Extended Warranty

Transfer and Cancellation Clauses: What you need to know

By May 27, 2018 March 4th, 2019 No Comments
extended car warranty transfer

The importance of a transfer and cancellation clause


A purchase of a mechanical breakdown insurance policy is an investment in the future of your vehicle. Your needs and situation are always changing which is why the transfer clause is such an important feature of any warranty product when you go to sell your vehicle.

So what are your options?


  • No transfer clause- Some warranties are sold at the time of purchase for up to 7 years and if you end up selling the vehicle before coverage kicks in the warranty purchase will vanish.
  • Private sale transfer- This is the most common clause. If you sell the vehicle privately it can be transferred. The biggest flag here is that vehicles are not often sold privately in today’s world. This clause specifically excludes dealer trades.
  • Transfer at any sale- In this case you have the ability to negotiate a better sale or trade value recognizing the additional investment in the mechanical performance of your vehicle.

Cancellations have even less wiggle room due to complicated regulations (or lack-of):

  • Warranty Contract- Manufacturer’s extended warranty is often done through a contract. Most of these contracts include a stipulation that it becomes non-refundable after 30 or 60 days. Since these are not regulated insurance policies there is no requirement to have cancellation clauses. Your hands are tied.
  • Insurance Policy- Third party warranty providers sell mechanical breakdown insurance that is subject to a cancellation provision during the policy term. You have options here.

With mechanical breakdown insurance policies Obvi has redefined the standard in automotive warranty while protecting your investment. We are vehicle owners too and we’ve been in the same situations you have. Get an instant quote on our website today and you’ll discover the cost savings, but also the transparent and fair policy we provide.