Sometimes you end up trading or selling your vehicle sooner than you expected to. So, just how do you go about canceling extended car warranty and getting a refund if you trade in or sell your car?
Here’s the good new: You actually have two options when you get rid of a car that still has some extended warranty time left on it.
1. Canceling Extended Car Warranty
If you’re trading your vehicle in, this is definitely your best option. Always make sure this is an option BEFORE you buy your extended warranty. A good warranty will always provide this option in the event that the vehicle is sold, traded, or totaled in an accident.
All you have to do is call and let them know you are not keeping the vehicle. They’ll have you fax or mail them a statement confirming this (to be sure that no one is canceling your extended warranty without your consent), after which your refund will be calculated and processed.
Your refund will be pro-rated, which means it will be based on two things:
- How much time/miles you have left on the warranty
- The amount of repairs the warranty has paid for so far
From this information, your refund amount is calculated.
2. How To Transfer Extended Warranty To The New Owner
Many people find this to be easier, faster, and more profitable than getting canceling an extended car warranty and getting a refund (you’ll get more money for your car and warranty combined).
Generally there is a small transfer fee, usually between $50-100 that comes with canceling extended car warranty. If you’re selling your vehicle privately, you can add the cost of the warranty and transfer fee into the price you’re selling the vehicle for.
This works out well for you as the seller because:
- You get the money back you spent on the warranty.
- You’ll find that overall it’s much easier to sell a car that’s protected than it is to sell one “as-is”.
It works out well for the buyer because:
- They’re buying a used car that would normally not be covered under warranty at the time of purchase
- They’re getting a higher level of coverage than would be available if they had to buy a warranty for a vehicle that does not currently have one.
- They get to skip all the nonsense and hassle that goes with buying a car at a dealership.
You Still Have Time To Review After You Pay For It
Don’t think that because you’ve paid it, you’re stuck with it forever if it turns out to be the wrong one for you. Canceling your coverage is possible even after you pay for it! You actually have 30 days (and up to 60 days in some states) to review your extended auto warranty service agreement and make sure it’s everything you were expecting it to be.
It doesn’t matter if you’ve only paid a portion of it, or if you’ve gone ahead and paid for the whole thing outright.
It also doesn’t matter whether you bought it at a dealership, online, or over the phone. Within the first thirty days, you have the right to a 100% money back guarantee on any extended warranty that you buy for your vehicle.