How to Cancel Your Extended Car Warranty: A Step-by-Step Guide

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Last updated Nov 14, 2023

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.

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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. 

cancel my extended warranty

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.

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30 Comments

  1. Stefani

    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?

    Reply
    • Kimberly Kline

      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

      Reply
      • Pam

        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?

        Reply
        • Kimberly Kline

          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.

          Reply
  2. JStar

    Hello! The form link doesn’t allow for copies or downloads. Folks can’t use your form if they can’t download it or at least copy. Please adjust your sharing permissions in the google doc.

    Reply
    • Zach Shefska

      Please try now — thank you for the heads up!

      Reply
      • Susan Byrn

        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.

        Reply
        • Kara

          Thanks for all tje great info my situation is a bit different. My father bought a car with an extended warrenty. He gave it to me 2 months later and passed away a month after that. He used less than 1000 miles on a 45000 mile contract how do I go about getting a refund for this vehicles contract? I would think even if thr vehicle wasn’t mine now / cuz that contract is voided that I would be able to request the refund on my fathers behalf.
          The car was paid in full.

          Reply
  3. Susan Byrn

    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.

    Reply
    • Kimberly

      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.

      Reply
    • Kimberly Kline

      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.

      Reply
  4. sam parfitt

    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/

    Reply
    • Kimberly Kline

      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.

      Reply
  5. Alex R

    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?

    Reply
    • Kimberly Kline

      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.

      Reply
  6. Danielle Ogier

    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?

    Reply
  7. Theresa Dean

    Wouldn’t it be better to just give the letter and copy of the purchase agreement directly to the accounting department , since they are the ones actually processing the refund? Or do I actually have to talk to the finance manger again to give him the paperwork?

    Reply
  8. Luis

    If the dealership refuses to cancel an extended warranty (that has a Cancelation Term). What can I do? The dealership ir really running around to cancel of me. I was wondering if I can file a complaint with Customer Affair.

    Reply
    • Zach Shefska

      You should contact the dealership accounting department. They will help you. I am sorry about the experience you are having.

      Reply
      • Name george

        Comment saludos cordiales a todos, yo compre una camioneta exactamente hace 1 año por razones de negocios necesito cambiar de modelo y en chevrolet me la reciben y ellos pagan la deuda hasta donde tengo entendido el concesionario donde sacaré el nuevo vehículo financia con otra agencia de préstamos, yo mañana voy al concesionario a hacer la cancelación de la garantía extendida, mi duda es, si chevrolet pagará la totalidad de la deuda a donde irá el reembolso de la garantía extendido ya que no habrá tiempo de que deduzcan nada, de antemano gracias por su ayuda

        Reply
  9. Vinay

    Hello,
    A few days ago, I leased a Subaru forester 36 months + 10k miles/yr and signed up for the Extended Platinum plus term care select plan for 48 months + 48K miles at $1,124. Do I cancel the Extended warranty the same way as with financing a car, since this is a lease ? How does the MSRP get affected? Does the monthly payment change.
    Thank you.

    Reply
  10. Teleshia Lyman

    I recently canceled an extended car warranty that I purchased. I asked the finance manager about the taxes and interest since the cost of the plan was apart of the total purchase price. She said neither would be refunded. Is there anyway to get the taxes and interest back from the protection plan that was included in the total at the time of financing. It doesn’t seem fair to only get the cost of the extended warranty plan back when adding it to the final total increased taxes and interest. When you return items to a store you get taxes back so why might not it apply to this scenario.

    Reply
    • Jasmine

      Hello I got a letter from Nissan indicating cancellation refund with a check I am very confused are they gonna take my car back or do I

      Reply
  11. Amanda Marie

    I cancelled my car warranty with the dealers “controller.” Emailed all necessary paperwork. At that time, I told him I was canceling because I was going to sell the car. He told me my refund would go to the lien holder. That was fine. My contract said they have 30 days to refund the money. 2 weeks later, I sold the car. I emailed the controller if they received my paperwork. He said it was “processing.” I emailed him back that I sold the car and asked if he needed the proof of payoff. He said no, the refund would go to the loan holder, if the loan is paid off the lender will send me a check.- almost 4 weeks later, the lender said they have not received anything from the dealer. They also told me that since my account was closed, they would return the payment to the sender. They said the account is not open, they cannot apply a payment to a closed account. They said if they would have received the refund before the payoff, that would be true, but not after the account is closed. He said they will refund the sender of the check. I am getting very irritated and feeling ran around by the dealer. They said it was processing, but they never refunded Nissan. I called the warranty company, he said since the account is closed and not delinquent, he is not actually sure who will get the check. I understand I canceled before my loan was paid off, but they sat on the refund and as far as I know still have not sent it. If they have not sent it, I am not understanding why they cannot just issue me the refund. I have no doubt that if the check is returned to the dealer, I would never know because they wouldn’t voluntarily tell me. I was told the warranty was cancelled by the dealer in august, but they don’t issue a refund, they dealer does. Any advice for this runaround?

    Reply
    • Zach Shefska

      Amanda, I am sorry you are enduring this experience! I say it is time to go into the dealership and speak with them in-person about what is going on. Squeaky wheel gets the grease type of situation (unfortunately).

      Reply
    • Jin Lee

      How do we find out the email address of the accounting department? It’s ourisman auto in Maryland. This is such a frustrating experience and borderline illegal. Car buyers should be happy after the purchase, not filled with regret and anger. This is really a messed up industry.

      Reply
  12. Stephen Mikol

    Is there a defined timeline for the dealer to issue any refund for my service contract if I decide to cancel it? I have a payoff letter from the finance company showing a zero balance. They are telling me it could take anywhere from 6-8 weeks to process and issue a refund.

    Reply
  13. Meaghan

    I purchased a vehicle from a used car dealership just under a year ago and want to cancel the extended warranty I purchased. I financed the car. That dealership has since gone out of business. How would a refund work? Would I cancel with the warranty company and they’d issue a refund to the company it’s financed with?

    Reply
  14. CASSANDRA D HUTCHINSON

    Hi – Is there a particular time to cancel GAP and service warranties in the event of a total loss. I settlement agreement has been finalized and check is in progress of being sent to lien holder. This will leave a small amount that will hopefully be covered by GAP policy. Currently I have 3 active warranty products: GAP, Lifetime and VSC. I am hoping to get a refund but hesitant to cancel either policy to prevent any issues collecting refund. GAP expires Jan 2028 and VSC expires Oct 2027. When do you recommend contacting the accounting manager to request cancellation of the warranties/refund?

    Reply
  15. Krystle

    I am in the process of trading in my car for a new one. I am upside down on my loan and would like to use the extra money from the warranties to help out. I called and was quoted that I have 6K left in warranties that I can get prorated. My question is do I cancel the warranty before I sign on the new car or after I buy the new car?
    The new car dealer is telling me that I will receive a check in the mail from the old loan once the warranty is processed, but I don’t believe them. I feel like once I sign on the new car they will be able to pocket the warranty money since they are technically the ones paying off  the loan. 

    Reply

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