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2022

U.S. Auto Extended Warranty Market

U.S. Auto Extended Warranty Market Size, Share, Competitive Landscape and Trend Analysis Report by Coverage, Distribution Channel, Vehicle Age and Application : Opportunity Analysis and Industry Forecast, 2021-2030

BI : Financial Services

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Author's: Pradeep Ravi| Aarti Goswami | Onkar Sumant
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U.S. Auto Extended Warranty Market Outlook – 2030 

The U.S. auto extended warranty market size was valued at $18.36 billion in 2020, and is projected to reach $24.48 billion by 2030, growing at a CAGR of 2.9% from 2021 to 2030. 

Auto extended warranty is an insurance policy intended to cover expense of vehicle maintenance or damage post manufacturer’s warranty period. It is an optional warranty offered by manufacturers, dealerships, and independent providers at an extra cost beyond purchase price of a product. Furthermore, auto extended warranty provides protection on certain mechanical and electrical components, which are not covered under general auto warranty services, including powertrain, electrical system, and air conditioning systems. Moreover, auto extended warranty providers focus on improving consumer awareness toward benefits of extended warranty plan and educate them about available products and services, which fuel the U.S. auto extended warranty market growth. 

US-Auto-Extended-Warranty-Market

Rise in incidences of road accidents in the U.S. damages vehicle parts and their repair and/or replacement is expensive. Thus, auto extended warranty covers repair bills. This is an important factor that boosts the growth of the U.S. auto extended warranty market. However, lack of knowledge about coverage included in auto extended warranty and high additional cost of purchasing auto extended warranty limit the market growth. On the contrary, increase in usage of advanced technology among auto extended warranty providers is expected to provide lucrative growth opportunities for the U.S. auto extended warranty industry in future. 

The report focuses on growth prospects, restraints, and trends of the U.S. auto extended warranty market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers, on the U.S. auto extended warranty industry.

U.S. Auto Extended Warranty Market
By Coverage
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Exclusionary Coverage segment will generate the highest revenue during 2021 - 2030

Segment Overview

The U.S. auto extended warranty market is segmented on the basis of coverage, distribution channel, vehicle age, and application. Depending on coverage, it is fragmented into powertrain coverage, stated component coverage, and exclusionary coverage. On the basis of distribution channel, it is divided into auto dealers/manufacturers and third-party providers. As per vehicle age, it is bifurcated into new vehicle and used vehicle. By application, it is classified into personal and commercial. 

U.S. Auto Extended Warranty Market
By Distribution Channel
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Auto/Manufacturers segment will maintain the lead during the forecast period

Competitive Analysis

The key players profiled in the U.S. auto extended warranty market report are AmTrust Financial, ASSURANT INC., AXA, CARCHEX, CarShield, LLC, Concord Auto Protect, Endurance Warranty Services, LLC, Repair Ventures, LLC dba olive, Protect My Car, and Infinite Auto Protection. These key players have adopted various strategies, such as product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations, to increase their market penetration and strengthen their foothold in the industry.

U.S. Auto Extended Warranty Market
By Vehicle Age
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New Vehicle segment will dominate the market throughout the forecast period

COVID-19 Impact Analysis

COVID-19 pandemic negatively impacted the U.S. auto extended market pertaining to lockdown and travel ban imposed by the U.S. government, which declined sale of vehicles. However, as vehicles were not in use, chances of vehicle breakdown increased and thus, market players started offering services for those owners. This factor helped to increase sales of auto extended warranty in the U.S. Conversely, social distancing norms and work from home trends reduced the demand for vehicles, which negatively impacted the market.  

U.S. Auto Extended Warranty Market
By Application
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Personal segment will generate the highest revenue during 2021 - 2030

Top Impacting Factors

Rise in Number of Road Accidents in the U.S.

Rise in demand for auto extended warranty, due to accidents, including traffic collision, physical damage or bodily injury, theft, and fire increases pressure on warranty companies to invest and develop products that have less proliferation, high coverage, and that provide financial security in the form of medical injury or any other damages. Accidents are increasing in the U.S., in terms of road crashes, traffic injuries, drunk driving, and distracted driving for speeding, which further propels the U.S. auto extended warranty market opportunity. Several vehicle owners depend on auto extended warranty to protect themselves from future financial losses, including injuries to drivers, passengers, or pedestrians. 

In addition, auto warranty companies incorporate coverage to compensate beyond the warranty tenure to help maintain the vehicle for a longer period of time. Therefore, damage caused to vehicles, owing to rise in number of accidents in the U.S. encourage vehicle owners to purchase endurance extended warranty to cover any damage caused to the vehicle in case of a road accident post manufacturer’s warranty period. Therefore, rise in number of road accidents in the country drives the demand for extended car warranty.  

Lack of Awareness Regarding Auto Extended Warranty

Several vehicle owners in the country are unaware of the auto extended warranty, due to the fact that they rely on manufacturer’s warranty and pay later for any damage. Moreover, several vehicle consumers who are aware about auto extended warranty do not purchase it, considering it as an additional cost. Also, many consumers neglect purchasing auto extended warranty for their vehicles and are unaware of its benefits. Hence, this is a major factor that hampers the growth of the U.S. auto extended warranty market.

Key Benefits For Stakeholders 

  • The study provides in-depth analysis of the U.S. auto extended warranty market share along with current & future trends to illustrate the imminent investment pockets.
  • Information about key drivers, restrains, & opportunities and their impact analysis on the U.S. auto extended warranty market forecast are provided in the report.
  • Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the U.S. auto extended warranty market.
  • An extensive analysis of the key segments of the industry helps to understand the U.S. auto extended warranty market trends.
  • The quantitative analysis of the U.S. auto extended warranty market size from 2021 to 2030 is provided to determine the market potential.

U.S. Auto Extended Warranty Market Report Highlights

Aspects Details
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By Coverage
  • Powertrain Coverage
  • Stated Component Coverage
  • Exclusionary Coverage
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By Distribution Channel
  • Auto Dealers/Manufacturers
  • Third Party Providers
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By Vehicle Age
  • New Vehicle
  • Used Vehicle
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By Application
  • Personal
  • Commercial
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By Key Market Players
  • AmTrust Financial
  • ASSURANT INC.
  • AXA
  • CARCHEX
  • CarShield, LLC
  • Concord Auto Protect
  • Endurance Warranty Services, LLC
  • Infinite Auto Protection
  • Protect My Car
  • Repair Ventures, LLC dba olive

Analyst Review

Auto extended warranty providers are looking forward to implementing advanced technologies, including artificial intelligence (AI) and machine learning to improve products and services according to the choice of customer. Furthermore, increase in demand for luxurious cars in the U.S. is expected to provide lucrative opportunities for the market growth. Moreover, technological advances, including  telematics, black box, navigation & direction, and on board diagnostic(OBD2) devices in vehicles propel the growth of the market, giving opportunity to auto extended warranty companies in the country to provide products linked to in-vehicle telematics along with standard coverage.

Companies adopt new business and funding models to reduce operational costs and improve customer experience in the U.S. auto extended warranty market. Moreover, manufacturers play important role in providing auto extended warranty services with standard protocols for car sales in market. Auto extended warranties provide manufacturers potential to generate extra revenue through dealers and help in retaining customers by building harmonious relationship with them.

Furthermore, manufacturers increase their revenue from premiums by deducting payouts for extended warranties. Consequently, awareness for auto extended warranty, especially for used cars, increased among consumers and current technological advances, including blockchain technology led to innovation and new trends in the U.S. auto extended warranty industry.

Author Name(s) : Pradeep Ravi| Aarti Goswami | Onkar Sumant
Frequently Asked Questions?

The U.S. Auto Extended Warranty Market is anticipated to grow at a CAGR of 2.9% from 2021 to 2030.

The U.S. Auto Extended Warranty Market is projected to reach $24.48 billion by 2030.

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Rise in number of road accidents in the U.S. etc. boost the market growth.

The key players profiled in the report include AmTrust Financial, ASSURANT INC., AXA, and many more.

On the basis of top growing big corporations, we select top 10 players.

The U.S. Auto Extended Warranty Market is segmented on the basis of coverage, distribution channel, vehicle age, and application.

The key growth strategies of market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.

Stated Component Coverage segment will grow at a highest CAGR of 4.6% during the forecast period.

Personal segment will dominate the market during 2021 - 2030.

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U.S. Auto Extended Warranty Market

Opportunity Analysis and Industry Forecast, 2021-2030