Every few weeks I get a letter from Ford trying to convince me to buy an extended warranty. That tells me it is an extremely profitable program for them. Like lottery tickets, warranties are a money loser for most buyers. And the way Ford corporate pushes the program, they must be bringing in a lot more money than they are paying out.
I only insure the things I cannot afford to replace like home, health, and liability. A $10k motor replacement will most definitely be inconvenient, but it sure won't affect my standard of living and I'm comfortable self-insuring.
Plus I've owned countless high-performance European cars out of warranty and am used to the risk. That and I don't mind doing little things myself like replacing alternators, window regulators, thermostats, pumps, belts, etc. If something is a lot of work, I'll find a local shop with a good reputation that is half the price of the dealership.
Betting $1,500-$2,000 that something major on my truck will break between mile 60k and 100k is a pretty big gamble. While one significant repair will recoup my cost, simply recouping my cost isn't worth it and like any good bet, I should expect at least a 2x payout for me to even consider it. Just to breakeven, I need at least a 50/50 chance of a $3k to $4k repair (at an independent shop) between mile 60k and 100k to make it a good investment.
And for those that are mechanically inclined, they know mid-life failures are rarest type of failure. As far as machines and mechanical components go, there are end of life failures and premature failures. End of life failures typically occur after 200k miles. Premature failures from manufacturing and assembly defects most often occur fairly quickly, and easily fall within the already covered 3/36k warranty. That means extended warranties are actually covering the period with the lowest risk of failure. That's why extended warranties are so profitable for the companies that sell them.
To learn more about failure rates through a product's lifecycle, check out the
"bathtub curve".