The jury is out as to whether extended warranties are a good investment. Some people believe an extended warranty is worth the peace of mind it brings. Others say it is a scam that lines the pockets of dealers, but rarely benefits the buyer.

An extended warranty, for those who aren’t familiar with the term, is a contract that covers specified repairs and problems that may occur after the manufacturer's warranty expires. They are sold by dealers and pitched as a way to drive worry free for as long as the warranty lasts.

Many manufacturers offer basic warranties while others (including Hyundai, Kia, Audi, Acura, BMW, Cadillac, Volvo, Saab, Mercedes, Lincoln, Lexus, Jaguar and Infiniti) offer more comprehensive extended warranties. Lincoln has a deluxe extended warranty program, providing customers with four years of roadside assistance, emergency-travel-expense reimbursement, destination assistance and trip planning. Audi and BMW both treat their customers to free maintenance for four years or 50,000 miles.

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Although an extended warranty can save you money and stress, you may want to consider buying a car with a proven maintenance record and putting the money intended for an extended warranty towards a larger down payment.

If you decide to buy an extended warranty ask the dealer some pointed questions:

• What is the deductible? Does it apply per visit or for each individual repair? Some warranties charge a deductible of $50 per repair, which means that you could pay considerably more than the $50 deductible for just one visit.

• How much does the warranty cost? Some dealers will roll the price of the warranty into the car loan so buyers barely notice they have paid several hundred dollars more than they planned. Know what you are spending.

• Is the warranty transferable and is there a fee to transfer the warranty if you sell the car?

• Are there limitations? For instance, some warranties are only valid if you get regular oil changes and routine maintenance done at their shop.

• How long will it take for repairs to be approved? In some cases, repairs will be delayed until an adjustor can inspect the vehicle and authorize payment. This can take a few days or a few weeks.

• What repairs and parts are covered by the warranty? Most extended warranties cover repairs to power train parts such as the engine and transmission but do not cover parts that often have problems, such as the brakes.

Do your homework on extended warranties, and make the decision that is best for you and your family.