How to use the prorated warranty credit calculator
- Enter the original price and the warranty length in miles, months, years or hours.
- Enter the amount used in the same unit.
- Pick the proration rule: straight line from the first day, or full credit for an opening period followed by a straight line.
- Optionally add a service fee and a replacement price to see what you would pay.
Formula
straight line credit = price x (length - used) / length
full credit first: credit = price while used <= full period, then price x (length - used) / (length - full period)
credit toward replacement = max(0, credit - service fee)
The credit never goes above the price or below zero. Once the amount used reaches the warranty length, the credit is zero.
A tire with a 50,000 mile warranty
A tire cost $180 and carries a 50,000 mile warranty. After 32,000 miles, 64 percent of the warranty is used. The straight line credit is $180 x 18,000 / 50,000 = $64.80. If the replacement tire costs $195, you pay $195 - $64.80 = $130.20.
A battery that cost $140 with a 60 month warranty and 12 months of full credit, used for 20 months, gets $140 x 40 / 48 = $116.67. With a $10 service fee the credit is $106.67. At 72 months used, the warranty is over and the credit is $0.00.
How prorated warranties work
A prorated warranty covers a part of the cost that shrinks as you use the product. The share you get back falls in proportion to the miles driven, the months owned or the hours run. Some warranties give a full replacement for an early period, then switch to proration. That is the full credit first rule here.
Warranty papers often add conditions: only the product price counts, taxes and installation may be excluded, wear may be measured by tread depth rather than miles, and the credit may apply only toward a new product from the same seller.
Related checks
Before buying, it can help to see what extra coverage is worth with the Extended Warranty Calculator. To see what an item has cost for each use, try the Cost Per Use Calculator. For splitting a rent or charge across part of a month by days, see the Proration Calculator.
Assumptions and limits
- The credit falls evenly with use. Warranties with steps or tables will differ.
- The price entered is the amount the warranty refunds in full at the start.
- Taxes, installation, disposal and shipping are not included unless you fold them into the price.
- The warranty paperwork controls what you are owed, and this page only estimates it.
- The price, warranty length and use shown when the page opens are examples.
Frequently asked questions
What is a prorated warranty?
It is a promise to cover a share of the cost that gets smaller as you use the product. Early failures get most of the price back, and later ones get little.
Can I use years instead of months?
Yes. The unit is only a label. Enter the warranty length and the amount used in the same unit, and the credit is the same.
What happens if I enter more use than the warranty length?
The page treats the warranty as expired and shows a credit of zero. It does not return an error, because that is a valid situation.
Why must the full credit period be shorter than the warranty?
If it were as long as the warranty there would be nothing to prorate, and the formula would divide by zero. The page asks for a shorter period.