Is there a rule of thumb to use to determine when it might be worth purchasing an extended service contract?
My specific case, a 2001 Toyota Avalon (current blue book $5,500) with 144,000 miles. I intend to keep it another 3 years and the contract which covers engine, transmission, drive axle and engine cooling components would cost me $2,992 payable monthly over two years at no interest. There is a $100 deductible associated with each claim. The policy is transferable or refunded on a pro-rated basis if I do decide to sell within the three years. It is offered through the dealership ( a reputable one in this area) which gives me confidence that they will stand behind it.
As much as I would like to hear comments on the general case, I am particularly interested to hear thoughts on my current situation.