June 16, 2006

Hello Tony

How do they determine the amount a person gets back from Extended Auto Warranty and GAP Insurance refunds?

Troy

Answer:

Hi Troy,

Refunds on extended auto warranties and Gap Insurance are calculated on a pro-rated basis. There's a formula that they use to figure the refund. Obviously the longer you have the coverage the less you get back.

Additionally, with the extended auto warranty they will figure the refund either by using the miles elapsed or the time elapsed - whichever is to their advantage.

If these products were purchased through a car dealer then the dealer is also required to refund a portion of the profit they earned on the transaction.

So, the total refund you receive will be a combination of money from both the car dealer and the warranty or insurance company.

You'll get it all in one check usually from the car dealer. The warranty company or insurance company will usually send their portion of the refund to the car dealer, then the dealer will issue a check for the total refund which will include their portion as well.

I hope this helps . . .

All my very best . . .

Tony Iorio