Auto Extended Warranty Market Size 2024-2028
The auto extended warranty market size is forecast to increase by USD 14.1 billion at a CAGR of 6.35% between 2023 and 2028.
- The extended warranty market in North America is witnessing significant growth due to various trends and factors. Flexible pricing schemes are gaining popularity among consumers, enabling them to customize their coverage based on their budget and vehicle usage. companies are expanding their service portfolios to cater to diverse customer needs, offering additional benefits such as roadside assistance and trip interruption coverage. However, the market faces challenges such as increasing security threats, leading to an increased focus on cybersecurity measures to protect customer data. These trends and challenges are shaping the future of the extended warranty market in North America.
What will be the Size of the Auto Extended Warranty Market During the Forecast Period?
- The market In the United States continues to experience significant growth, driven by the increasing complexity of vehicles and the desire of consumers to mitigate the financial risks associated with unexpected repairs. Optional warranties, offered by both original equipment manufacturers (OEMs) and independent providers, provide coverage for mechanical and electrical components beyond the original manufacturer's warranty. Coverage options vary, with some plans focusing on powertrain and others extending to electrical systems, air conditioning, and other components. Durations and mileage limits also differ, allowing consumers to choose the level of protection that best suits their needs. The implementation of advanced technologies in vehicles, such as electric and hybrid systems, has increased the importance of extended warranty plans, particularly for electrical components.
- Customized coverage options and digital platforms have streamlined the purchase process, making it more convenient for vehicle owners. Value-added services, such as roadside assistance and rental car reimbursement, have also become increasingly popular. Consumer perception of extended warranties is improving, with trustworthiness a key factor In the decision-making process. The use of genuine parts and the transparency of coverage details are important considerations for consumers when selecting a provider. Overall, the market is expected to continue growing, driven by the increasing complexity of vehicles and the desire of consumers for peace of mind when it comes to unexpected repair costs.
How is this Auto Extended Warranty Industry segmented and which is the largest segment?
The auto extended warranty industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
- End-user
- Personal
- Commercial
- Geography
- North America
- US
- Europe
- Germany
- UK
- APAC
- China
- Japan
- South America
- Middle East and Africa
- North America
By End-user Insights
- The personal segment is estimated to witness significant growth during the forecast period.
companies In the market provide various programs, including extended service plans, mobile insurance, and protection plans, to businesses such as retailers and manufacturers. These offerings include risk management programs that cover the cost of wear and tear under an extended warranty, as well as protection against manufacturing defects. By extending the warranty period, automotive manufacturers, distributors, and retailers aim to enhance the value of their products and differentiate them In the market. For instance, a manufacturer may offer a one-year warranty on its cars and extend the coverage with an additional two- or three-year warranty. Implementations of technologies such as GPS, telematics, artificial intelligence, powertrain coverage, stated component coverage, and exclusionary coverage facilitate the effective delivery of these extended warranty services.
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The Personal segment was valued at USD 23.40 billion in 2018 and showed a gradual increase during the forecast period.
Regional Analysis
- North America is estimated to contribute 65% to the growth of the global market during the forecast period.
Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The US is the leading market for auto extended warranties in North America, driven by the presence of major automotive industries and advanced technological innovations. With a mature automotive industry and high consumer disposable income, the US market is projected to experience steady growth during the forecast period. Top automotive manufacturers, such as Ford Motor Co. And General Motors Co., are based In the US and are at the forefront of technological advancements and vehicle complexity. The demand for customized coverage options, digital platforms, and value-added services has increased, making auto extended warranties an attractive proposition for consumers. The US market for auto extended warranties is expected to benefit from the increasing popularity of advanced technologies and the growing complexity of vehicles.
Market Dynamics
Our auto extended warranty market researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
What are the key market drivers leading to the rise in adoption of Auto Extended Warranty Industry?
Flexible pricing schemes is the key driver of the market.
- Auto extended warranties offer vehicle owners additional protection beyond the standard manufacturer's warranty for their vehicles. These optional plans cover mechanical and electrical components, including powertrain, electrical system, air conditioning, and more. Independent providers and auto dealers offer various coverage options, durations, and mileage limits. The pricing for these plans is based on factors such as vehicle type, usage, previous claims, and insurance history. Auto extended warranties provide flexibility in cost assessment, allowing payment on an annual, semi-annual, or quarterly basis. This conversion of fixed costs to variable costs can be beneficial for consumers. The implementation of technologies like GPS, telematics, artificial intelligence, and digital platforms enhances the customization of coverage options.
- Consumers purchasing new or used vehicles can benefit from extended warranties, as they can increase resale value and provide peace of mind. Trustworthiness and consumer perception are essential factors In the decision-making process for vehicle owners when choosing a warranty provider. Authorized repair facilities staffed with qualified technicians and the use of genuine parts ensure the highest quality of repairs. Vehicle complexity and advanced technologies require specialized coverage, making customized plans increasingly popular. As the automotive industry continues to evolve, the market for auto extended warranties is expected to grow. Consumers can choose from various service contracts, including powertrain coverage, stated component coverage, and exclusionary coverage, to find the best fit for their needs.
What are the market trends shaping the Auto Extended Warranty Industry?
Expansion of service portfolio by vendors is the upcoming market trend.
- The market In the US is witnessing significant growth due to the increasing demand from both individuals and businesses for additional coverage beyond the standard manufacturer's warranty. companies in this market are expanding their service offerings to cater to this demand, providing services such as part replacement and related vehicle services. Furthermore, they are also targeting small-to-medium-sized commercial enterprises, in addition to large enterprises. The implementation of advanced technologies like GPS, telematics, artificial intelligence, and digital platforms in extended warranty plans is driving the market's growth. New vehicles and used vehicles alike are covered under these extended warranty plans, which come with various coverage options, durations, and mileage limits.
- Transferable plans are also available, enhancing the resale value of vehicles. Consumers perceive extended warranties as a value-added service, increasing trustworthiness towards the warranty provider and authorized repair facilities that use qualified technicians and genuine parts. The complexity of vehicles and the integration of advanced technologies necessitate customized coverage options. As a result, the market is expected to grow during the forecast period, with powertrain coverage, stated component coverage, and exclusionary coverage being the most popular types. The purchase process for extended warranties is becoming more streamlined, with digital platforms and value-added services making the process more convenient for consumers.
- In conclusion, the market In the US is experiencing growth due to the expanding service offerings of companies and the increasing demand for extended coverage for various automobiles. The integration of advanced technologies and customized coverage options is further driving the market's growth.
What challenges does Auto Extended Warranty Industry face during the growth?
Security threat is a key challenge affecting the industry growth.
- The market is witnessing significant growth as technology plays an increasingly important role In the implementation of these plans. Wear and tear is a common concern for vehicle owners, leading them to seek optional warranty coverage for mechanical and electrical components, such as the powertrain, electrical system, air conditioning, and more. Independent providers and third-party companies offer various coverage options with different durations and mileage limits, making it essential for consumers to understand the terms before purchasing. New vehicles come with standard protection plans, but used vehicles and loan terms often necessitate extended coverage. As vehicles become more complex with advanced technologies like GPS, telematics, artificial intelligence, and customized coverage options, digital platforms have become integral to the purchase process.
- Consumers value added services, such as transferable plans, that enhance resale value and provide peace of mind. However, the increasing use of technology in extended warranties also raises concerns regarding data security. Cybersecurity breaches can result in significant financial losses due to the misuse of sensitive information. Vehicle owners must trust the warranty provider, authorized repair facilities, and qualified technicians to use genuine parts and maintaIn the integrity of their data. The implementation of robust cybersecurity measures is crucial for companies to maintain consumer perception and trustworthiness In the market.
Exclusive Customer Landscape
The auto extended warranty market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the auto extended warranty market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Key Companies & Market Insights
Companies are implementing various strategies, such as strategic alliances, auto extended warranty market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence In the industry.
AAA Warranty Services - Our company provides extended auto warranties for both new and used cars, as well as tire and wheel protection plans. These options offer peace of mind for vehicle owners by extending the coverage beyond the original manufacturer's warranty. By investing in an extended auto warranty, you can mitigate the financial risk of unexpected repairs and maintenance costs. Our plans are designed to fit various budgets and vehicle needs, ensuring a customized solution for each customer. Trust us to help you protect your investment in your car.
The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
- AAA Warranty Services
- Allianz SE
- AmTrust Financial Services Inc.
- Assurant Inc.
- Asurion LLC
- AXA Group
- Carchex LLC
- CarShield
- Concord Auto Protect
- Corporate Warranties India Pvt. Ltd.
- Edel Assurance LLP
- Endurance Warranty Services LLC
- Hyundai Motor Co.
- Repair Ventures LLC
- Tata Motors Ltd.
- The Allstate Corp.
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key industry players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Research Analyst Overview
The extended warranty market encompasses optional coverage plans that vehicle owners can purchase to safeguard their vehicles from the financial burden of unexpected mechanical and electrical repairs. These plans, also known as service contracts, are designed to provide protection beyond the manufacturer's standard warranty. Independent providers and auto dealers offer extended warranty plans for various vehicle components, including mechanical and electrical systems such as powertrains, electrical systems, air conditioning, and more. These plans can cover new vehicles as well as used ones, catering to a diverse range of consumers. The implementation of advanced technologies, such as GPS, telematics, artificial intelligence, and digital platforms, has significantly impacted the extended warranty market.
These technologies enable real-time monitoring of vehicle performance and diagnostics, allowing for more accurate and efficient repair services. Moreover, the increasing complexity of vehicles and the integration of advanced technologies have led to customized coverage options. Consumers can now choose from various durations, mileage limits, and transferable plans based on their specific needs and budgets. The purchase process for extended warranty plans has also evolved, with many providers offering value-added services and consumer perception playing a crucial role In the decision-making process. Trustworthiness and the reputation of the warranty provider, as well as the availability of authorized repair facilities staffed with qualified technicians using genuine parts, are essential factors for consumers.
The extended warranty market is not limited to the automotive industry. Consumer electronics, mobile devices, and home appliances also offer extended coverage plans. However, the dynamics of each industry may vary, with factors such as vehicle age, new vehicle vs. Used vehicle, loan terms, and consumer behavior influencing the market. In conclusion, the extended warranty market offers consumers peace of mind by providing protection against the financial risks associated with vehicle repairs. The integration of advanced technologies and the customization of coverage options have made these plans increasingly popular, catering to the diverse needs of consumers in various industries.
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Auto Extended Warranty Market Scope |
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Report Coverage |
Details |
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Page number |
133 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.35% |
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Market growth 2024-2028 |
USD 14.1 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
5.63 |
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Key countries |
US, UK, Germany, China, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
What are the Key Data Covered in this Auto Extended Warranty Market Research and Growth Report?
- CAGR of the Auto Extended Warranty industry during the forecast period
- Detailed information on factors that will drive the Auto Extended Warranty growth and forecasting between 2024 and 2028
- Precise estimation of the size of the market and its contribution of the industry in focus to the parent market
- Accurate predictions about upcoming growth and trends and changes in consumer behaviour
- Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
- Thorough analysis of the market’s competitive landscape and detailed information about companies
- Comprehensive analysis of factors that will challenge the auto extended warranty market growth of industry companies
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