Due to the complex metal flow in the cold extrusion of sun gear, the teeth accuracy of formed sun gear is poor. In order to improve the accuracy of the extruded sun gear, a novel precision finishing method with different tools was proposed in this study. Finite element simulations were performed using DEFORM, and a new finite element (FE) prediction strategy was developed to obtain an in-depth understanding of the deviation distribution laws of the finished sun gear. Then, the influences of different finishing tools on tooth deformation, tool stress, forming load and tooth accuracy were examined. The investigation results show that the profile accuracy of external gear can be improved from ninth to seventh class, lead accuracy can be enhanced from tenth to eighth class, and total M value deviation of internal spline is reduced to 72.3 μm by the precision finishing method with interference mandrel. Therefore, the interference mandrel is recommended as the optimal reshaping tool for commercial production of sun gears. The simulation results are well agreed with the experimental results, which verifies the feasibility of the precision finishing method and the reliability of the FE prediction strategy.