It's a tricky thing with the extended warranty and mods. When I purchased the Audi CPO extended warranty, they had to do an inspection of the car. Luckily, it was before all the mods and the dealership serviced the car up until that point.
I usually try to revert to stock if possible before heading to a mod friendly dealership to get repairs done. My personal experience, I had 3 coolant leaks and one vacuum hose leak, all covered under warranty. The fuel pump went 4 weeks before the recall, but it was covered anyways. For me, since the car was leased, the extended warranty was a no brainer.
However, if you plan to extensively mod the car and engine, then as others suggested, take that money and put it into your car.
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