Research in marketing has extensively examined the signaling effects of product warranties on consumer perceptions. While this stream of research has focused on the initial product warranties offered by the manufacturer, studies of extended warranties, which protect consumers against product breakdowns beyond the warranty constraints of the manufacturer, are relatively scarce. Given that many consumer durable goods are cross-sold with extended warranty policies, and considering the growth in consumer spending in this category, it is essential to understand the mechanism by which extended warranty prices are determined in the marketplace. Using data on over 8000 product offers in seven durable goods categories, the drivers of the prices of extended warranties are empirically identified. The results reveal that the prices of extended warranties systematically vary across product categories and brands, and are further affected by the seller's decision to use odd price endings for the product being insured. The influences of warranty length and price level of the protected product on extended warranty prices are also explored. The paper concludes with a discussion of the findings and research, public policy and marketing implications.