[thstone]

Unfortunately, there isn't any good methodical way to calculate the value of an extended warranty because you'd have to know that likely failure modes and failure rates.

Of course, Porsche knows those numbers and that is how they came up with a price of $2495 for an add'l 3 yrs/20K miles. Generally, you can safely assume that Porshce believes that they will come out ahead on the deal.

With that being said, the question comes down to three things:

1. Can you afford to pay for repairs yourself once the standard warranty expires or are you cash-short most of the time?

2. Do you want "worst case" insurance to provide coverage if the engine or tranny goes?

3. Is it easier for you to roll the expected costs of repairs from years 4-7 into the price of the car and finance them over the life of the loan even if you might be over-paying a little?

I bought both of my BMW's with an extended warranty and they turned out to be about break even when compared with the extermely high list prices that the dealer quoted for repairs. At actual dealer cost for the repairs, BMW made decent money on the deal. But what I really wanted (and was willing to pay for) was worst case insurance for an engine or tranny failure (which never occurred but I slept better knowing that it was there).