How to Get a GAP and Extended Warranty Refund After Payoff

You paid off the loan, sold the car, or traded it in, and the GAP coverage and extended warranty you bought at the dealer were rolled into the loan up front. The wrong assumption is that the unused part comes back on its own. The Consumer Financial Protection Bureau has found servicers that never sent these refunds after early payoff, so ask for the money yourself.

Find the add-on contracts

Pull out the retail installment contract and the buyer's order from the purchase. Each add-on is listed with its price, and each has its own contract naming the company that runs it, called the administrator or provider. Write down the contract numbers, the administrator's name, and the price you paid. If you cannot find the paperwork, the CFPB says to ask your lender, the provider, or the dealer that sold you the car.

Gather proof the loan or the car is gone

Get the paid-in-full letter or title release from the lender, or the bill of sale or trade-in paperwork if you sold the car. Note the date and the odometer reading on that date. Most refunds are figured from that date and mileage, so a clear record speeds things up.

Send a written cancellation request

Find the cancellation section of each add-on contract. It names where to send the request and whether a form is required. Send one request per product to the administrator, or to the dealer finance office if the contract says to. Include your name, the VIN, the contract number, the payoff or sale date, the odometer reading, and where the refund should go. Use a delivery method you can track and keep a copy.

Check the refund amount

When the loan ends early, the CFPB describes the usual result as a pro rata refund of the prepaid cost for the unused part, often called the unearned premium. The contract spells out the method and any cancellation fee, so compare the check to that section. A GAP contract that ran for two years of a five year loan should return most of its price, not a token amount.

Escalate if nothing arrives

If the administrator stalls or the amount looks wrong, call or write the lender that serviced the loan, since the CFPB holds servicers responsible for making sure the refund happens. Then file with the CFPB complaint portal under vehicle loans or leases, and with your state attorney general.

If the car was totaled. File the GAP claim first, since that is what the coverage is for. A separate extended warranty can still be canceled under its own cancellation section once the claim is settled.

If you refinanced. The old loan ended, so the add-ons tied to it can be canceled the same way. Check that the new lender did not sell you a second GAP policy.

If a stranger calls about your car warranty. The FTC says these callers probably are not working with your dealer or manufacturer. Report them at ReportFraud.ftc.gov.

Sources. CFPB: What is GAP insurance, CFPB: What is an extended warranty or vehicle service contract, CFPB supervisory findings on unrefunded add-on fees, FTC: Auto warranties and auto service contracts, CFPB complaint portal.