The United States Department of Transportation estimates that Americans drove around 12,700 miles during the pandemic. Before the lockdowns, Americans racked up 14,300 to 13,500 miles in 2019 and 2018, respectively. Needless to say, cars are important to the American way of life, but unfortunately, repairs are only getting more expensive.
That’s where warranties come in. According to Kelley Blue Book, a car warranty is a repair contract mitigating a car owner’s financial risk for a set period of time. Warranties are meant to protect car owners from out-of-pocket fees, but not all warranties are the same. Some are worthwhile, but others turn out to be practically worthless.
Warranty companies thrive on customer ignorance, so knowing what warranties cover is key to getting your dollar’s worth. Kelley Blue Book explains that there are many types of warranties. A new car warranty is a feature included in any car purchase. This means a dealer should never attempt to charge a fee. Comprehensive warranties cover every part of a car, while powertrain warranties cover a car’s moving parts that wear out over an extended period of time. Corrosion warranties are useful for cold areas with salted roads, and emissions warranties protect the parts that control a car’s emissions. Generally, car warranties safeguard owners from damage or malfunctions that can’t be considered normal wear and tear.
But there’s another perk when it comes to selling a car with an active warranty. Recently, former Toyota Finance worker Shamara Wells (@shamarawells) shared how car owners with a warranty can cash out when they sell their vehicle. Her TikTok garnered over 909,000 views as of publication.
Sitting in her car, Wells shares how warranty companies supposedly prey on customers’ ignorance.
“I used to work for Toyota Finance, and I wanna tell you guys something that a lot of people do not know when they trade in their vehicle,” she said. “If you trade in your vehicle, or if you sell your vehicle, or if you wreck your vehicle, and it has an active warranty on it, the warranty company owes you a check.”
How does it work?
Castle Buy Center reports that consumers with a warranty who sell or trade in their car before the warranty’s expiration date will receive a prorated refund for the unused time. Owners need to submit a few documents, but the process is fairly simple. Documents include the original warranty documents, a copy of the odometer reading before the sale, and paperwork showing the sale or trade-in date.
“But you have to reach out to them,” Wells advised.
Then, she urged warranty owners to take charge. “You have to think the warranty company is just assuming you still have the vehicle,” she said. “They’re not deceiving you by not notifying you that they owe you some money.”
@shamarawells I worked at Toyota Finace & here’s something a lot of car buyers aren’t aware of! #car #tradein #blacktiktok #blackgirltiktok #money #newcar ♬ original sound – Shamara Wells
Some viewers agreed, adding some advice of their own.
“Yep! Apply for a refund on GAP and Extended warranty every time!” one said.
“Also, if you refinance you are due a check for the gap insurance,” a second added.
Others argued that it wasn’t as easy as she claimed.
“It’s not easy. The dealership will try to pretend that they don’t know anything about it,” a viewer replied.
“Omg. You know how many warranty companies owe me money,” another said.
Warranties are contracts, and like all contracts, it’s important to know what to avoid. One expert believes they are a scam, while another advises drivers to avoid warranties purchased after the original one expires.
The Daily Dot reached out to Wells via TikTok comments for further information.
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