I used to work at a company that sold warranties of this sort. This one looks even worse than those; when buying a used car, a pre-existing condition is precisely what you'd want the warranty to cover! You're not worried that the car will suddenly break down for no reason; you're worried that it has an existing problem that you don't know about.

In truth, car repairs can be expensive, but not so expensive that a car warranty like this is a good deal. And it's definitely not a good deal at the $3000 or so they cost from the company I worked for (which, due to bad publicity, is now nearly out of business).