Complete Guide
How to Calculate Your Pro-Rata Refund
Don't trust the dealer's math. Learn the exact formula for time vs. mileage proration to ensure you get every penny back.
Key Takeaways
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The Proration Formula
Refunds are usually based on Time or Mileage, whichever yields the *smaller* refund (benefiting the provider).
Formula: (Unused Portion / Total Warranty) x Purchase Price
- Example:
- Price: $3,000
- Term: 60 months / 60,000 miles
- Used: 15 months (25%) / 20,000 miles (33%)
Calculation: Since you used 33% of the miles but only 25% of the time, they will use the Mileage usage to calculate the refund. Remaining: 67% Refund: $3,000 x 0.67 = $2,010
Frequently Asked Questions
Do they deduct claims paid?
It depends on the state. In California, they generally cannot deduct claims from the refund. In other states, they subtract any repair costs they paid from your refund check.
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