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I recently purchased a 2004 pmv. The company I purchased the vehicle from tell me it would be in MY best interest to take out an insurance protection policy for 3 years which would cost another $1300. Is that necessary or is it another means of making money?

I assume you are referring to a mechanical insurance policy? It is always good to have a mechanical warranty policy for a used car but the consumer guarantees act (CGA) does cover you for a reasonable amount of time if you have bought the vehicle as a private individual from a registered motor vehicle trader - not by auction or private sale.

It is a lot of money but after time (maybe three to six months) the CGA is less effective and the mechanical warranty policy will be good to have.

But it is your decision to make whether you opt for this cover or not - also check the terms and conditions.