How to Cancel an Extended Car Warranty

“We’ve been trying to reach you about your car’s extended warranty” became a meme because everyone with an active phone line on planet Earth receives daily calls just like this.

Even so, not all warranties are scams and not all companies force themselves onto prospective customers. Even if you’re happy with your warranty, there may be a time when you no longer need or want the coverage, in which case it’s time to cancel. There’s good news here, in that you’re most likely going to be able to cancel. The bad news is that companies don’t always make it easy. Here’s the lowdown.

What is an Extended Car Warranty?

Extended auto warranties provide coverage for maintenance and breakdowns after a vehicle’s factory warranty coverage has expired. Warranty coverage is generally sold in tiers, which means that you can purchase low level coverage or choose to buy coverage that includes nearly every moving part under your car’s hood.

What to Consider Before Getting an Extended Warranty?

The first and most important thing to remember when shopping for an extended warranty is that you might not need a warranty at all. If your car is relatively reliable and has shown that it is not a huge money pit, the added cost of an extended warranty might be a waste for you. If you’ve decided that an extended warranty is the way to go, be sure to shop around to find the coverage and pricing that work best for you. Most warranty providers offer various levels of coverage to allow you to pick the policy that fits your needs.

Can You Cancel an Extended Warranty?

Every warranty company is different, but in general, most offer the ability to cancel, either for a refund or a prorated refund. That’s the good news. The bad news is that you’re likely to face a tough time getting through the cancellation process. Auto warranty companies are persistent when trying to grab new customers and they’re just as tenacious at trying to keep existing customers. Make sure that you understand your contract and the fine print, and be firm in your answers when trying to cancel.

Why You Might Need to Cancel an Extended Warranty?

There are a variety of reasons you might want to cancel your extended warranty:

• If you’ve found that you’re experiencing more claim denials than approvals, you may decide that the warranty is not worth its cost.
• You’ve bought a used car and the warranty was rolled into your financing contract without your explicit knowledge.
• The costs of an extended warranty no longer make financial sense, even if the coverage is useful.
• You want to sell the car and the next owner either does not want the warranty or does not want to pay for it.

What Rights Do You Have?

The bottom line here is that you have as many rights as your warranty contract says you have. Your rights also depend on the laws of the state where you purchased the policy. If you purchased an extended warranty and the contract says that it’s non-refundable, you may be out of luck. The same thing goes for transferability, which can vary from provider to provider. How the cancellation plays out depends on the company and on how you’ve decided to pay for the plan. If you’re paying monthly, you may not see a refund check.

Read our Insider's Guide to Understanding Extended Warranties here.

Good Extended Car Warranty Companies to Consider

There is no shortage of extended warranty companies in the world. Some have more than their fair share of complaints, but there are some diamonds in the rough. CARCHEX is one of the best in the business, with several positive reviews, a transparent website, and great coverage options. Endurance is another warranty provider that should be on your watch list. It offers four simple coverage levels, exceptional customer service, and great added benefits, such as roadside assistance and lost key fob replacement.

For more on this topic, take a look at the Best Extended Warranty Companies in the industry here.