I'd shop around before accepting that offer. I bought an extended warranty for my '98 E300 last August - a year ago. I went with warranty direct - http://www.warrantydirect.com It was $2K and runs until the car reaches 100K miles or until August 2008, whichever comes first. It's an exclusionary warranty, which is a fancy way of saying that it covers everything on the entire car, except for things which are specifically listed as not covered. Stuff which isn't covered falls along the lines of paint & trim, consumables like brake pads & rotors, fan belts, that kind of thing.