Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.

How to cancel an extended car warranty

Save money by scrapping a policy you'll probably never use.

Updated

Fact checked

Editor's choice: Carvana

Carvana logo
  • Most credit types welcome
  • 45-day preapproval
  • Seven-day guarantee
See your rate

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.

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

Data indicated here is updated regularly
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.
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.
CarsDirect auto loans
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.
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.
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.
LightStream Auto Loans
Good to excellent credit
Competitive
2 to 7 years
Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
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.
loading

Compare up to 4 providers

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

More guides on Finder

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site