What Has Been the Progress and Growth of the Auto Extended Warranty Market in Recent Years?
The auto extended warranty market has seen considerable growth due to a variety of factors.
• The market size of the auto extended warranty has witnessed robust growth lately. It is projected to increase from $32.76 billion in 2024 to $34.95 billion in 2025, experiencing a compound annual growth rate (CAGR) of 6.7%.
Factors responsible for this growth in the historical period include longer vehicle lifespan, heightened consumer awareness, intricacy of vehicle systems, assurance of coverage, and the expansion of the used car market.
What Is The Expected Growth In The Auto Extended Warranty Market Size Evolve over the Forecast Period?
The auto extended warranty market is expected to maintain its strong growth trajectory in upcoming years.
• The market for extended auto warranties is predicted to experience substantial expansion in the coming years. By 2029, its value is projected to reach $43.28 billion with a compound annual growth rate (CAGR) of 5.5%.
The projected growth in this period can be linked to factors like increasing repair expenses, intensified market competition, tailored warranty plans, as well as changes in leasing, financing, and regulation. Key trends anticipated during this period encompass the employment of technology for claims management, the emergence of transferable warranty policies, the introduction of wear-and-tear insurance, emphasis on improved customer services, the creation of comprehensive maintenance plans, and the incorporation of roadside assistance services.
What Main Forces Are Fueling Expansion In The Auto Extended Warranty Market?
The surge in automotive production is anticipated to spur the expansion of the auto extended warranty market. The car industry, which includes the conception, growth, manufacture, and servicing of a variety of vehicles like cars, trucks, and motorcycles, is expanding. Auto extended warranties are advantageous to automotive production as they boost consumer trust in vehicle purchases, encourage brand fidelity, and advocate high manufacturing standards. This is because the manufacturers are driven to reduce warranty claims and secure long-lasting customer contentment. To illustrate, data from the Germany-based European Automobile Manufacturers Association (ACEA) revealed that, in May 2023, the global automotive vehicle production had gone up by 5.7%, reaching 85.4 million in 2022 compared to the previous year. Consequently, the escalating demand for automotive production is bolstering the growth of the auto extended warranty market. The auto extended warranty market continues to grow due to the escalating costs associated with vehicle repairs. If there's damage or an issue, automotive repairs are performed to restore the vehicle to its ideal operational state. An extended warranty can provide coverage for repair costs that extend beyond the initial warranty provided by the manufacturer. This could potentially save vehicle owners from unforeseen repair expenses, especially as cars grow older and are more susceptible to malfunctions. For example, data from the US-based Federal Reserve Bank of Minneapolis in October 2023 indicated a 17% hike in vehicle repair costs in 2022. Additionally, a poll of 584 participants highlighted that roughly 34% were apprehensive about car repairs in the same year. Thus, the accelerating costs of vehicle repairs are propelling the auto extended warranty market's growth.
What Are The Primary Segments In The Global Auto Extended Warranty Market?
The auto extended warranty market covered in this report is segmented –
1) By Product: Powertrain Warranty, Component Warranty, Bumper-To-Bumper Warranty
2) By Vehicle Age: New Vehicle, Used Vehicle
3) By Distribution Channel: Auto Dealers Or Manufacturers, Third-Party Providers
4) By Application: Passenger Vehicles, Commercial Vehicles
Subsegments:
1) By Powertrain Warranty: Engine Coverage, Transmission Coverage, Drivetrain Coverage
2) By Component Warranty: Electrical Component Coverage, HVAC System Coverage, Brake System Coverage, Other Component Coverage
3) By Bumper-To-Bumper Warranty: Comprehensive Coverage, Exclusionary Coverage, Named-Component Coverage
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How Are New Trends Impacting The Size Of The Auto Extended Warranty Market?
Firms leading the market are concentrating on innovative auto extended warranties to boost market revenue. An anytime warranty package is a form of warranty or service agreement provided by a manufacturer or service company that enables customers to secure extended coverage for a product, regardless of the original product's purchase date or if the standard warranty term has lapsed. Skoda Auto a.s., a car producer based in the Czech Republic, for instance, pioneered the anytime warranty package in India to elevate customer satisfaction and ownership experience in February 2023. This warranty package of 1 year or 20,000 kilometers targets older generations and car variants such as Kodiaq, superb, Octavia, yeti, and Rapid, and can be transferred to subsequent owners. Skoda vehicles within seven years of age and less than 130,000 kilometers are eligible for the anytime warranty and customers with expired contracts can also acquire the anytime warranty.
Who Are the Key Players In The Auto Extended Warranty Market?
Major companies operating in the auto extended warranty market report are:
• Industrial and Commercial Bank of China Limited
• China Ping An Insurance (Group) Co. Ltd.
• Axa S.A.
• Hyundai Motor Company
• Allstate Insurance Company
• Bradesco Seguros S.A.
• Zurich Insurance Group Ltd.
• Tata Motors Ltd.
• MAPFRE ESPANA S.A.
• Porto Seguro S.A.
• Ally Financial Inc.
• Assurant Inc.
• Allianz SE
• HDI Global SE
• AmTrust Financial Services Inc.
• Bajaj Allianz General Insurance Company Limited
• SBI General Insurance Company Limited
• Oman Insurance Company P.S.C.
• Endurance Warranty Services LLC
• American Auto Shield LLC
• CARCHEX
• Warranty Direct
• Corporate Warranties India Pvt. Ltd.
• Autoguard Warranties Ltd.
• CarSure
• Edel Assurance LLP
• Concord Auto Protect Inc.
• CarProtect Insurance Services Ltd.
• AAA Warranty Services
• Repair Ventures LLC
What Is The Most Dominant Region In The Auto Extended Warranty Market?
North America was the largest region in the auto extended warranty market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the auto extended warranty market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
