Car Warranty, no pro rata refund? Is that legal?

f.castle

Hi all,

I have seen a car warranty (obviously a rip off), but the t&c's say the cooling off period is within the first 14 days, but any cancellation after that will mean no money is refunded.
I queried this with 2 sales people, and posed the question, say I take out a 12 month warranty, and in month 3 I decide to cancel, don't I get a pro-rata refund for the remaining 9 months?
The answer was no from both sales people.

Is that legal?
It's the big assist warranty from .....big motoring world....

thanks,
FC

macman

Why would you? The clue is in the word contract: if you breach it after 3 months, you are not entitled to a refund, and the other party is entitled to recover their losses. 
Unless the contract has a break clause or allows you to terminate early.
What would make it 'illegal'?

Grey_Critic

See nothing wrong with that. It states quite clearly that there is no refund after that date.

You could argue that within the purchase price of any item there is an element of warranty.

Lets assume you buy a product and after three months YOU damage it beyond repair - so there is 9 months warranty left of the product that you would never claim on would you expect a  refund of the unused/unexpired warranty

k3lvc

And potentially the issue is with that specific warranty (and/or retailer)

I've had extended warranties with both Mini and Audi that have been cancellable for a pro-rata refund when selling the car (assuming no claims had been made)

f.castle

macman said:

Why would you? The clue is in the word contract: if you breach it after 3 months, you are not entitled to a refund, and the other party is entitled to recover their losses. 
Unless the contract has a break clause or allows you to terminate early.
What would make it 'illegal'?

How am I in breach?
If I didn't feel I needed the warranty after 3 months, and I didn't claim.

what make it seem (il)legal? I've never seen a term like this before, seems very unfair for the consumer.

DanDare999

f.castle said:

macman said:

Why would you? The clue is in the word contract: if you breach it after 3 months, you are not entitled to a refund, and the other party is entitled to recover their losses. 
Unless the contract has a break clause or allows you to terminate early.
What would make it 'illegal'?

How am I in breach?
If I didn't feel I needed the warranty after 3 months, and I didn't claim.

what make it seem (il)legal? I've never seen a term like this before, seems very unfair for the consumer.

Taking out a 12 month warranty is agreeing to have it for 12 months?

There is a simple solution, don't take the warranty. 

ontheroad1970

If the contract states that after the cooling off period, there is no refund of monies paid, and you sign it, either physically or electronically, then they are doing nothing wrong.  They are applying contract terms.  If you want to be able to cancel and get a pro rata refund, then find a company that will do a contract that allows this.  

cymruchris

If it's obviously a rip off - why would you even want it for 3 months? Just don't take it in the first place - and either pay your own repairs when something goes wrong, or look at alternative warranty products. 

 f.castle said:

Hi all,

I have seen a car warranty (obviously a rip off), 

macman

f.castle said:

macman said:

Why would you? The clue is in the word contract: if you breach it after 3 months, you are not entitled to a refund, and the other party is entitled to recover their losses. 
Unless the contract has a break clause or allows you to terminate early.
What would make it 'illegal'?

How am I in breach?
If I didn't feel I needed the warranty after 3 months, and I didn't claim.

what make it seem (il)legal? I've never seen a term like this before, seems very unfair for the consumer.

You are in breach if you contract for 12m (minimum term) and then want to cancel after 3. Whether you claim or not is irrelevant.
Minimum terms are present in many contracts, your phone contract, your landline contract...
If you want to get out after just 3 months, then you need to find a warranty with a 3 month minimum term.

Herzlos

Lots of 12 month contracts don't pro-rata. You'll find that for most phone contracts if you cancel within that period you're still due to pay for the rest of the contract anyway.

As long as it's up front, and you agreed to it, then it's all above board.