Experienced owners know that no matter how much is invested in an RV, they are all simply houses on wheels with thousands of parts and pieces that can and will fail over time. Many owners take advantage of purchasing “extended warranties”, or more commonly referred to as service contracts, to protect themselves from large costly repairs that may occur after the manufacturer’s warranty expires. These coverages can extend out 5 to 7 years from the date of purchase and can cost thousands of dollars. Some people will pay cash for the service contracts while many will include it in the financing of the RV. Just like most insurance policies, one hopes to never have to use it, but everyone is glad they have it when needed. However, what happens when you decide to sell or trade in your RV that has years of coverage left? Good news. You have options to explore based on how you paid for the service contract and who you purchased from. You most likely can receive a pro-rated refund based on the remaining term of the policy.
Contact the finance department and request a cancellation form to be emailed to you. Sign and return to the dealer. The dealer will process your cancellation and you will typically see a refund in 4 to 6 weeks. NOTE: If you paid cash for the service contract, you will receive a refund directly to you. If you financed the service contract, the refund will be sent to your lien holder and will reduce the principal balance of your loan. If your current RV loan is paid off in full before the refund is processed, you will get the refund, not the lender. (Side note: If your refund is sent to the lien holder, your monthly payment will not change, however the principal balance of the loan will be lowered in the amount of the refund.)
Contact them directly and request a cancellation. They will then provide you with the necessary procedure to cancel and details regarding your pro-rated refund.
Some policies are transferrable, meaning you can transfer the remaining coverage on your RV to the new owner. However, one would have to figure out what their cancellation refund would be versus how much more the buyer would pay for the added benefit of coverage. Typically, it is best to just cancel the service contract and let the new owners buy your RV “as is” and let them decide to add a service contract if they choose.
Whether you are selling or trading in your RV, make sure you don’t forget to address these important steps that can save you thousands of dollars.