All it takes is one failure ......
You also go this route with life insurance?
I can pay for a repair, even a large one. I can't pay for a new car if I total it. I can't pay for a new house if it burns down.
You only buy insurance for things you can't afford. Self insuring is always cheaper in the long run - if it wasn't the Insurance companies and warranty companies would be out of business. It's simply a matter of how much risk you can take. Corporations don't buy car insurance normally - it's cheaper to just insure themselves.
I also have life insurance but once I retire and have enough income from pensions, 401ks and SS I'll probably drop it.
What I don't understand is why people freak out over a $2k repair bill but don't bat an eye at paying $1500 up front for a warranty they may not use at all or at least not for a few years. Is it just because it can be financed so it's only a few dollars per month?
If you really can't afford a large repair bill then it makes sense to finance it with the vehicle.
If you can afford a large repair bill every now and then, you can usually save money by self insuring. But you have to look at the total cost over all vehicles, not just one or two. Like I said I'd be perfectly ok with a $4k repair because I know I've saved over $8k already, so I'm $4k ahead.
But I guess a lot of folks only think about monthly payments and not total cost.