 30K miles on it. An extended warranty for $3000 was offered to cover everything up to 100K miles. It clearly stated all the components covered. I used the warranty several times to cover repairs. There was a deductible of $200 each time I took it in for repairs. The supervisor working at the garage doing the repairs grumbled because he had to make the phone calls to ok the coverage, but I easily got over $3000 worth of repairs done. I kept the car for about 5 years until it was totaled in an accident. I think the take home message here is be careful. Read the documents explaining the details of what is covered. I had an expensive car and $3000 was a good amount to pay for practically bumper to bumper coverage.