Canceling your extended car warranty may seem like a daunting task, but it can be a wise decision if you no longer need the coverage or if it’s no longer cost-effective. In this step-by-step guide, we’ll explore the reasons you might consider canceling your extended warranty, walk you through the cancellation process, and share tips on what to expect afterward. By following these guidelines, you can navigate the cancellation process with confidence and potentially save money in the long run.
How to Cancel Your Extended Warranty
Scenario #1: Did I really pay that much for an extended warranty?
You’ve bought the car, only to realize that the price of the extended warranty you just purchased is way higher than you remembered. How could this be? The salesperson likely included the extended warranty in your monthly payment quote, and probably glanced over the total cost. Although you’ve already signed on the dotted line, not all hope is lost.
Step One: Look At Your Contract
Every extended warranty product has a ‘flat cancel’ period detailed in the contract. If you opt to cancel the extended warranty within the flat cancellation period, you will get a FULL refund. Typically, the extended warranty flat cancellation period is 30 to 60 days after the date of purchase.

Note: If you choose to cancel your extended warranty product, you will NOT receive a check in the mail. Your monthly payment remains the same unless you refinance. The refunded amount will be applied directly to your auto loan. While this isn’t ideal if you’re looking to rake in some cash, this does mean that you will eventually pay off your auto loan early, as the refund reduces the principal on the loan by that amount.
What if I’m outside of the ‘flat cancel’ period? No worries. You will receive a prorated refund applied to your auto loan’s principal balance.
Step Two: Contact the Dealership
The most direct way to cancel your extended warranty is to contact the accounting department at the dealership. The accounting department is usually responsible for processing the cancellation and refund paperwork, so this is the quickest way to complete the cancellation of your extended warranty. Be sure to take note of the name and phone number of the associate who assisted you. You’ll need that later.
Note: If you solely contact the finance manager at the dealership, there’s a decent chance that they will ‘sit on it’ to continue making money off of the extended warranty product that they sold you. This is why it’s best to contact the accounting department instead.
Step Three: Verify Cancellation
One week after contacting the dealership’s accounting department, call back to get a status update. Have they processed the cancellation? Can they email you proof of cancellation? If they haven’t gotten around to it yet, tell them you’ll be calling back in a few days to get another update.
Scenario #2: It’s time to sell or trade in, but I still have extended warranty coverage
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Maybe you’ve owned the vehicle for a few years, but now it’s time to say goodbye. You’re selling your vehicle, and you remember that you still have extended warranty coverage. Could you get a prorated refund now that you’re selling? Yes!
Step One: Provide the Purchase Order
After you’ve sold or traded the car, make a photocopy of the purchase order. The purchase order has the information that the dealer needs to process your extended warranty cancellation.
On the purchase order, either circle or highlight the following information:
- Your name and address
- Proof of no lien (balance owed should be zero)
- VIN number (of the car with the extended warranty, not your new car)
- Mileage on the vehicle
Step Two: Put It In Writing
You’re going to want to type (or write) a brief letter detailing your instructions for the cancellation. The letter should have the following essential information:
- Your name and contact information
- VIN number
- Approximate purchase date (month and year)
- Your request (immediate cancellation of the remaining extended warranty coverage with a prorated refund)
Step Three: Submit and Follow Up
Submit the purchase order and letter to the dealership where you purchased the vehicle. Be sure to find the contact information for the accounting office to ensure that your cancellation is expedited.
Follow up the next week to verify that the cancellation request has been received, and to find out if it has been processed. If the dealership hasn’t gotten around to it yet, call back until you receive verification that the cancellation has been processed.
How Refunds Work When Canceling Your Extended Car Warranty
If you decide to cancel your extended warranty, it’s important to note that you will not receive a check in the mail. Instead, the refunded amount will be applied directly to your auto loan, meaning your monthly payment will remain the same unless you refinance. While this may not be ideal if you were hoping to receive cash, the benefit is that the refund will reduce the principal on your loan, helping you pay off your auto loan earlier.
If you’re outside of the ‘flat cancel’ period, don’t worry. You will still receive a prorated refund, which will be applied to your auto loan’s principal balance. This ensures that even if you’re canceling your extended warranty later in the coverage period, you can still benefit from a reduced loan balance and a potential earlier payoff.
Use This Template to Cancel Your Extended Warranty
This template is for canceling a warranty for a vehicle with a loan in place.
ABC Dealership
Attention Accounting Department
Attention Finance Manager
DATE
Please cancel my Vehicle Service Contract on VIN number ___________.
It is a (year make model) that I/we purchased from your
dealership in (month/year) under the name(s) of ______________________.
The odometer on my vehicle currently reads: _________.
I understand that the amount will be sent to my lender to be applied to the principal balance.
Please call should you have any questions _ _ _ – _ _ _ – _ _ _ _
Please email should you have any questions ___________________.
I/we will follow up on this within a reasonable amount of time. Thank you for your immediate attention to this matter,
Your Signature
Download this template here.
Template For Trade-Ins
This template will help you cancel the extended warranty when you trade in your vehicle.
ABC Dealership
Attention: Accounting Department
Attention: Finance Manager
DATE – (the date you traded your vehicle on your new Purchase/Buyers Order)
This is a written notice to cancel my/our Vehicle Service Contract on
VIN number ________________.
It is a (year make model) that I/we purchased from your dealership in (month/year) under the name(s) of ________________.
I/we have traded this vehicle and have attached the information you need for cancellation to this written request.
Please call should you have any questions _ _ _ – _ _ _ – _ _ _ _
Please email should you have any questions ________________________
I/we will follow up on this within a reasonable amount of time. Thank you for your immediate attention to this matter.
Your Signature
Download this template here.
Let Us Know How It Goes!
In conclusion, canceling your extended car warranty can be a practical decision if it’s no longer necessary or cost-effective. By understanding the reasons for cancellation, following our step-by-step guide, and keeping our tips in mind, you can successfully navigate the cancellation process and potentially save money. Remember to keep all relevant documentation, communicate clearly with your warranty provider, and be persistent in your efforts. Ultimately, the key to a smooth cancellation process lies in being well-informed and prepared.
My dealer has given me the run around a bit with cancelling my extended warranty. They would not return my calls or emails, so I went into the dealership with my necessary paperwork & explained that I had contacted the company directly about cancelling my warranty. They did cooperate then with me, but I still felt uneasy with the way they were handling it. They explained to me that it would take 8 to 10 weeks to get my refund which would be going to my lienholder. I asked why 8 to 10 weeks when the company through which the warranty was purchased said the cancellation process usually takes 2 to 3 weeks. The dealer could not give me a reason why. He just stated “that is just how long it takes.” I really was hoping to have it all taken care of before my first payment, because I also want to refinance the loan through my local credit union (the dealership is not aware of me wanting to refinance), but now I will probably have to make one to two payments before I ever see a refund. I did take it upon myself to fax all the necessary paperwork to the company directly that the warranty is through. I am going to follow up with the company & when I know the cancellation has gone through, then I will call the dealership & let them know that I am aware the cancellation has taken place & hope that by me being a pain in their butt it will move things along. Not sure what else I can really do to speed things up. Also, wondering why would the dealer sit on this? What do they gain from delaying this? They are already losing the money & commission off of the sale of the warranty, correct?
Hi Stefani,
You do need to do the cancellation through the dealership you purchased it from. The company told you 2-3 weeks because that’s how long it generally takes them- on their end, once they receive notice from the dealership. The dealership then tells you 8-10 weeks because that’s about what it would be for the entire process. Now, I will tell you, it’s typically faster than that but the dealership gives themselves a cushion time just in case there’s something additional needed.
The reason I tell people to be sure to continue checking with the accounting department is because the Finance Manager wants to be sure he’s paid on it first as a “product sold” even though, it will still be a chargeback to the finance department. It’s part of his/her pay plan.
When it comes to paying off a loan or refinancing it, I also tell people to wait until you get your first statement in the mail because everything is in the middle of processing. You want to give the lender time to get your loan fully processed, a loan account number generated and your first payment sent out. I’ve only seen big problems when people try and payoff before this, so give it a little time. Lenders are generally pretty fast at getting your first payment sent out.
I do hope this helps!
Kimberly
CarEdge
How long should I wait to cancel this warranty? Id like to cancel as soon as possible. I called the finance manager who helped me and he said I have to wait 90 days to cancel. Is this true?
Hi Pam, The Finance Manager probably does not want you to cancel within the first 90 days so they avoid a chargeback. You can cancel an extended warranty at any time. Read your Cancellation clause on the extended warranty contract and see how long you have for a “Flat Cancel” where you get 100% of your money back. It’s typically within 30 or 60, sometimes 90 days.
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I bought a 2018 xt5 Cadillac for 29,000.00. So I bought a CPO Protection plus for 3,990.00. I decline the platinum wrap. So they pull their dealership CPO Platinum Protection Package for 4,999.00. I thought was signing for the CPO Protection plus. Now they are telling me that their COP Platinum Protection Package is not refundable and can’t cancel it. I feel they mislead me. Now l have 9000.00 dollar of warrantys. I don’t need 2 warranty of 9,000.00 dollars. I just wanted the CPO Protection plus. Is their a way l can get out of dealership warranty. The COP Platinum Package. It was misrepresentation.
I bought a 2018 xt5 Cadillac for 29,000.00. So I bought a CPO Protection plus for 3,990.00. I decline the platinum wrap. So they pull their dealership CPO Platinum Protection Package for 4,999.00. I thought was signing for the CPO Protection plus. Now they are telling me that their COP Platinum Protection Package is no refundable and can’t cancel it. I feel they mislead me. Now l have 9000.00 dollar of warrantys. I don’t need 2 warranty of 9,000.00 dollars. I just wanted the CPO Protection plus. Is their a way l can get out of dealership warranty. The COP Platinum Package. It was misrepresentation.
Hi Susan,
Since you said they are “telling you that” it can’t be canceled, take a very good look at the actual contract you signed for the product(s) and look for a Cancellation clause. Also, you should have signed a Menu Disclosure form that specifically shows what products you accepted and what products you declined. Ask for that form. In order for them to keep compliant, it must be in your deal folder. You’re right, you don’t need two extended warranties so check those product contracts and match them to the itemization on you Purchase/Buyer’s Order.
Susan, pull the contracts out of your paperwork. You should have copies of those signed contracts in your copy package. Look for the Cancellation clause on the document. If it truly is non-refundable, you want to see that, in writing, on that specific contract.
Went to the dealer and had him cancel an extended warranty.
Wanted a copy of the form that he filled out and he said I don’t get a copy.
This seems strange plus is there an invoice number, etc. on the form so I can track it’s progress?
The dealership is Joseph Chevrolet in Cincinnati, Ohio.
https://www.josephchevrolet.com/
Hi Sam, there won’t be an invoice number to track unfortunately. Be sure to follow up with the Accounting department – once a week if you want to – to see where your cancellation is in the process. For example, if there’s a loan ask, “has a check been sent to my lender for my cancellation and if so, when?” Or, if there’s not a loan and the refund is coming back to you ask, “at what stage is my refund check? Has it been sent to me and if so, at what date?” If the refund is going to a lender, be sure to check your balance periodically to see if it reflects the refund amount.
I have 2016 kia that is already paid off and did purchase extended warranty that would cover me up to 100K. I am planning/thinking of selling and am getting to 70k. Would a refund be provided to me since I only would have been covered for 10k miles as i was fully covered until 60k? Would they provide me with a check?
Hi Alex, If you have a current/active extended warranty on your vehicle that still has time and/or mileage left on it, yes. Cancel and get a refund for what’s left. It will be a prorated amount. If you don’t have a loan on the vehicle currently, then the refund check will come to you. You’ll need to show proof there is no lien on the Kia such as a payoff letter or a copy of the title.
I purchased a Honda extended warranty with a separate check from the financing thinking that I might cancel the extended warranty as I needed more time to read about it and research “did I need it”. I decided since it did not even really start until year 4 and only covered 6 years, that I did not need it.
So why wouldn’t I receive a check since I paid for it out of the financing?