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7 On Your Side: Avoid extended headaches after buying extended warranty

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Nina Pineda reports on the car warranty battle.

A veteran says he was pressured into buying a high-priced warranty on a used car, but when it came time to issue a refund on the warranty, his mom was deployed to fight a losing battle.

Marie Baldwin says she's fighting against a defunct dealership. Her son Frank, a former Marine with two tours in Iraq, tried getting a refund of the $4,000 he spent on an extended warranty.

Just months after he bought a pre-owned Lexus, the vet was fortunate to walk away from an accident that totaled the car.

Marie says she asked the dealership for a refund on the warranty. The warranty company, GWC, told him he'd be entitled to a pro-rated refund -- 89 percent of what he originally paid.

Frank tracked his salesman to a new dealership and he offered a check from the warranty company: $907 on the $4,000 warranty. He declined the check.

Marie says the dealer, which the warranty company said is now operating as Certified Select Motors, was keeping the rest.

But there was a big hitch: Frank never got a copy of the signed contract or the extended warranty at point of sale. Without these, there was no proof of a deal.

7 On Your Side asked Frank to get the paperwork. And when he did, we found on page 5 of the 11-page warranty from GWC under "Cancellations and Refunds" -- "if vehicle is a total loss" the customer's entitled to a "pro-rated refund" of original price (pro-rated refund). Even if the selling dealer is "bankrupt or out of business."

GWC refunded the unearned portion to the customer, cutting the customer a check for $3,447.

7 On Your Side spoke to the manager at the dealership who said "what transpired was between him and the warranty company."

The warranty company apologized to the customer and said it will pursue getting money back from the dealership.

Some big takeaways: If you want to buy an extended warranty, remember you don't have to buy it at a dealership. You can shop around -- and perhaps get a better warranty and price from another company.

If you do buy it from a dealership, know what you're getting. Remember to always review the warranty before signing the deal.

And make sure to get copies of the signed dealer invoice and warranty at point of sale. Frank didn't get it. That was the problem.

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