Extended service contracts are one of the most profitable products dealers sell. Because of this, finance managers are often incentivized to sell them aggressively. A common tactic is to tell buyers that the warranty is required by the lender, required for financing approval, or required as a condition of the sale. None of these statements is true — extended warranties are always optional.

Under the Truth in Lending Act (TILA) and Regulation Z, if a credit product is required as a condition of financing, its cost must be included in the Annual Percentage Rate (APR) disclosed to the buyer. Dealers who tell buyers a warranty is required but do not include its cost in the APR are violating federal disclosure requirements.

Under Florida law, telling a buyer that a product is required when it is not is a misrepresentation under § 501.976 and a deceptive act under FDUTPA. The misrepresentation does not need to be in writing — oral statements made by the finance manager during the closing process are sufficient to support a claim.

If you purchased an extended warranty because you were told it was required, you may be entitled to a refund of the warranty cost, a refund of the finance charges attributable to it, and attorney's fees under FDUTPA. The strength of your claim depends on what you were told, by whom, and whether you have any documentation of the representation.

If you are still in the process of buying a car and a finance manager tells you that a warranty is required, ask them to put that statement in writing. If they refuse, that is a strong signal that the statement is false. You have the right to decline any optional product, and a dealer who conditions the sale on your acceptance of an optional product is acting unlawfully.