Quote:
Originally Posted by Kafkaesque328
Extended warranties are like any insurance - you will always pay out more than you get back and you never 'beat the house'.
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Extended warranties are extended service contracts(ESCs), and many people think those are same as new car bumper-to-bumper warranty. ESCs work a bit worse than auto insurance, namely, there is usually a maximum limit of lifetime payout that is set at market value of the car during the repair. So if the car now is worth, say, $10k, and there was a previous repair for $2k, the current repair won't be paid more than $8k.
In contrast, for an auto insurance policy, any damage is limited by current market value. E.g. if car is worth $10k, and previous claims were $2k, any current repair is still limited at $10k(or some % of that before the car is totaled).