After getting my car two week ago for a good deal and a good APR (thanks to this forum) I thought I could spread the wisdom to my gf since this forum was so beneficial to me. My question is, My gf took out an auto loan for a Toyota yaris back in Jan of 2010 and owes roughly 6,800. I told her to give me her contract to just review it ( I was bored), when I saw it I saw that the salesmen had probably told my gf that she needed gap and a "platinum" warranty , worth close to 2 grand. I know she can cancel the Gap insurance but is it possible to cancel that warranty and get a refund? The warranty contract says it expires at 60,000 miles or in 2015, she hasn't used the warranty if that helps.
The warranty is useless until the factory bumper to bumper expires at 3yrs/36k. She is almost to the point that she may need it. However, it is highly unlikely the car will have problems as long as she has properly maintained it.
Thanks for your help. Yeah the warranty was about 1200 or something like that. She does maintain the car pretty well, no major issues in the almost 4 years she has had the car. The reason she wants to cancel the gap and insurance is because after looking at her loan, with this stuff plus interest shes going to pay close to 21 grand for a basic toyota yaris, so with the money she gets back she can apply it to the principle to save money and get out of the loan quicker, she has roughly about 6300 to go on a 72 month loan.
The warranty and the GAP are primarily insurance programs in the event that something major goes wrong mechanically or the vehicle is totaled while the loan is underwater. Canceling both now is likely to result in a savings of less than 50% of the original cost. You need to do the math and risk analysis in that is she (you) ready to write the check in the event of these occurrences. As pointed out earlier it is very likely that the vehicle is out of manufacturer warranty and you still have a bit to go on a 72 month loan.
I am one of those (un)? fortunate souls who has had to have major auto repairs be covered under an extended warranty. I was very glad I had it in that case. But that doesn't mean it works for everyone. I personally am always in favor of buying an extended warranty / service for automobiles. Not so much for other products like electronics. Just my opinion.
Thank you for your insight, what you guys have said about extended warranty does make sense and probably she should kepp and knowing her she will want to keep it. But as for the gap insurance, she isnt under water she has about a grand or 2 in positive equity on the car and even though she'll get rougly 350 or so back from that, thats 350 or so she can apply to her priciple. Once again, thank you guys for your help and input's!
I just got suckered into an expensive extended warranty on a car I purchased and was debating about whether to keep or cancel for a full refund with the first 30 days. Then I read this in the contract details, "The aggregate total of all repairs and benefits... paid shall not exceed...$3000.00" (summarized).
And I'm out!! With the price I paid rolled into my financing I'd end up paying more than it would even pay out.