I lost track of this thread, and just found it tonight. let me chime in again.
Are extended warranties worth it?. It depends on your comfort level but for 95% of people, usually not. Unless they've bought a car that has known defects like the transmission on a 2000 era Dodge Grand Caravan, or the electrical system on a pre-1970's British sportscar.
Extended warranties count on people being uncomfortable with the possibility of repairs after the factory warranty runs out.
I've seen the price charts for extended warranties, for lots of different types of cars and trucks, and except for the first year of a model, the warranty companies have dialed in the likelihood of repairs on any particular model so well that they almost assure themselves of making money on 90% of the warranties, by not having to spend more money than they charged.
Other factors:
1. Most people who buy new keep their vehicles on average 39-42 months before getting the itch to buy a new one. On a basic 3 yr/36k warranty, The extended warranty company is off the hook 3-6 months into their "extended" term. You've just paid $2000 for a totally unused item, that when you sell the car adds ZERO value to the car because it's more than likely non-transferable to a different owner. Maybe you're lucky enough to get a warranty that can be "sold back" upon selling your car. Well, they've had use of your $2000 for 3 years. So you gave them an interest free loan that could have been in your bank or investment account for the past 3 years earning YOU interest or dividends.
2. If something is going to happen to your car, due to a design flaw, or defect which is covered by warranty, chances are it would go bad in the first 3 years.
Lets say you're one who keeps a vehicle 10 years:
1. Your factory warranty will last 3/36, or for some components- 5/100,000 miles, like the Ram 5 yr /100k powertrain warranty.
2. Your extended warranty starts on day one of your vehicle's ownership. NOT ON THE DAY YOUR FACTORY WARRANTY ENDS. So, the 5 yr /100,000 mile extended warranty you paid $2000 for at best buys you 64,000 miles and 2 years extra. and at worst- doesn't even come into play at all since the factory powertrain warranty on Rams is 5/100,000 anyway.
I've seen people raising holy hell in the service department with their extended warranties saying "The salesman told me that it adds 100,000 miles to my factory warranty!" "Right here, read the print on the back, it's a warranty that takes you TO 100,000 miles or 5 years, which ever occurs first.
Without any proof in writing from someone, it's just a "crazy customer trying to pull one over on the dealership".
And you're more likely to run out of time before you use up the full 100,000 miles (17500 miles per year is the U.S. average driven by people these days). So after 5 years, most people aren't even at 90,000 miles.
Are there stories of people who have benefited by Extended warranties? Yes. There are a few people who have the "lemon" vehicle with more issues than the other vehicles of that model. But there are ALOT more people who never use the extended warranties.
PLUS- most after market extended warranties have a "if you don't use this, we will buy it back after the term ends" clause. So, that makes people think about paying for "affordable" repairs and saving the warranty for "really big stuff later on" and hoping they can get a refund for the unused warranty. I mean, with the carrot dangling in front of you for a refund on your $2000 investment, why not pay for the $450 repair. Or the $850 repair 3 months later. Or the 1250 repair later on. Wait.. so now I'm $2550 into it, and I can't get reimbursed for my paid repairs, because they need prior authorization??? SO, Now I've paid $2550 in repairs, plus $2000 for a warranty? I'd better not use it, I NEED the $2000 refunded when I sell this car just to break even.
It's weird- the psychology that makes people buy peace of mind, then, when faced with getting money back if they don't use it, end up spending money on repairs anyway.
I've seen it repeat itself many times, first hand.