Car finance warranty refund dispute – finance broker promised £900 refund then refused

ItzFrexite

Hi all,

I’m looking for views on a car finance/warranty dispute.

I arranged finance through a car finance broker for a used car. A £900 Warranties2000 Flexi Gold warranty was added to the finance.

Before I actually collected/bought the car, I found a better finance deal and settled the original finance in full.

On 27 May 2026, I emailed the finance broker confirming that the original finance had already been settled and that I wanted the £900 warranty cancelled.

On 5 June 2026, they replied in writing confirming they had received my cancellation request and said:

“Please be assured that we will ensure a solution is found and that the £900 will be refunded to you.”

I then waited nearly two months.

When I chased them, they said they could no longer refund the warranty because it had been funded through the finance agreement and that finance had already been settled.

They later said it only “subsequently came to light” that the finance had already been settled when I requested cancellation, but my 27 May email explicitly told them that at the same time I requested the warranty cancellation.

I’ve now asked them to identify the exact clause in either the finance agreement or warranty terms which says settling the finance removes the right to cancel/refund the warranty. So far they haven’t provided one.

Warranties2000’s website also says there are no refunds after the first 28 days from purchase of the vehicle. My cancellation request was actually made before I collected/purchased the vehicle.

I’ve now raised a formal complaint with the finance broker and contacted Warranties2000 directly to ask what their records show.

Does anyone have experience of a similar situation, or views on whether the broker’s written promise/refund handling would be relevant to a Financial Ombudsman complaint?

Thanks

Aylesbury_Duck

I'm not an expert on finance agreements, but their argument seems to be that by paying off the original agreement, the warranty's 28 day cooling-off period (if that's what it was) is effectively moot. By taking out a new finance agreement you've created an entirely new deal, with the new one funding the car plus the warranty. I can see how that might be the case.

I assume the new finance deal covered the cost of the car plus the warranty? i.e. if the car was £10k then your original finance deal was for £10,900. You took out a new finance deal for £10,900 and used it to pay the original off? If that is the case, then I think the warranty should stand. Are you now in a position where you have neither the warranty nor the £900 you paid for it?

Woodstok2000

For future reference, you could have avoided this bt cancelling the warranty first, getting your refund and then settling the finance. Would have been much simpler.

ch3shirecat4

A very similar thing happened to me. Didn't end up getting the money. Ended up going to Streamline Car Finance for my next car and had no issues