How to Cancel an Extended Car Warranty

Couple in a convertible that has an extended warranty
Photo: Colin Anderson / Getty Images

When you are buying a new car, you need to make a lot of decisions in pretty rapid succession. Deciding whether or not you want to purchase an extended warranty is one of those decisions.

What Is an Extended Car Warranty?

Let’s get something straight right from the beginning: Almost all new cars come with a limited warranty that covers you for the first three years or 36,000 miles of owning your vehicle, whichever comes first.

If you are willing to pay for the privilege of not having to worry about the cost of unexpected repairs for a bit longer, an extended warranty might be for you. However, calling it a “warranty” isn’t exactly right. An extended warranty is just an extra insurance policy that will protect you from having to pay for expensive repairs for a certain amount of time or a specific number of miles. Often, these extended warranties will add a couple of years onto the standard coverage.


Most extended warranties are offered by the makers of the car, truck, SUV, or van in question.

Policies such as this are known as original equipment manufacturer (OEM) extended warranties. If your extended warranty is covered by a household name that happens to have made your vehicles, such as Ford, Honda, or Audi, then you probably have an OEM extended warranty.

There are two additional types of OEM extended warranty:

  • A powertrain warranty will cover any workmanship issue that causes your engine or transmission not to function properly.
  • A limited warranty (or a bumper-to-bumper warranty) will cover pretty much everything else, including your car’s technology features or infotainment system, but not routine maintenance or things that wear out easily, such as tires and windshield wipers.

Another type of extended warranty is offered by a third-party, like the car dealership from which you purchased your vehicle. These warranties are known as "aftermarket warranties."

Why Would I Want to Cancel My Extended Car Warranty?

The biggest reason people buy an extended warranty is that car dealerships love to encourage people to buy them. It’s hard to avoid this pressure, and it’s easy to think about the risks of not purchasing the policy more than the rewards.

Despite this, most of the time, having an extended warranty is not a wise financial decision. In 2018, Consumer Reports found that the median cost of an extended warranty tops $1,500; the majority of purchasers don’t end up using it and those who do end up having spent more on the policy than they would have if they’d just paid for the repairs out of pocket.

If you have impulsively purchased an extended car warranty, you might be hoping you can undo this mistake and put the money in a better place.

How Much Money Can I Get Back if I Cancel My Extended Warranty?

If you have made a true impulse purchase, you generally have 30 days to cancel your extended warranty penalty-free.

If it’s been longer than that, you will generally be able to cancel and get back a prorated amount based on the amount of time that has passed and the mileage you have put on your vehicle since then. Check your specific contract for more information.

How to Cancel Your Extended Car Warranty

Unfortunately, dealers who sell you an extended warranty get a commission from doing so, and they’re not going to be in a hurry to help you cancel. If you have a weak constitution, it may help to bring along a pushy and assertive friend when you return to the dealership or call to cancel.

To cancel your extended car warranty, you will need to fill out a form specifying your mileage and the cancellation date, and then you will need to get a signed copy of the form from the dealership.


You will probably need to nudge them to process the request, so don’t be afraid to call every couple of weeks.

How Can I Avoid Making This Mistake in the Future?

In almost all cases, you can wait until your original OEM warranty is nearing expiration before deciding whether or not you want to purchase the extended warranty. Of course, they won’t likely mention that at the car dealership, but if you know what brand of car you want, you should research it ahead of time.

Frequently Asked Questions (FAQs)

How do I stop getting extended car warranty calls?

If you're getting a lot of calls offering extended warranties for your vehicle, they very well may be scams. You can file a complaint with the FCC to report these calls so the agency can take appropriate action.

What happens to an extended warranty when you trade in the car?

Some extended warranties can be transferred to the new owner when you trade in or sell your car. Check the terms of your warranty agreement to determine whether your warranty is transferrable or will be voided in the event of an ownership transfer.

When should I buy an extended car warranty?

An extended warranty can be a helpful way to gain peace of mind about your car, but it comes at a high price. Before you purchase a car, be sure to thoroughly research your options and understand which types of warranty coverage make sense for you. If you do decide you want an extended warranty, it's best to purchase it before the regular warranty expires. If you wait too long, the price of the extended warranty will go up.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Auto Consumer Info. "Factory Warranty Coverage Information."

  2. Progressive. "What To Know About a Powertrain Warranty."

  3. Edmunds. "Understanding Extended Warranties."

  4. Consumer Reports. "Should You Get an Extended Warranty for Your Car?"

  5. Vehicle Protection Association. "What If I Want To Cancel My Vehicle Service Contract?"

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