When you buy a used car, it is wise to purchase an extended warranty. Extended warranties protect you and the person you bought the car from. For example, if you buy a used car with a transmission that is about to go out, the warranty will cover the repair and save you money. On the other hand, the owner of the car will still be responsible for paying for the repair. With extended warranties, you will pay a small upfront cost. However, you will save thousands of dollars in the long run. You will even get your money back if there are no issues. Therefore, this is a very small risk that can save you a lot of money.