Another extended warranty question

Thank you Mr. Blanc.

Scott Blanc wrote:
Any "extended warranty" sold through a dealership is actually (legally) a vehicle service contract. The dealer is obligated to refund the pro-rated retail price, including the dealer's cost and mark-up. That's why you generally have to process the cancellation through the dealership.

Your ESP terms and conditions should have specific directions about how to cancel or transfer the coverage.

Excellent, Thanks.

Any "extended warranty" sold through a dealership is actually (legally) a vehicle service contract. The dealer is obligated to refund the pro-rated retail price, including the dealer's cost and mark-up. That's why you generally have to process the cancellation through the dealership.

Your ESP terms and conditions should have specific directions about how to cancel or transfer the coverage.

Since the dealer marks up the price of an extended warranty and makes a profit, I've always wondered what happens if you cancel it and get a refund.
Does the service plan just return their portion or does the dealer have to cough up part of his profit as well?

Thanks for the quick response Scott. This is a "Bumper to bumper" warranty, not Service contract. Would the same rules apply? It is on the loan, and if the unused portion comes off the balance, that would be fine.

nohurry,

Your Ford ESP service contract can be cancelled, and you should receive a pro-rated refund, based on the time or mileage used, which ever is greater. The plan can be transferred to a new owner if you sell the vehicle yourself.

Keep in mind that if you financed the cost of the service contract into your loan, the refund will go back to the lender to pay down your loan rather than directly back to you.

You can work with the dealer who issued the service contract to process the refund or transfer.