Extended warranties for appliances and electronics are the big losers. A good extended warranty for a vehicle is never a bad decision, especially a vehicle like a Cadillac, BMW, Lexus etc. These cars have way too many failure points that are costly to fix when they do fail. All of them, not just one or the other.
Ur7x is exactly right, the key to getting the most out of a warranty is finding one with the LEAST exclusions or NO exclusions, finding one that is ESTABLISHED and has existed for along time, and *MOST IMPORTANTLY* check THE MAXIMUM COVERAGE PAYOUT OF THE WARRANTY ON THE CONTRACT!!!
Some warranty companies, in addition to getting away with sneaky exclusionary policies, also limit the maximum payout the warranty will give REGARDLESS of whatever parts are covered. They may say in fine print "Maximum engine coverage 2500, Transmission 1500, Differential 1500 etc etc". These are the dangerous kind.
Automotive warranty companies *do not* always win on individual policy basis, they need to have a razor edged business plan for warranties sold as a whole. In fact, a poor business plan is why MANY of the earlier warranty companies folded when their offshore holding entities went broke. They were paying out policies in good faith out of a fund that was getting smaller and smaller. In fact, in a policy that cost me 1500.00 on my 1996 Lincoln Continental, SmartChoice Warranty Co. actually ended up paying out *MORE* in suspension repairs on my car than the cost of the warranty, as well as a couple of other claims. The way automotive extended warranties make money is not necessarily on each individual policy but by applying a heavily engineered calculation or spread to the total warranties they sell. They expect that say for ever 4 warranties sold, 3 people will never have more than a 500.00 claim, or will never make a claim period. These are the LIONS share of policies that are sold on your average Focus or F150 Pickup truck.
Ill give you an analogy you can use... Its just like with "mail in rebates" you see all over the place now. Why dont they just GIVE you the discount? Why? Because they are FULLY aware MOST people will NEVER get around to actually mailing the stupid things in, EVEN when it could result in some products ending up free or nearly free. Still, some people *DO* mail all of their rebate coupons in and guess what, they DO get paid.
Warranties are the same way. So if you are purchasing a vehicle with a potential for expensive repairs, you should be the one "mailing in the coupon". You WILL need it at some point. The key is to find a warranty with a high or unlimited maximum covered payout, AND that has an established track record. GMPP and WarrantyDirect rank among the best. Remember also that most of the good policies give you the ability to exit the warranty early and get most of your money back if you change your mind.
You wouldnt buy a NEW car without an expectation of a comprehensive warranty, and I guarantee you you are paying for it in the price of the car. "Certified" pre-owned is the same way.