What to do When Dealer Refuses to Cancel Extended Warranty

Navigating Extended Car Warranty Cancellations: Your Guide

Buying a car can sometimes be fraught with surprises. That is so, especially if you go via a dealership. Unless you’re the type of person that enjoys reading through every word of the terms and conditions before agreeing to it, car buying paperwork can quickly become complicated. Thus in most instances, we will find ourselves signing on the dotted line without fully understanding what we are getting ourselves into. Unfortunately, some shady sellers will take advantage of you not reading the fine print in your contract and tack on extra fees or policies that may end up costing you more money in the long run.

For instance, disreputable car dealers may sell you warranties you did not request. Or, if you had previously purchased one, they might refuse to cancel it. Unfortunately, it is a common problem that you are likely to encounter as a car buyer. Fortunately, this article will take you through what you can do if a dealer refuses to cancel the extended warranty on your new car.

How Extended Warranties Work

cancel extended car warranty

 The essential thing you should understand is that a car warranty isn’t a warranty. Standard warranties are assurances from corporations that they will repair or replace a product if it suffers any unanticipated damage or malfunction. Additionally, the cost of the warranty is always part of the product’s price.

On the other hand, an extended car warranty is more similar to an insurance policy. They offer to maintain and repair your car for the agreed-upon period at an additional fee. Extended warranties are available in two types, and you are likely to encounter any or both of them when purchasing a new car. They include:

Original equipment manufacturer

The warranty comes straight from the manufacturer. For instance, if you are buying a new Isuzu car, the Isuzu Company will be the one to issue and honor your warranty. Typically, charges apply in this type of warranty, similar to what you would pay for insurance. The fees will then help to do any repairs you require from the dealership.  However, this excludes your daily maintenance, such as the replacement of tires and oil changes. 

Third-party warranty

It is also known as the after-market extended warranty. It is similar to the OEM warranty except that it is issued by external insurance or a warranty company. They usually provide identical coverage for similar prices, but they may have additional regulations or limitations that the OEMs do not. For example, they can limit where you can get your repairs done. Additionally, third-party extended warranties may ask you to pay for repairs in advance and then file a claim afterward.

You should be able to terminate your extended warranty within a predetermined window in both cases. However, some dealers may make it impossible for you to do so. We’ll go over your choices in the following sections if a dealer refuses to cancel your extended warranty. But before that, let’s take a look at some of the reasons that may necessitate you to cancel your extended warranty.

Reasons to Cancel Your Extended Warranty

Although an extended warranty acts to protect you against future unanticipated repairs that may be costly, below are some instances when you might decide to cancel it:


Usually sold as monthly purchases. You may calculate the total cost of the warranty over the duration of the contract and find out that it is much more costly than what the dealer made you believe. 


Some dealers can sneak an extended warranty into your car finance deal without your knowledge or consent. The loan’s term will then be lengthened to cover the additional cost.


The extended warranty will not kick in for at least three years after you purchase a new car. For that reason, you might choose to keep your money in your pocket.


Extended warranties aren’t all-inclusive. You may determine after reading the contract that the coverage is not worth the expense.

Why won’t the dealer cancel the extended warranty?

The only instance you will not be allowed to cancel the extended warranty is if you waited to do so after the deadline. Many warranty providers have a stringent time limit, usually, 30 to 60 days, during which you can cancel your extended warranty without incurring any expenses.

However, unless your contract indicates otherwise, you should still be allowed to terminate your warranty in these circumstances. Additionally, you should be able to get a prorated refund if you paid for the warrant in full and then decided to cancel it after the deadline. 

What happens if a dealer won’t terminate an extended warranty?

If a dealer refuses to terminate your extended warranty, you have a few options to ensure that your preferences are respected.

cancel extended car warranty

Make sure you understand your contract

You should read and reread the cancellation policy in your warranty contract whether you are ready to purchase an extended warranty for the first time or looking to cancel it. Some dealerships may ask you to pay some fee so that they can cancel your extended warranty, while your contract might be stating that you can cancel the warrant at any time.

Try multiple channels

In some instances, when you try to meet with the finance officers who made a commission on the extended warranty transaction, they might treat you with dismissive opposition. In this scenario, speaking with the general manager or other officials from the dealership may be in your best interests.

Get it in writing

Many dealerships will require you to fill a physical cancellation form. After filling it, you can either email or take it directly to them for faster processing. However, it is advisable that you deliver the letter yourself to get a copy of the letter that has the dealer’s signature for your record.

Speak to a lawyer

If your efforts are not bearing any fruits, then you may opt to take legal action.  In most circumstances, you will not require the services of an attorney; nevertheless, in extreme cases, it may be necessary. That is especially true if you are a victim of warranty fraud, in which a dealer conceals a warranty that you did not request in your contract.

Use an alternative service

Since this is a common issue faced by many car buyers, special services can help you terminate your warrant if the dealer refuses to cancel it. They include services such as those provided by the DoNotPay.com organization to help you when all your options are exhausted.

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