I just bought a 05 RL from a friend of mine (I'm the third owner). He bought the car from a lexus dealer and bought an extended warranty from lexus ($1700). I bought an acura care warranty because it covers more components so I have no use for the lexus warranty. I was reading the Lexus book and it says:

CANCELLATION: Within 30 days of the date of this agreement, if no benefits have been paid, you may cancel this agreement and TMSC will refund the purchase price.

In all other cases. TMSC will pay a prorated refund based on elapsed tme from the agreement date or elapsed mileage from apreement mileage minus a $25 processing fee.

A penalty of 10% of the purchase price per month must be added to the cancellation refunds not received by you within 30 days after the dealer or administrator receives this agreement.

I am clear on the first two parts but what does the third mean. I am assuming it means I lose 10% value every month but it's very clear to me.

 

I believe this is ten percent of the purchase price for the warranty, in addition to whatever prorated price Lexus chooses to pay you. I'd go get whatever money you can now.

 

I called Lexus and they will give me $1250. WOOOHOOO. So now I have an acura warranty that overs more stuff for longer and made $100 out of it. Not bad at all...