Should I buy a warranty?

[johnsimion]

Originally Posted by san rensho

Just got a 2000 2.7 with 115k miles. Car is in great shape but I'm getting paranoid with all the IMS horror stories on the interwebs. I found a drivetrain warranty plan for 5 years for $4000. Does a warranty make sense?

No - you'd be spending a large percentage of your car's present value on a benefit that you probably won't need. Your car has already lasted 115K miles. If it was going to blow, it probably would have by now. Even if it did blow, the car still has some value as a roller. If you sold it for roller value and put it with the $4K you saved by not buying the warranty, you could afford to get another car. Plus, doing it this way preserves all your options and leaves your money in the bank in case of emergency.

An extended warranty makes more sense for a newer vehicle where the cost of the warranty is only a fraction of the car's value and the replace-or-repair cost is much higher.