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Vehicle Protection Plans

Vehicle Service Contract Cancellation Terms

Before buying a vehicle service contract, make sure you fully understand what will happen if you want to cancel your vehicle service contract or transfer it to a new owner.

Many vehicle service contracts allow you to pay fees over time. But what if something happens that makes you want to cancel your vehicle service contract?

The best time to ask that question is before you purchase a vehicle service contract.

Typically, you will be refunded a pro-rated amount, based on when you cancelled, less a small cancelation fee. Some vendors will allow you to apply the refund to new coverage, if, for example, you have simply switched cars. The refund and cancellation policies vary from vendor to vendor, however, and, accordingly, you need to do your own due diligence on this issue.

It's also important to ask what happens if you sell your covered car to a new owner. In most cases, you can transfer the contract. Given the option of buying a car with a service contract versus purchasing a car that does not have a service contract, many used car buyers will opt for the car that has an existing service contract. In this way, having a service contract on a vehicle can help you when you decide to sell your car.

Note to Consumers

Consumers often come to this page after searching for "how to cancel an extended car warranty," "extended warranty cancellation" and other similar phrases. The phrase "extended car warranty" is technically incorrect, and firms that refer to vehicle service contracts as "extended car warranties" are not in compliance with the VPA's industry standards of conduct.

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