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Extended warranties typically can and do save you money in the long run. If you're going to lease the vehicle and turn it in at the end of the lease period then this extra cost is probably not for you. If you purchased your vehicle, you may want to consider one based on your planned length of ownership. While any extended warranty may seem expensive at the time of purchase, they typically pay for themselves for long-term owners, and some even have a buy-back clause that makes them a "can't lose" investment.
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Who is behind the warranty that you're considering? An extended auto warranty may be backed by an independent warranty company (these are known as aftermarket warranties) or by the covered vehicle's manufacturer. Knowing who will be underwriting your policy can give you insight into the strengths and weaknesses of the contract you're considering. Manufacturer-backed warranties score very highly when it comes to ease of use. However, aftermarket warranties are often cheaper. (If you opt to purchase an aftermarket warranty, take a look at how the company's financial strength has been rated by A.M. Best and/or Standard & Poor's; this will give you an indication as to its ability to pay your claim. Your safest bet is to choose a company that has a minimum "A" rating with Standard & Poor's, and/or a minimum "A" or "A-" rating with A.M. Best.)
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