What happens if I need to get out of my extended warranty contract?

Most extended warranty plans last between 2 and 7 years. As you plan ahead, it is very difficult to imagine what is going to happen to you and your vehicle in the next 5 years, or even a full 7 years. There are many situations that could arise whereby you would no longer need your added protection, such as, you sell your car, you decide to trade it in, it is stolen, or it is totaled in an accident. It is very important to not only find out whether or not you are locked into a contract, but also how your refund is going to be determined by your provider. Ask a car warranty company if their contracts can be cancelled, what the process of cancellation is, and how the refund is awarded. Ask them if the refund is returned in the form of a check, or if it can only be used as credit towards a new warranty. Finally, make sure you understand how the refund is determined. The most acceptable method, and the most beneficial to you the consumer, is a prorated refund. This means that they determine exactly how much of the warranty you used, based on the greater years or mileage, and they refund you the remaining balance. Most companies will deduct a small cancellation fee from this amount. In review, the best warranty is one that you are not locked into, one that allows you to cancel upon request, and one that prorates a refund to you and sends you a check should you desire.