*This is an estimate based on time pro-ration. Some contracts may use mileage calculations.
Understanding Your Extended Warranty Refund
Canceling an extended warranty (also known as a vehicle service contract) is a right that most consumers have, typically resulting in a pro-rated refund. Whether you sold your car, totaled the vehicle, or simply decided the coverage wasn't worth the cost, you are usually entitled to get money back for the unused portion of the contract.
How is the Refund Calculated?
The calculation generally follows a "Pro-Rata" method. This means you pay only for the time (or mileage) that the warranty was active. The formula typically works as follows:
Determine Total Term: The total length of the contract in months or years.
Calculate Percentage Used: The time elapsed between the purchase date and the cancellation date divided by the total term.
Calculate Unused Value: The original cost of the warranty multiplied by the percentage of time remaining.
Deduct Fees: Most administrators charge a flat cancellation fee (often $25 to $75) which is subtracted from the unused value.
Quick Example
If you bought a $2,000 warranty for 48 months and canceled it after 12 months:
You used 25% of the time (12/48 months).
75% of the value remains ($1,500).
Minus a $50 cancellation fee.
Total Refund: $1,450.
Time vs. Mileage Pro-ration
While this calculator uses a time-based approach (which applies to almost all home, electronic, and many auto warranties), some vehicle service contracts use the "greater of" method. They will look at the percentage of time used versus the percentage of mileage used, and calculate the refund based on whichever percentage is higher (meaning a lower refund for you). Always check your specific contract's "Cancellation" clause for the exact terms.
Steps to Request Your Refund
Locate your contract: Find the paperwork you received when purchasing the warranty. Look for the declaration page.
Check the cancellation policy: Verify the cancellation fee and the address where written notice must be sent.
Get an odometer statement: If it is a car warranty, you will likely need a notarized odometer statement showing the mileage at the time of cancellation.
Contact the dealer or administrator: Often you must initiate the cancellation through the dealership finance manager who sold you the policy, though some allow direct cancellation with the administrator.
function calculateWarrantyRefund() {
// 1. Get DOM elements
var costInput = document.getElementById('warrantyCost');
var termInput = document.getElementById('termMonths');
var purchaseDateInput = document.getElementById('purchaseDate');
var cancelDateInput = document.getElementById('cancelDate');
var feeInput = document.getElementById('cancelFee');
var errorDiv = document.getElementById('errorMessage');
var resultDiv = document.getElementById('resultArea');
var usageSpan = document.getElementById('usageResult');
var unusedSpan = document.getElementById('unusedValue');
var feeSpan = document.getElementById('feeDeduction');
var finalDiv = document.getElementById('finalRefund');
// 2. Parse values
var totalCost = parseFloat(costInput.value);
var termMonths = parseFloat(termInput.value);
var fee = parseFloat(feeInput.value);
var pDateStr = purchaseDateInput.value;
var cDateStr = cancelDateInput.value;
// 3. Reset display
errorDiv.style.display = 'none';
resultDiv.style.display = 'none';
// 4. Validation Logic
if (isNaN(totalCost) || totalCost <= 0) {
errorDiv.innerText = "Please enter a valid warranty cost.";
errorDiv.style.display = 'block';
return;
}
if (isNaN(termMonths) || termMonths <= 0) {
errorDiv.innerText = "Please enter a valid term length in months.";
errorDiv.style.display = 'block';
return;
}
if (!pDateStr || !cDateStr) {
errorDiv.innerText = "Please select both purchase and cancellation dates.";
errorDiv.style.display = 'block';
return;
}
var pDate = new Date(pDateStr);
var cDate = new Date(cDateStr);
if (cDate totalDaysInTerm) {
daysElapsed = totalDaysInTerm;
}
// Calculate Ratios
var percentageUsed = daysElapsed / totalDaysInTerm;
var percentageRemaining = 1 – percentageUsed;
// Ensure not negative
if (percentageRemaining < 0) percentageRemaining = 0;
// Financials
var rawRefund = totalCost * percentageRemaining;
var finalRefund = rawRefund – fee;
// Floor at 0
if (finalRefund < 0) finalRefund = 0;
// 6. Update UI
usageSpan.innerText = (percentageUsed * 100).toFixed(1) + "%";
unusedSpan.innerText = "$" + rawRefund.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
feeSpan.innerText = "-$" + fee.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
finalDiv.innerText = "$" + finalRefund.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultDiv.style.display = 'block';
}