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Old 04-25-2016, 07:15 AM
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Cancelling an extended warranty

Have any of you guys ever gone through the process of cancelling an extended warranty?


Long story short, I got a really good deal for a vehicle for my wife this week but due to a lot of negative equity on her previous car, the bank wasn't going to finance. Instead the dealer took off $3k on the front end and threw in a $3k warranty (a lot) on the back end to make the bank happy. We locked in a 2.9% interest rate (which my credit union will refi for 2 points lower) so I wasn't too concerned with the deal.

BUT, I don't want the warranty and made it clear I didn't want the warranty. Think there will be any issues cancelling it in a few weeks and getting my money back? Would love to drop that into the loan and be further ahead.

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Old 04-25-2016, 07:22 AM   #2
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Have any of you guys ever gone through the process of cancelling an extended warranty? Long story short, I got a really good deal for a vehicle for my wife this week but due to a lot of negative equity on her previous car, the bank wasn't going to finance. Instead the dealer took off $3k on the front end and threw in a $3k warranty (a lot) on the back end to make the bank happy. We locked in a 2.9% interest rate (which my credit union will refi for 2 points lower) so I wasn't too concerned with the deal. BUT, I don't want the warranty and made it clear I didn't want the warranty. Think there will be any issues cancelling it in a few weeks and getting my money back? Would love to drop that into the loan and be further ahead.
Sounds like you got reamed. I hate unscrupulous dealers. Help me understand, did you finance the warranty?

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Old 04-25-2016, 07:26 AM
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You got reamed. I hate unscrupulous dealers.
Believe it or not the deal actually worked out really well. I work in finance for a living so I'm very aware of the numbers game.

The problem for us is my wife's car was VERY upside down. It was worth half of what we owed on it and I would have been dumping cash into it the next 2 years to break even. The total out the door number on the new car is exactly what I wanted to pay and absorbed the bulk of our negative equity. The only difference is the money is on the back end vs the front end.

The plan is to hopefully cancel and put it against the principal and come out further ahead. Yes the warranty is financed.
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Old 04-25-2016, 08:16 AM   #4
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I'd say you need to read the fine print. It should stipulate what the conditions are.
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Old 04-25-2016, 08:19 AM   #5
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Really depends on the warranty conditions. I'm a claim adjuster for an independent extended warranty and in our case the customer has 10 days to cancel after date of purchase. Look up the warranty conditions of your plan.

Edit wizard above. Read the fine print
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Old 04-25-2016, 08:34 AM   #6
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You work in finance but your wifes cars was back o' book?
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Old 04-25-2016, 08:42 AM   #7
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I've canceled a few extended warranties. Just called the stealership, or even the warranty company and said I didn't want it anymore. They should pay you back based on time (ie $3000 warranty with half its time left would get $1500 back). Hopefully it all works out for you.
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Old 04-25-2016, 08:46 AM   #8
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I've canceled several extended warranties without issue. I have a MOPAR extended warranty on my 2015 Challenger Scat Pack Shaker that I canceled. All you need to do is call the selling dealer and request a cancellation. If you financed the warranty with your vehicle, MOPAR will send the check to your lien holder.
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Old 04-25-2016, 08:58 AM   #9
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I cancelled mine, no issues. Do it quick though, the more miles you put on the less you get back.
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Old 04-25-2016, 09:00 AM   #10
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Have any of you guys ever gone through the process of cancelling an extended warranty? Long story short, I got a really good deal for a vehicle for my wife this week but due to a lot of negative equity on her previous car, the bank wasn't going to finance. Instead the dealer took off $3k on the front end and threw in a $3k warranty (a lot) on the back end to make the bank happy. We locked in a 2.9% interest rate (which my credit union will refi for 2 points lower) so I wasn't too concerned with the deal. BUT, I don't want the warranty and made it clear I didn't want the warranty. Think there will be any issues cancelling it in a few weeks and getting my money back? Would love to drop that into the loan and be further ahead.
I also have an extended warranty and it says in the contract you can cancel at any time and they will prorate the portion not used. It does say however there is a $75 fee to cancel it.
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Old 04-25-2016, 09:19 AM   #11
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I don't get how throwing in a $3k warranty helps make the financing bank happy. Sounds more like typical salesman trickery.

My guess is that you will eventually learn that $3k is what the salesman told you the "value" of the warranty was - like a retail price, but the details will probably show you paid much less for it.
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Old 04-25-2016, 09:34 AM   #12
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I don't get how throwing in a $3k warranty helps make the financing bank happy. Sounds more like typical salesman trickery.

My guess is that you will eventually learn that $3k is what the salesman told you the "value" of the warranty was - like a retail price, but the details will probably show you paid much less for it.
Just a shell game moving numbers around.it is why people get so upside down in vehicles.
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Old 04-25-2016, 09:35 AM   #13
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[QUOTE=Gogogordy;25375386]You work in finance but your wifes cars was back o' book?[/QUOTE

Was your last car a Porsche or something extremelly expensive? Rolling over negative equity (Debt) into another car that will also depreciate usually just makes the problem worse or spreads out the debt for a few more years. I hope your new car was very inexpensive so you can get out from under. I'm only asking as a friend did this for several years until he filed Bankruptcy, he showed up with a new car a few times claiming he was saving money but we all knew it wasn't possible.
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Old 04-25-2016, 09:38 AM   #14
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Why wouldn't you just have went with the 0.9% from the cu to start with?
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Old 04-25-2016, 10:06 AM   #15
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I'm just a simple man. So I won't try to analyze why you paid about $600 too much for an extended warranty (assuming it's MOPAR lifetime $100 deductible) that you absolutely did not want, or why you financed it, along with the negative equity in the trade, or how that was supposed to make it more acceptable to the bank, or why you didn't finance with the CU at 0.9% from the get-go. After all you work in finance and you feel like you got a good deal. All this info you volunteered is really irrelevant to your question.

You need to read the warranty contract. It will explain the cancellation procedure.
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Old 04-25-2016, 02:53 PM   #16
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Why wouldn't you just have went with the 0.9% from the cu to start with?
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Old 04-25-2016, 05:39 PM   #17
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Sounds like you got reamed. I hate unscrupulous dealers. Help me understand, did you finance the warranty?
The bank would not advance all the money that he needed due to loan to value restrictions. They are not being unscrupulous, they are extending an option to take delivery of the Jeep. Some dealers will offer this option and some will not.
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Old 04-25-2016, 05:43 PM   #18
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Originally Posted by 14Trailcrawler View Post
I don't get how throwing in a $3k warranty helps make the financing bank happy. Sounds more like typical salesman trickery.

My guess is that you will eventually learn that $3k is what the salesman told you the "value" of the warranty was - like a retail price, but the details will probably show you paid much less for it.
Read previous post.
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Old 04-25-2016, 05:45 PM   #19
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Why wouldn't you just have went with the 0.9% from the cu to start with?
Bank may or may not be able to advance all of the money needed to cover the amount of the loan.
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Old 04-25-2016, 05:45 PM   #20
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If you're in this kind of financial trouble I would not recommend buying a Jeep Wrangler until things are more in line. There are much cheaper options that can provide transportation.
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Old 04-25-2016, 05:47 PM   #21
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Believe it or not the deal actually worked out really well. I work in finance for a living so I'm very aware of the numbers game.

The problem for us is my wife's car was VERY upside down. It was worth half of what we owed on it and I would have been dumping cash into it the next 2 years to break even. The total out the door number on the new car is exactly what I wanted to pay and absorbed the bulk of our negative equity. The only difference is the money is on the back end vs the front end.

The plan is to hopefully cancel and put it against the principal and come out further ahead. Yes the warranty is financed.
Exactly, you wanted out of the old and the terms were agreeable. As long as you are happy in the end, that is all that matters. Get something you like instead of paying for one you don't like for the next two years.
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Old 04-25-2016, 05:56 PM   #22
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Believe it or not the deal actually worked out really well. I work in finance for a living so I'm very aware of the numbers game.

The problem for us is my wife's car was VERY upside down. It was worth half of what we owed on it and I would have been dumping cash into it the next 2 years to break even. The total out the door number on the new car is exactly what I wanted to pay and absorbed the bulk of our negative equity. The only difference is the money is on the back end vs the front end.

The plan is to hopefully cancel and put it against the principal and come out further ahead. Yes the warranty is financed.
Exactly, you wanted out of the old and the terms were agreeable. As long as you are happy in the end, that is all that matters. Get something you like instead of paying for one you don't like for the next two years.
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Old 04-25-2016, 06:04 PM   #23
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as long as you are happy in the end, that is all that matters
+1
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Old 04-25-2016, 06:08 PM   #24
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The bank would not advance all the money that he needed due to loan to value restrictions. They are not being unscrupulous, they are extending an option to take delivery of the Jeep. Some dealers will offer this option and some will not.
Explain to me knocking $3k off the vehicle and adding back in the $3k warranty. How was that to the buyer's benefit?
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Old 04-25-2016, 06:54 PM   #25
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Explain to me knocking $3k off the vehicle and adding back in the $3k warranty. How was that to the buyer's benefit?
I get it that it's a shell game so the buyer basically gets the warranty thrown in. Still don't understand how this makes the lender any happier.

Also - FWIW I've know several guys who are or were "in finance" that always told me I just don't get it when they try to explain these shady moves. - I've also seen several loose everything.

As far as I am concerned, the fewer variables the better. I've bought countless vehicles in my life time. I've never regretted a single purchase once I got to the point of keeping it simple.

1) vehicle purchase price
2) trade in/down payment amount
3) available interest rate.
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Old 04-25-2016, 07:03 PM   #26
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What I'm a little confused about is this.

If they knocked $3k off the price of the Jeep and added it back in somehow for the "warranty" to make the finance company happy, then it sounds like you're paying what you wanted to pay and basically got some sort of warranty that may or may not be worth the paper it's written on for free.

Now you're trying to cancel that warranty and get back $3k that you shouldn't really be getting back because it was only tied to the warranty for the purpose of getting the financing worked out.

If you pull this off, it seems to me that you've scammed them unless I've misunderstood something.
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Old 04-25-2016, 07:03 PM   #27
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I get it that it's a shell game so the buyer basically gets the warranty thrown in. Still don't understand how this makes the lender any happier.
Hoping terpsmandan can shed light on this as he seemed to understand all the rest of this deal.
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Old 04-25-2016, 07:04 PM   #28
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Bank may or may not be able to advance all of the money needed to cover the amount of the loan.
Why didn't you just keep the old vehicle lol
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Old 04-25-2016, 07:45 PM   #29
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I get it that it's a shell game so the buyer basically gets the warranty thrown in. Still don't understand how this makes the lender any happier. Also - FWIW I've know several guys who are or were "in finance" that always told me I just don't get it when they try to explain these shady moves. - I've also seen several loose everything. As far as I am concerned, the fewer variables the better. I've bought countless vehicles in my life time. I've never regretted a single purchase once I got to the point of keeping it simple. 1) vehicle purchase price 2) trade in/down payment amount 3) available interest rate.
I hear you. I don't even finance or give my trade to the dealer any more. That seems to be the only way to really know what you pay for your vehicle. Hey, take a look at terpsmandan's profile. He's a finance manager and the only person to understand this deal other than the OP. Interesting.
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Old 04-25-2016, 07:55 PM   #30
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What I'm a little confused about is this.

If they knocked $3k off the price of the Jeep and added it back in somehow for the "warranty" to make the finance company happy, then it sounds like you're paying what you wanted to pay and basically got some sort of warranty that may or may not be worth the paper it's written on for free.

Now you're trying to cancel that warranty and get back $3k that you shouldn't really be getting back because it was only tied to the warranty for the purpose of getting the financing worked out.

If you pull this off, it seems to me that you've scammed them unless I've misunderstood something.
I was thinking the same thing. A wise radio host always said "You cannot borrow you way to prosperity." Something wrong with this set up.

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