How to cancel an extended car warranty

Also called vehicle service contracts, extended warranties cover repair costs after your manufacturer warranty ends. But because many require you to meet a deductible before they’ll pay for repairs, these warranties are rarely worth it. The median cost of an extended warranty was around $1,200 in 2013 — despite most repairs costing less than that.

If you bought one on impulse and have since come to regret it, canceling your extended warranty could put hundreds of dollars back into your pocket.

Hide

Show

Editor's choice

Carvana

Find out more Go to site

How to cancel an extended warranty

Extended car warranties aren’t set in stone. Most dealerships and third-party companies allow you to cancel it at any time to receive a prorated refund. Follow these steps to get started:

1. Review your policy. Your policy should list information on how to cancel and any fees you might have to pay. If not, contact the customer service team of the company you purchased the warranty from to ask what the process is.
2. Stay patient and stand your ground. When you cancel an extended warranty, the company you bought it from stands to lose money. Because of that, you often have to jump through hoops to reach the right person and confirm that you want to cancel multiple times. Stay patient and stand your ground — you don’t have to stick with a policy you don’t want.
3. Save a copy of your cancellation form. You’ll likely need to fill out an online cancellation form or submit a request in person. Keep a copy of this so you can check up on the status and ensure you get your prorated refund.
4. Follow up with the company. Confirm that your cancellation has been processed and follow up if you haven’t received your refund after a few weeks.

3 reasons to cancel your extended warranty

If you’re still on the fence about your extended warranty, here are three reasons why you might want to pull the plug:

• Adds to the total cost of your loan. If you wrapped your extended warranty into your car loan, you’re paying interest on something you may never use. Canceling can help you avoid that extra cost.
• Multiple exclusions. An extended warranty can be limited. If yours only cover minor repairs — but requires a large deductible — it may be worth canceling and saving up for potential repairs yourself.
• You have to wait to use it anyways. An extended warranty on a new car won’t kick in until after the manufacturer warranty ends. And since extended warranties can be purchased at any time, you could save yourself hundreds of dollars by canceling it now and renewing it when you need it.

Why you may want to leave it in place

An extended warranty does have one benefit: peace of mind. Sales teams bank on this by offering a low monthly payment in exchange for potential savings on repairs down the road. It could be worth it if you’ve bought a used vehicle or one known for mechanical problems.

Around 55% of people never use their extended warranty, according to a 2014 Consumer Reports study. But that means 45% of people do — and that shouldn’t be discounted. There may come a time when you need an expensive part replaced. And an extended warranty could make the difference between paying a small deductible and having to spend thousands for a repair.

Compare your car loan options

{"niche":"USFCL"}

Sort by:

Name	Product	Filter Values	Minimum credit score	APR	Loan term	Requirements
Carvana			No minimum credit score	3.9% to 27.9%	Varies	18+ years old, annual income of $4,000+, no active bankruptcies	Get pre-qualified for used car financing and receive competitive, personalized rates.	Go to site More Info	Compare	loading Fetching your data...
car.Loan.com Car Loans			300	Varies by network lender	Varies by lender	Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.	Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.	Go to site More Info	Compare	loading Fetching your data...
CarsDirect auto loans			No minimum credit score	Varies by network lender	Varies by network lender	Must provide proof of income, proof of residence, and proof of insurance.	Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.	Go to site More Info	Compare	loading Fetching your data...
Auto Credit Express Car Loans			300	Varies	Varies	Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.	Get connected with an auto lender near you, even if you have bad credit.	Go to site More Info	Compare	loading Fetching your data...
Monevo Auto Loans			500	3.99% to 35.99%	3 months to 12 years	Credit score of 500+, legal US resident and ages 18+.	Quickly compare multiple online lenders with competitive rates depending on your credit.	Go to site More Info	Compare	loading Fetching your data...
LendingTree			Good to excellent credit	Starting at 3.09%	Varies by lender	18+ years old, good to excellent credit, US citizen	Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.	Go to site More Info	Compare	loading Fetching your data...
myAutoloan.com Car Loans			550	1.79% to 27%		550+ credit score, no open bankruptcies, $24,000+ annual income, US citizen or permanent resident, 18+ years old	Get up to four offers in minutes through one simple application. Multiple financing types available including new cars, used cars and refinancing.	Go to site More Info	Compare	loading Fetching your data...

loading

Compare up to 4 providers

Clear selection

Compare

Bottom line

If you’ve decided to cancel your extended warranty, stick to your guns and don’t let up. But if you’re on the fence, check out our guide to extended warranties and car loans to help you make an informed decision.

Frequently asked questions

• How much of a refund can I expect?

  Refunds are prorated, which means the amount you receive will be calculated based on the time that has passed since you first bought the warranty. The sooner you cancel, the more you’ll be refunded.

• What should I do if I never agreed to an extended warranty?

  If you find paperwork for an extended warranty you never agreed to, contact a lawyer. They can walk you through the next steps and help you determine if you’ve been scammed.

• Is an extended warranty ever worth it?

  An extended warranty can be worth it for some people — especially if you bought a car that’s notorious for breaking down. But it all depends on how much it costs, what it covers and the deductible required before coverage kicks in.