That does seem like a lot of money. The motor on a Rebel is pretty simple as far as parts go, and pretty simple to work on as far as labour goes. That warranty would pay off for you would be if you had a catastrophic engine failure, but your Honda is still relatively new and Hondas generally don't grenade themselves very often as long as they are looked after. If the motor is running well without issues on delivery, it should continue to run like a Swiss watch for a long time to come. I would pass on the warranty.
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