How to Cancel Car Extended Warranty
Michael Collado is a car buying expert and has been a professional automotive writer since 2009. He’s written about dealership sales, vehicle reviews and comparisons, and service and maintenance for over 100 national automotive dealerships. Previously, Collado was a copywriter at the ad agency TBWA/Chiat/Day where he worked on brand campaigns for Nissan, ABC Television, Sony PlayStation, and Energizer. His recognition in the ad industry includes awards from Communication Arts and The Clios.
Collado has a Bachelor’s degree from the University of South Florida, with a major in Psychology and a minor in Marketing.
Do you have an extended warranty that you would like to cancel?
Chances are you don’t know where to get started. You may not even know if you can cancel your contract.
Don’t worry! We've done all the research for you and even included some easy-to-use templates you can send to providers.
Table of Contents
Reasons for Cancelling Extended Car Warranty
First, you should carefully consider if you need to cancel your extended warranty.
There are typically five reasons why someone will want to cancel their extended warranty contract.
Cost
Cost is perhaps the number one reason why people want to cancel their extended warranty. Before you crunch the numbers, you will want to consider a couple of things.
Is your vehicle model known for not being reliable? For instance, Land Rovers do not have the best reputation when it comes to reliability, while Toyotas are known for being extremely reliable.
Also, consider how long you will drive the vehicle. Finally, consider the average repair cost of your vehicle.
Exclusions
Perhaps your extended warranty doesn’t cover everything. For instance, if your extended warranty doesn’t cover brake repairs, then you may not feel that the warranty is worth it.
Be sure to check for all the exclusions on the contract and then consider the cost.
Selling or Trading In
If you are selling or trading in your vehicle, then obviously, your extended warranty will make no sense to keep.
In this case, you should cancel right after selling or trading in your vehicle.
Coverage Starts Later
Perhaps the coverage on your extended warranty doesn't start until a later date.
Be sure to carefully check the start date on your coverage and check to see if it makes sense for you.
Didn’t Agree to Sign Up
There are some cases where you may have been tricked into signing up for an extended warranty. If this has happened to you, then you will want to have it canceled right away.
Be sure to check out our template that you can submit to properly cancel your extended car warranty.
Check out our guide on car warranties vs. car insurance.
How to Cancel Extended Warranty
When you have decided that you want to cancel your extended car warranty, then you will need to take the proper steps.
Warranty companies or dealerships do not want to lose your business, so they will make you “jump through” some hoops to get this done.
Read the Fine Print
Be sure to read the fine print. Unfortunately, the car warranty companies don’t want you to cancel. Therefore, you will need to break out the magnifying glass to see how you cancel.
All extended warranty contracts should have a fine print that details steps to cancel the coverage. Also, be sure to check the status of your warranty before canceling.
Write a Letter
You will want to put your request for cancellation in writing. That way, you have a paper trail and you will be able to use it as evidence if the company continues to bill you after you have requested cancellation.
Be sure to use the template that we have provided later in this article.
Make a Phone Call
Most warranty companies will want to speak with you directly. Sometimes, they will do this to talk you out of canceling the coverage.
If you want to find out which number to call, check the website of the warranty company. Also, be sure to contact the dealer if you purchased your coverage at a dealership.
Follow Up
Finally, you will need to make sure that your coverage has ended to ensure that you are not being billed. You should call the warranty company to confirm that your vehicle is no longer covered.
Cancel Extended Warranty Template
If you have a loan for your vehicle in place, then you will want to use this template to request the formal cancellation of your extended warranty:
Loan on Vehicle Email Template
Dealership Name
ATTN: Accounting Department
ATTN: Finance Manager
DATE: (Day/Month/Year)
Please cancel my Vehicle Service Contract on VIN number ___________.
The vehicle is a (year make model) purchased from your
dealership in (month/year) under the name(s) of ______________________.
The odometer reads: _________.
I understand that the amount will be sent to my lender to be applied to the principal balance.
Feel free to contact me by phone at _ _ _ – _ _ _ – _ _ _ _
Feel free to contact by email at ___________________.
I/we will follow up on this within a reasonable amount of time.
Thank you in advance
Your Name
If you are trading your vehicle, then you will want to use the following template
Trade-In Email Template
Dealership Name
ATTN: Accounting Department
ATTN: Finance Manager
DATE: (Day/Month/Year)
Please cancel my Vehicle Service Contract on VIN number ___________.
This is a written notice to cancel my/our Vehicle Service Contract on
VIN number ________________.
The vehicle is a (year make model) purchased from your dealership in (month/year) under the name(s) of ________________.
This vehicle has been traded this vehicle and has attached the information you need for the cancellation to this written request.
The odometer reads: _________.
I understand that the amount will be sent to my lender to be applied to the principal balance.
Feel free to contact me by phone at _ _ _ – _ _ _ – _ _ _ _
Feel free to contact by email at ___________________.
I/we will follow up on this within a reasonable amount of time.
Thank you in advance
Your Name
How Much Money Will I Get Back If I Cancel?
Some contacts will allow you to receive a full refund if you cancel within a specific period. Usually, that time is anywhere from 30 to 60 days.
Most companies will refund you on a prorated basis. For instance, if you purchased a 36-month extended warranty and you cancel with 10 months left, they will refund the 10 months of unused coverage.
How to Avoid Warranty Issues
You can avoid getting an extended warranty by refusing any warranty coverage when offered. Be sure to look over any vehicle purchasing contract, and see what items are covered and not covered under the warranty.
Sometimes an unscrupulous dealership will try to sneak in extended warranty coverage. If you have any questions about the contract, be sure to ask the dealership manager before signing anything.
