Are you wondering, “ If I refinance my car loan Will I lose my warranty”? Well, the answer to this question is not that simple. In most cases, when you have a manufacturer or an extended warranty, you don’t lose it. However, there are some solid exceptions. Let’s take a close look to understand the relation between your car warranty and refinancing.
A Deep-Down Analysis of Auto Warranties
Commonly-used warranties come with several default services that you can access through them.
When buying a new or a certified second-hand vehicle, you get a car warranty. It includes services like vehicle protection and repair coverage. Most car warranties have a starting point of three years or 35,000 miles. However, some may be short or long. Keep in mind that certified pre-owned cars don’t have as exclusive warranties as the new ones.
When financing a used vehicle, you can buy an extended warranty. It is more similar to an insurance plan as it covers the repairing costs etc. you can purchase such service contracts anytime you feel the need. However, at the time of purchase, many car dealers also offer such insurance plans.
How Does Refinancing Car Loan With a Warranty Look?
Refinancing means closing your current loan and starting a new one on the same vehicle. But the difference is that a refinanced auto loan comes with lowered interest rates. You can do so by contacting your lender or a refinancing company. Through refinancing, you have to pay discounted monthly car payments, which is a total win.
Refinancing also covers any extended warranty that you have activated through your loan. It is because refinancing covers your original auto loan. Your car warranty is not affected as long as your refinanced loan is providing coverage.
What Are the Refinancing Requirements?
Lenders offering auto loan refinancing have requirements that include having a good credit score and vehicle condition. Requirements vary from lender to lender, but here are some standard must-haves:
- You must have an active auto loan
- The vehicle should be worth almost equal to or more than the loan amount
- The car must be in good condition, like acceptable age and mileage.
- The car’s title must be clean
- You and your loan must follow the term and conditions given by the lender
If you have an excellent credit score, you’ll get a good refinancing offer. However, if you have taken out your previous loan with bad credit and now you’ve improved the credit, then you’re also eligible for loan refinancing.
Remember that there is no gain in delaying your loan refinancing. If you waste time considering, you’ll end up paying a big sum of interest money, mostly when refinancing to a longer-term plan.
You should build up a solid payment history before choosing to refinance the auto loan. The reason is that you’ll be signing a long-term refinanced loan with a lower interest rate. Keep in mind that in case of bad credit refinancing, you’ll have to wait for one year to become re-eligible for signing a new contract.
Now let’s dig into, do I lose my car warranty if I refinance or not?
If I Refinance My Car Loan Will I Lose My Warranty?
The straightforward answer is no. Your service contract and car warranty will most likely survive the refinancing. However, look out for conditions on your warranty card before going for refinancing because some warranties have warnings such as warranty cancellation on refinancing, etc. It’s best to do a thorough rundown on the documents before making a final decision.
Here is a list of items that can nullify your car warranty instead of auto loan refinancing.
- Title changes
- Misuse of the vehicle
- Odometer tampering
- Improper vehicle care
- Aftermarket alteration
So, if I refinance my car loan, will I lose my warranty? No, you don’t. Car warranty is not sensitive to refinancing, but it gets canceled when the vehicle is used improperly or illegally and when unlawful alterations are made.