The additional warranty does not cover wearbles:
brakes, tires, rubber hoses, belts, fluids, upholstrey rubbing through (but they will cover seperated seams) and the like.
The way they make money on the warranty is by people not using them or not keeping the vehicle for a long time.
Most people do not keep a car more than 3-4 years and only put on average mileage...the additional warranty is never tapped into therefore, $$$ are made by the warranty co and the dealership.
If the warranty is used effectively (keeping and driving the car for many years, having more than one item addressed per visit to make the deductible payment effective, AND actually having things repaired instead of letting them go) The consumer can come out way ahead.
On our Caravan, they replaced squeaking interior panels (broken retainers), bad window regulators, leaking AC lines, A rusty coolant line (alone this was over $1000.00), a fogging head lamp, a sticky seat track, 3 tranmissions and much more - all under the extended warranty
I have worked on cars for the last 25 years and STILL get the extended warranty...but I do keep cars for a long time (The Nitro is new but my other car has 180,000 miles on it and still going strong)