Car buying can sometimes come with unexpected frustrations, especially if you’re going through a dealership. Unless you’re the kind of person who loves reading every word before agreeing to the terms and conditions, car-buying paperwork can get very convoluted very quickly, and we might not always fully understand what we’re getting ourselves into when we sign on the dotted line.
Some disreputable dealers may even bank on you not reading everything in your contract, and can tack on unexpected costs or policies which may hurt you in the long run.
For example, a sleazy dealer might sell you warranties you didn’t ask for. Or, if you did buy one, they may refuse to cancel it. This is an unfortunately common problem that many car-buyers have to deal with. So in this article, we’re going to talk about what to do if a dealer refuses to cancel extended warranty on your new vehicle.
How Do Extended Warranties Work?
The first thing to know is that a car warranty isn’t really a warranty at all. Standard warranties are quality guarantees from companies which promise to replace or repair a product if any unforeseen damage or malfunctions happen, and the cost of the warranty is usually included in the cost of the product.
Extended vehicle warranties, on the other hand, are more like insurance policies. They promise to repair and maintain the vehicle for an agreed-upon period of time, but for an extra cost to the buyer.
There are two kinds of extended warranties you might encounter when purchasing a new or new-to-you vehicle from a dealership.
- OEM or “original equipment manufacturer” warranties come straight from the maker. If you’re buying a new Toyota, for example, Toyota will be the responsible party for issuing and honoring your warranty.
Typically you are charged a deductible, just like insurance, which will then be applied to any repairs you need the dealership to make. This excludes routine maintenance, like oil changes and tire replacements. 2. Third-party or “after-market” extended warranties are similar, except that they are issued by external insurance or warranty companies. They usually offer the same types of coverage for a similar deductible, however they may come with additional limitations or rules which OEMs don’t have.
They may have a limit on where you can have your repairs performed, and may not guarantee that make-specific parts will be used. Additionally, Third-party extended warranties may require that you pay for the repairs up-front, and then file a claim later on.
In both cases, you should be able to cancel your extended warranty within a pre-agreed upon timeframe. But dealers can sometimes make this difficult. In the next few sections, we’ll talk about the options you have if a dealer refuses to cancel extended warranty for you.
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Why Would a Dealer Refuse to Cancel Extended Warranty?
The only reason that you wouldn’t be able to cancel an extended warranty is if you waited to do so until after the cut-off point. Some warranty providers stipulate a strict time period, usually between 30 and 60 days, in which you are allowed to cancel your extended warranty without being charged any fees.
Even in this case, however, you should still be able to cancel your warranty, unless your contract explicitly states otherwise. If you paid for your warranty in full and choose to cancel after the cut-off period, you should still be able to receive a prorated refund.
If for whatever reason you are truly unable to cancel your warranty, you may need to follow your warranty through to the end of your contract.
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What Are Your Options If a Dealer Refuses to Cancel Extended Warranty?
A quick google search of this question will show you just how many people have dealt with slippery financial officers at dealerships either squeezing in an extended warranty the buyer didn’t ask for, or telling bald-faced lies about contract stipulations in an effort to keep them on board.
If a dealer refuses to cancel your extended warranty, there are a few avenues you can follow to make sure they honor your wishes.
- Make sure you understand your contract. Whether you’re about to purchase an extended warranty for the first time or looking to cancel, you should read and re-read the cancellation policy in your warranty contract.
One man who attempted to cancel an extended warranty was told by the dealership that he had to make three payments before he could cancel, however his contract said he could cancel at any time. The dealership is legally bound by the stipulations in the contract, and it will serve you to know yours going in. 2. Try multiple channels. Many car buyers report that they are met with dismissal, resistance, or even aggression when they try to speak to the financial officer who made commission off of the sale of the extended warranty.
If you have tried speaking to them, to no avail, it may be in your best interest to speak to the general manager or other official at the dealership you bought from. 3. Get it in writing. Most dealerships will have you fill out a physical cancellation form, which you can either mail in or bring straight to the dealership for faster processing.
If you are within driving distance of your dealer, we recommend bringing it in yourself so that you can quickly obtain a copy of the letter for your own records that has the dealer’s signature on it. 4. Speak to a lawyer. If your efforts are continuing to fail, it may be necessary to take legal action. It is very, very rare that you will need to involve an attorney in cases like these, however it can be helpful in extreme cases.
This is especially the case if you find yourself to be the victim of warranty fraud, wherein a dealer hides a warranty you did not ask for in your contract. 5. Use an alternate service. Because this is a not-so-rare issue faced by car buyers, there are specialty services which can help you get out of a sticky warranty situation if your dealership refuses to budge. Organizations like DoNotPay.com are there to help consumers when all other options have been exhausted.
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