A brochure for Ford's program says: "you could save the amount of the plan cost with just one covered repair!"
General Motors' protection plan promises "peace of mind for the long run."
This one for a Honda extended warranty promises "no high repair cost surprises."
But Donato Vaccaro of the Consumer Reports national research center says extended warranties are a high-priced gamble.
"We surveyed eight thousand of our readers about extended warranties purchased on new 2001, 2002 vehicles. About two-thirds of them said the extended warranty did not pay off," says Vaccaro.
The extended warranties cost on average $1,000 but only provided an average benefit of $700. That's a net loss of $300.
"42% of the people in our survey didn't use the extended warranty at all, mainly because they didn't have repairs or because the manufactures' standard warranty covered the repair."
If you're buying a new car, Consumer Reports says your best bet is to buy a vehicle with a good record of reliability, so you can skip the extended warranty.
Consumer Reports tests this year showed Honda came out on top as the most reliable brand overall.
