What are the basics of used car warranty?

Stay away is my advice. Not worth the paper you sign on. A friend of mine bought a good condition near new ute, the engine shat itself completely after about a month and the warranty covered nothing. Be careful.

Pretty much useless as @Arbornaut says. Most will have an exclusion cause for “wear and tear” but just about 100% of what can go wrong with a used car is down to wear and tear. And if it isn’t, you can’t prove it isn’t.

You would be better off putting the same money into a jar (or even better, a savings account) to save up for when you need to make repairs.

Exactly

I would certainly stay away from it as all state. It is more and insurance policy than a warranty. A manufacturer offers a warranty because they know the failure rate of items and the probability. They get creidt for parts that are assembled that do not meet spec as well.
On a used car, it is a complete crap shoot. It is an insurance policy in that you pay an orginization a relative large amount of money in the hopes nothing fails. Its a used car! things fail when it get used and old. If you are unsure, dont buy the car. Do the math, $50 extra a month for 3–4-5 years. They cap the miles on it too. There is usually a deductable also. The so called used car warranty companies are not the manufacturer and have many disclamers and clauses. Some require you to pay in advance and you get reimbursed after they review it. Some have large deductibles.
My opinion is pretty low on them. Take the money that you would be paying for one and tuck it into an account and use it as your own insurance.

Just another gimmick to get your money. most of these warranties carry a whole page of small print. so small, that they are hoping you have bad eyesight and overlook what is not covered.

Instead of a useless warranty, find a trusted, good mechanic and have him check your vehicle over at least once every six months. if your vehicle is heading for mechanical problems, your mechanic friend will spot this in plenty of time, before something major developes with your car. i do this and it has worked absolutely great for me and my Toyota.

It looks like I am in the minority, but I had a wonderful experience. I purchased a used car warranty through my credit union and it paid for itself with one use. There were three plans to choose from depending on the coverage you want. They use http://www.iwsgroup.com/default.asp

The thing for me was, I knew there was a good chance of something going wrong with this particular car and I also knew it had to last me for a long time. Otherwise I may not have purchased it.

@Supacase glad you had a positive experience

@john65pennington gives absolutely the best advice. A good mechanic that you can trust is worth his weight in gold.