[JohnnyQuik]

As others have mentioned, the companies offering extended warranties make money of the difference between the premiums they collect and the claims they pay. Therefore, as a whole it's a bad deal for their customers. They seek to maximize premiums and to minimize claims paid, so they'll likely find any reason they can not to pay you. Read the fine print. That being said, you might be the lucky one who saves money on a major repair. What warranties and service contracts allow you to do is budget the amount of money you spend on repair costs thus avoiding a catastrophic loss. Obviously, a transferrable warranty adds some of the cost of the warranty to the value of the car if you sell during the warranty period.