Actually get a chuckle out of reading this thread. You guys are funny!
"Your an idiot if you don't buy an extended warranty!"
"Your an idiot for buying an extended warranty!"
Having been both a warranty buyer and a warranty abstainer, I'd have to say there are a couple factors that should help you make this decision:
1. Aversion to risk - if you are one of those people that just can't tolerate any risk, well, I'd wonder why you are buying a used vehicle in the first place. However, that being said, if you are one of these folks, you should probably buy the extended warranty.
2. Not handy - if you are not handy, or have no time to work on the used vehicle you bought, you should probably spend the cash.
3. Cost of average repair - Remember to evaluate what the cost of an average repair is. If it is $500, and you have a $200 deductible, it would take 4 repairs to make up the cost of a $1200 extended warranty.
Here are some examples from my personal experience:
1. 1998 Civic - I bought this car new, and having come from an old 85 200sx with 300k on it, I went from one extreme to the other, from having to fix my car daily, to having a car that was brand new. I paid $800 for a 7yr/160k km warranty extension from 5yr/100k km. Ignoring the cost of financing this $800 (I was 21 and didn't have $22k lying around), this actually ended up being a good decision. At 160k, I had issues with my clutch, and ended up getting my transmission rebuilt, all at a cost of $100 + the wear part (clutch friction disc).
2. 2005 Pathfinder - declined this coverage, and so far after 5 years I am way ahead of any insurance premium I would have had to pay ($1500 IIRC). But I have done any repairs required myself. And most of these repairs were maintenance in my opinion.
3. 28' Keystone Passport - declined the coverage, It was $2500. I looked at what could possibly go wrong... if the fridge went, ~$800. Leaks can be fixed with goop. Everything else would have to be damaged, and therefore covered by insurance. This was a bad deal.
Another thing to consider is how easy a warranty company is to work with. What do they require to consider your claim? Are you stuck with a certain service shop or chain?
Based on my experience, and what I have read over the years, many of these aftermarket warranties are not worth the paper they are written on, so you are essentially throwing your money out the window. Most of the success people have had is when they actually purchase this coverage directly from the dealer, and it is branded as an actual manufacturer coverage, though usually you will be stuck with having to bring your vehicle in to the dealer instead of a shop of your choice.
In conclusion, I don't think people on either side of this issue are inherently idiotic. The only idiots out there are the ones who don't consider all of the facts. I've only covered a handful of the considerations above, what are some other considerations?