I sold cars for about 11 years. First, to clarify a big misconception. Manufacturers arent allowed to sell an extended warranty for their own product. They arent warranties, they are service contracts. They are ALL aftermarket. Some are labeled like "(Manufacturer name) extended service contract by Acme" or the like.
With that said, NEVER finance a service contract, prepaid maintenance contracts, or if you can help it, sales tax because it doesnt add value to the vehicle, and should you sell it before its paid off, you'll be that much deeper in the red. The average length of ownership of cars in the US is 39 months. The average car loan is 68 months.
Part 2:
If Your vehicle has a 3 yr/36,000 mile warranty, buying a 5 year/60,000 mile warranty is really a 2 year/24000 mile extension. Most service contracts start on the day you buy them, and not AFTER the manufacturer's warranty ends. Check the fine print. Ive heard Finance guys at a dealership say it begins AFTER the factory warranty, because they know theyll be gone and working at another dealership in 3 years when you find out otherwise. Good luck complaining, they'll just point to the fine print and say "Read here, the dealership cant be responsible for your mistake".
3. If you do have a claim, you'll almost always have a deductible to pay out of pocket. Most extended service contracts have a $100 deductible per ISSUE, (NOT service visit). Add that to your costs too. They count on this keeping you from claiming so many claims, especially those less than $100.
Personally, I would NEVER get one because they only repair the bare minimum to keep your vehicle going. Need a new transmission? Theyll replace the worn/broken component, not the whole thing.
They arent worth the paper theyre wrotten on .
Avoid.