What is the deal with a 100% refund program?

Many extended warranties are now being sold with the option of entering into a 100% refund program. These programs are found not only with third party providers, but also with dealerships. The basic concept behind this new program is that if you take out an extended auto warranty, and if you never make a claim on it, and the contract then expires, at that point you will receive a full refund. The problem with these programs is that the contract must naturally expire while you are still the owner of the vehicle. Should anything happen whereby you need to cancel the contract, you will lose the opportunity to receive a full refund. Another major problem is that the program entices the contract holder to pay for small claims out of his or her own pocket. They obviously don't want to void the refund program, so they pay off a small claim of a few hundred dollars, thereby increasing the original cost of the warranty.

However, some consumers feel that the role of their extended warranty is to protect themselves from just the major repair problems associated with their vehicle. In this instance, they can use the warranty should they ever encounter a major problem, or receive the full refund if they never use it. Make sure you fully understand the many possible scenarios of a 100% refund program, and what they all mean to you.