As always I will state that technically you cannot have an extended warranty, However you can have an extended guarantee, but in fact what you are being offered is neither, it is an insurance policy.
The question is whether it is worth it? as has been stated previously you need to see exactly what is covered, and then you can make a considered guess as to whether the items included are likely to breakdown and if so how much they are to repair/replace.
The vast majority of extended guarantees are actually a money spinner for the company offering them and of course the insurance company that underwrites them, so it is hardly surprising that in most cases you will actually pay more for the policy than you are likely to need to claim back. (there are of course exceptions where a major claim is made).
Over the years I have refused to take out extended guarantees which has probably saved me £1000 or more, and yet the vast majority of items have continued to work without fault, and where a fault has occurred the cost of repair has been well within the savings I have made. Perhaps I have been lucky, and it does help that I can undertake most types of repair jobs my self, so on balance for me I do not find these policies attractive.
However if others are less able to undertake repairs, or they have a particular need for the feel of security these policies can offer then the balance of cost/benefit may swing the other way for them.
There is another point that you might wish to consider, If you pay the full premium up front now, you loose the use of it, But the dealer/insurance company have it when there is a low probability of a claim from you for the first part of the policy duration. Try to see if they can do a no interest instalment plan over the full period, You get the cover, but you don't get the full expense. Car insurers manage to do this so why not these policies.
Ultimately only you can decide if the deal is attractive or not.
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