US Extended Warranty Market Analysis - Size and Forecast 2024-2028

US Extended Warranty Market Size 2024-2028

The US extended warranty market size is forecast to increase by USD 13.09 billion at a CAGR of 4.7% between 2023 and 2028.

• In the market, the extended warranty sector is witnessing significant growth, particularly In the electric motorcycle and e-bike segments. The increasing popularity of these vehicles, driven by factors such as environmental concerns and the convenience they offer, is leading to an increase in demand for extended warranties. The use of advanced sensors and IoT technology In these vehicles, especially in Lithium-ion batteries, is also fueling this trend. However, challenges persist, including the security threats posed by cyberattacks on connected devices and the complexities of battery replacement and repair. As the market continues to evolve, companies are responding by offering new services and value-added features to differentiate themselves and meet the evolving needs of consumers.

What will be the Size of the market During the Forecast Period?

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• The extended warranty market for e-bikes In the US continues to gain traction as the popularity of these sustainable transportation alternatives increases. With the convenience of electric motors, e-bikes offer reduced operating costs compared to traditional vehicles and a minimal environmental impact. According to industry reports, annual sales of e-bikes In the US are projected to reach new heights, driven by the growing demand for electric motor classes such as mid-drive motors, hub motors, and friction-driven motors.
• Integrated batteries and lithium-ion batteries are becoming the norm, powering various e-bike models with varying levels of pedal-assist and throttle-assist. The market is witnessing innovation in ride quality and performance, with advanced features like torque sensors and weight distribution systems. As e-bikes become more sophisticated, the importance of proper maintenance, including battery care and motor upkeep, increases. Extended warranties provide peace of mind for e-bike owners, safeguarding their investment against potential repair costs.

How is this market segmented and which is the largest segment?

The market 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.

• Device
  • Automobile
  • Consumer electronics
  • Home appliances
  • Mobile devices and PCs
  • Others
• End-user
  • Businesses
  • Individuals
• Geography
  • US

By Device Insights

• The automobile segment is estimated to witness significant growth during the forecast period.

The US extended warranty market is driven by the maturity and growth of the automotive industry, which is the largest In the world and home to major players like Ford Motor Co. And General Motors Co. The industry's high disposable income consumer base and demand for luxury vehicles contribute significantly to the market's growth. Extended warranties are popular for their convenience, covering operating costs and providing protection against unexpected repairs, especially for electric vehicles such as e-bikes. E-bikes, with their increasing popularity, offer an alternative method of transportation that is both convenient and eco-friendly. Their electric motors come in various types, including mid-drive motors, hub motors, and friction-driven motors.

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Market Dynamics

Our US 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 US Extended Warranty Market?

High demand for household appliances is the key driver of the market.

• The market is witnessing significant growth due to the popularity of various consumer products, including electric bikes. With the increasing convenience and operating cost advantages of e-bikes over traditional bicycles and scooters, their sales have been on an annual upward trend. The integration of advanced electrical components such as electric motors, controllers, lithium-ion batteries, and torque sensors has made e-bikes an attractive alternative method for commuting and recreational activities. E-bikes come in various types, including those with mid-drive motors, hub motors, and friction-driven motors. The choice of motor type depends on factors like weight distribution, ride quality, performance, and mid-range pricing.
• Regenerative braking systems and torque sensors provide additional benefits like improved efficiency and pedal-assist or throttle-assist options. E-bike maintenance is relatively simple compared to electric motorcycles, making them a preferred choice for many consumers. The charging process is also more convenient, with batteries often being integrated into the bike frame for a sleek design. Comfort and quality are essential factors for e-bike buyers, with components like the motor, controller, and battery having significant power ratings and legal limits. E-bikes can help reduce environmental impact by decreasing the need for fossil fuel-based transportation methods. The market for e-bikes is expected to continue growing as technological advancements in battery capacity, weight, and lightweight lithium batteries (polymer, manganese, maintenance-free) further enhance their appeal.

What are the market trends shaping the US Extended Warranty Market?

Addition of new services by companies is the upcoming trend In the market.

• The market is experiencing growth as companies broaden their services beyond automobiles and consumer electronics. These services now cover various consumer durables such as furniture, lawn and garden equipment, jewelry, power tools, fitness equipment, bicycles, and outdoor recreation equipment. Additionally, companies are catering to small-to-medium-sized commercial enterprises, expanding their market reach beyond large corporations. For instance, American International Group, Inc. (AIG) launched the Lexington Middle Market Casualty team in September 2022 to serve this segment. E-bikes, specifically, have gained popularity due to their convenience, environmental impact, and mid-range pricing. They come with various motor types, including electric motor, mid-drive motors, hub motors, and friction-driven motors.
• The battery, usually lithium-ion, is integrated into the bike's frame or hub. E-bikes offer various riding modes, such as pedal-assist and throttle-assist, ensuring optimal ride quality and performance. The charging process is simple, and the electrical components, including the motor, controller, and battery, are efficient and lightweight. However, e-bikes require minimal maintenance, with components like torque sensors and drivetrain ensuring smooth operation. The legal limit for e-bikes is determined by federal law, with power ratings and horsepower varying based on motor type and battery capacity.

What challenges does US Extended Warranty Market face during the growth?

Security threats is a key challenge affecting the market growth.

• The extended warranty market In the US is experiencing notable growth, particularly In the electric bicycle sector. With the increasing popularity of e-bikes, convenience, and reduced operating costs have become key selling points. However, environmental impact is also a significant consideration for consumers. Electric motors, such as mid-drive motors, hub motors, and friction-driven motors, are integral to e-bike functionality. Lithium-ion batteries, including integrated batteries, are commonly used due to their efficiency, torque, and power ratings. E-bikes offer various drive systems, including hub drive motor, front-hub motors, and rear-hub motors, which impact weight distribution and ride quality. E-bike maintenance is crucial, with friction-drive motors, torque sensors, pedal-assist, and throttle-assist systems requiring regular attention.
• Performance, mid-range pricing, and regulatory compliance, such as Federal law and horsepower and battery capacity limitations, are also essential factors. Despite these advantages, the extended warranty market In the US faces challenges. Cybersecurity threats, including the use of automated scanning tools, have become more prevalent, posing a substantial risk to data privacy and security. Organizations must address these concerns to ensure the adoption of extended warranty services and maintain customer trust.

Exclusive Customer Landscape

The 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 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, market forecast , partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence In the market.

The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Allianz SE
• American International Group Inc.
• AmTrust Financial Services Inc.
• Assurant Inc.
• Asurion LLC
• AXA Group
• Carchex LLC
• Chubb Ltd.
• Endurance Warranty Services LLC
• 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 market 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 in the e-bike industry has experienced significant growth in recent years, driven by the increasing popularity of electric bicycles as an alternative transportation method. E-bikes offer convenience and cost savings compared to traditional vehicles, making them an attractive option for consumers. However, the operating costs of e-bikes, including battery replacement and maintenance, can add up over time. Extended warranties provide peace of mind for e-bike owners by covering these costs and protecting against potential malfunctions. The market dynamics of this sector are influenced by several factors. Firstly, the convenience of e-bikes as a mode of transportation has led to an increase in annual sales.

In addition, e-bikes offer the benefits of a regular bicycle, with the added assistance of an electric motor. This makes them an ideal solution for commuting, errands, and recreational activities. Moreover, the environmental impact of e-bikes is a significant factor driving the demand for extended warranties. E-bikes produce zero emissions, making them an eco-friendly alternative to cars and motorcycles. As more consumers become environmentally conscious, the demand for e-bikes and extended warranties is expected to grow. The market for e-bikes is diverse, with various types of electric motors and battery configurations available. Mid-drive motors and hub motors are the most common types of electric motors used in e-bikes.

Furthermore, mid-drive motors are integrated into the bike's drivetrain, providing better weight distribution and improved ride quality. Hub motors, on the other hand, are located In the wheel hubs, offering simplicity and ease of installation. Batteries are another critical component of e-bikes, with lithium-ion batteries being the most popular choice due to their high energy density and long life cycle. Integrated batteries offer better weight distribution and improved ride quality, while hub drive motor batteries can be located In the front or rear wheel. E-bike maintenance is an essential consideration for e-bike owners, and extended warranties can help mitigate the costs associated with it.

In addition, friction-driven motors and torque sensors are common maintenance items for e-bikes. Pedal-assist and throttle-assist systems also require regular maintenance to ensure optimal performance. The performance of e-bikes is a crucial factor influencing the extended warranty market. Mid-range pricing for e-bikes makes them accessible to a wider audience, and consumers expect reliable and efficient electrical components, including the motor, controller, and battery. Regenerative braking systems and scooters are also gaining popularity In the e-bike market, adding to the complexity of the extended warranty offerings.

Moreover, the diverse range of e-bike types, components, and maintenance requirements make extended warranties an essential consideration for e-bike owners. The market dynamics are influenced by various factors, including the type of electric motor, battery configuration, and regulatory requirements. As the e-bike market continues to grow, the demand for extended warranties is expected to increase, offering opportunities for businesses to capitalize on this trend.

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behaviour
• Growth of the market across US
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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