Automotive Extended Warranty Market By Coverage (Powertrain Coverage, Stated Component Coverage, and Exclusionary Coverage), By Vehicle Age (New Vehicle, Used Vehicle), By Distribution Channel (Auto Dealers/Manufacturers, and Third-Party Providers), By Application (Personal, Commercial) and Region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa) - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast 2022 – 2030
Automotive Extended Warranty Market Outlook
The global automotive extended warranty market size was valued at USD 49.18 Billion in 2021 and is expected to reach USD 78.19 Billion in 2030, expanding at a CAGR of 5.4% during the forecast period.
The overall incremental opportunity is estimated to be USD 29.01 Billion from 2022 to 2030. An automotive extended warranty, also known as a service contract, is a type of protection plan that covers the cost of repairs or replacement of certain parts and systems in a vehicle after the manufacturer's warranty has expired.
Automotive Extended Warranty Market Dynamics
Increasing vehicle sales
The number of vehicles that require repairs or maintenance is increasing with the growing number of car sales, thus driving the market for extended automotive warranties. In 2021, approximately 82.6 Million vehicles were sold compared to 78.7 Million in 2020. These vehicles included 56.3 Million passenger cars and 26.2 Million commercial vehicles.
Furthermore, car manufacturers offer extended warranties with comprehensive coverage options to compete for market share. This can lead to an increase in the availability and variety of automotive extended warranties in the market. Thus, increased competition among car manufacturers, providing extended warranties, is boosting the market.
Limited OEM warranty period
The limitations of the manufacturer warranty, as well as financial protection against unexpected repair costs among consumers is driving the extended warranty market sales. The limited warranty offered by automobile manufacturers typically covers the repair or replacement of certain parts or components of the vehicles for a certain period of time or mileage, usually ranging from 3 to 5 years or 36,000 to 60,000 miles.
Once the limited warranty expires, the vehicle owner is responsible for the repair or maintenance costs. This limited coverage period is not enough to cover all the potential repair costs that arise during the lifetime of the vehicle. This leads to the need for an extended warranty, which covers repairs to major components, such as the engine, transmission, and other electric systems, as well as other parts and systems that are not covered under the manufacturer’s warranty.
Rising awareness among the young population
Rising consumer awareness, especially among the young population, is playing a significant role in driving the global automotive extended warranty market. Young consumers are becoming more knowledgeable about the potential costs and risks associated with owning a vehicle. With the increasing complexity of modern cars and the rising cost of repairs and maintenance, consumers are looking for ways to protect themselves from unexpected expenses.
Furthermore, the young generation is likely to use more technology to research and purchase products, including automotive extended warranties. They use online platforms to compare and differentiate the available options, read reviews, and make informed decisions.
Additionally, young consumers are likely to keep their vehicles for a long period of time, which means that they are expected to encounter issues with the increasing age of their vehicles. These factors are boosting the market demand among the young population.
High cost associated with extended warranty
One of the primary restraints of the automotive extended warranty market is the cost of these warranties. Extended warranties are expensive, which is expected to be a significant deterrent for customers. The cost of an extended warranty is usually a significant percentage of the vehicle’s total value and the additional cost of the vehicle purchase.
This is expected to lead to decreased demand for extended warranties. Furthermore, extended warranties do not cover certain types of repairs or have certain exclusions that limit their usefulness. This can lead to customer dissatisfaction and a decrease in demand for extended warranties, which further restrains the automotive extended warranty market
Regulations Governing Warranty
The automotive extended warranty market is subject to regulations that add costs and complexity for providers. Compliance with these regulations also limits the types of products and services that the providers offer. For instance, in the US, many state insurance commissioners regulate extended warranties as service contracts.
The regulatory structure necessitates warranty provider licensure or registration, financial solvency regulation, and service contract consumer disclosures. Service warranty providers apply for licensure or registration and then sell their products, typically at the point of sale. Vehicle service contracts are a type of extended warranty that is typically regulated by the states as insurance in the US. The regulations vary from state to state, and many states have adopted a ‘Service Contract Model Act’ to reduce the complications.
Advancements in warranty technology
The advancements in warranty technology are likely to create lucrative opportunities for the automotive extended warranty market in the coming years. These advancements in warranty technology include the use of GPS, blockchain, big data, and predictive analytics. Predictive analytics algorithms analyze vast amounts of data to identify patterns that indicate potential failures or issues with a vehicle. This allows manufacturers and warranty providers to proactively address issues before they become major problems, reduce the number of claims and improve customer satisfaction.
Artificial Intelligence (AI) is another technology that is expected to have a significant impact on the automotive extended warranty market. AI algorithms are used to analyze data from various sources, including telematics devices, repair records, and customer feedback, to identify patterns and make predictions about potential issues with a vehicle.
This helps warranty providers to offer additional targeted coverage options and improve customer satisfaction by reducing the number of unexpected repairs. These factors are expected to help the market in gaining significant momentum in the near future, which in turn, is anticipated to boost the market during the forecast period.
Scope of Automotive Extended Warranty Market Report
The report on the global automotive extended warranty market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
Attributes |
Details |
Report Title |
Automotive Extended Warranty Market – Global Industry Analysis, Size, Volume, Share, Growth, Trends, and Forecast |
Base Year |
2021 |
Historic Data |
2015-2020 |
Forecast Period |
2022–2030 |
Segmentation |
Coverage (Powertrain Coverage, Stated Component Coverage, Exclusionary Coverage), Vehicle Age (New Vehicle, Used Vehicle), Distribution Channel (Auto Dealers/Manufacturers, and Third-Party Providers), Application (Personal, Commercial) |
Regional Scope |
North America, Europe, Asia Pacific, Latin America, and Middle East & Africa |
Report Coverage |
Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast |
Key Players Covered |
Volkswagen AG, Honda Motor Co., Ltd, General Motors, Tata Motors, AmTrust Financial, Toyota Motor Corporation, AXA Partners Holding SA, CarShield, Protect My Car, Endurance Warranty Services, LLC, Toco Warranty Corp, Concord Auto Protect, Auto Advantage Inc., CARCHEX, AAA Warranty Services, AutoCon (India) Assistance & Administration Private Limited |
Automotive Extended Warranty Market Segment Insights
The global automotive extended warranty market is segmented based on coverage, vehicle age, distribution channel, application, and regions.
In terms of coverage, the automotive extended warranty market is segmented into powertrain coverage, stated component coverage, and exclusionary coverage. The PACAS exclusionary coverage segment is projected to hold a substantial share of the market in 2021, due to the highest level of protection offered by it.
Based on the vehicle age, the automotive extended warranty market is segmented into new vehicle, used vehicle. The used vehicle segment is projected to hold a substantial share of the market in 2021, owing to the protection provided by it against unexpected repair cost.
Regional Analysis
Based on regions, the automotive extended warranty market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The market in the Asia Pacific is projected to expand at a significant CAGR during the forecast period. The region is expected to continue its dominance in the coming years, owing to the increasing investment by the players.
Key Benefits for Industry Participants & Stakeholders
- In-depth Analysis of the Global automotive extended warranty market
- Historical, Current and Projected Market Size in terms of Value and Volume
- Potential & Niche Segments and Regions Exhibiting Promising Growth Covered
- Industry Drivers, Restraints and Opportunities Covered in the Study
- Recent Industry Trends and Developments
- Competitive Landscape & Strategies of Key Players
- Neutral Perspective on Global automotive extended warranty market Performance
Chapter 2 Assumptions and Acronyms Used
Chapter 3 Research Methodology
Chapter 4 Automotive extended warranty Market Overview
4.1 Introduction
4.1.1 Market Taxonomy
4.1.2 Market Definition
4.1.3 Macro-Economic Factors Impacting the Market Growth
4.2 Automotive extended warranty Market Dynamics
4.2.1 Market Drivers
4.2.2 Market Restraints
4.2.3 Market Opportunity
4.3 Automotive extended warranty Market - Supply Chain Analysis
4.3.1 List of Key Suppliers
4.3.2 List of Key Distributors
4.3.3 List of Key Consumers
4.4 Key Forces Shaping the Automotive extended warranty Market
4.4.1 Bargaining Power of Suppliers
4.4.2 Bargaining Power of Buyers
4.4.3 Threat of Substitution
4.4.4 Threat of New Entrants
4.4.5 Competitive Rivalry
4.5 Global Automotive extended warranty Market Size & Forecast, 2016-2031
4.5.1 Automotive extended warranty Market Size and Y-o-Y Growth
4.5.2 Automotive extended warranty Market Absolute $ Opportunity
Chapter 5 Global Automotive extended warranty Market Analysis and Forecast By Coverage
5.1 Introduction
5.1.1 Key Market Trends & Growth Opportunities By Coverage
5.1.2 Basis Point Share (BPS) Analysis By Coverage
5.1.3 Absolute $ Opportunity Assessment By Coverage
5.2 Automotive extended warranty Market Size Forecast By Coverage
5.2.1 Powertrain Coverage
5.2.2 Stated Component Coverage
5.2.3 Exclusionary Coverage
5.3 Market Attractiveness Analysis By Coverage
Chapter 6 Global Automotive extended warranty Market Analysis and Forecast By Vehicle Age
6.1 Introduction
6.1.1 Key Market Trends & Growth Opportunities By Vehicle Age
6.1.2 Basis Point Share (BPS) Analysis By Vehicle Age
6.1.3 Absolute $ Opportunity Assessment By Vehicle Age
6.2 Automotive extended warranty Market Size Forecast By Vehicle Age
6.2.1 New Vehicle
6.2.2 Used Vehicle
6.3 Market Attractiveness Analysis By Vehicle Age
Chapter 7 Global Automotive extended warranty Market Analysis and Forecast By Distribution Channel
7.1 Introduction
7.1.1 Key Market Trends & Growth Opportunities By Distribution Channel
7.1.2 Basis Point Share (BPS) Analysis By Distribution Channel
7.1.3 Absolute $ Opportunity Assessment By Distribution Channel
7.2 Automotive extended warranty Market Size Forecast By Distribution Channel
7.2.1 Auto Dealers/Manufacturers
7.2.2 Third-Party Providers.
7.3 Market Attractiveness Analysis By Distribution Channel
Chapter 8 Global Automotive extended warranty Market Analysis and Forecast By Application
8.1 Introduction
8.1.1 Key Market Trends & Growth Opportunities By Application
8.1.2 Basis Point Share (BPS) Analysis By Application
8.1.3 Absolute $ Opportunity Assessment By Application
8.2 Automotive extended warranty Market Size Forecast By Application
8.2.1 Personal
8.2.2 Commercial
8.3 Market Attractiveness Analysis By Application
Chapter 9 Global Automotive extended warranty Market Analysis and Forecast by Region
9.1 Introduction
9.1.1 Key Market Trends & Growth Opportunities by Region
9.1.2 Basis Point Share (BPS) Analysis by Region
9.1.3 Absolute $ Opportunity Assessment by Region
9.2 Automotive extended warranty Market Size Forecast by Region
9.2.1 North America
9.2.2 Europe
9.2.3 Asia Pacific
9.2.4 Latin America
9.2.5 Middle East & Africa (MEA)
9.3 Market Attractiveness Analysis by Region
Chapter 10 Coronavirus Disease (COVID-19) Impact
10.1 Introduction
10.2 Current & Future Impact Analysis
10.3 Economic Impact Analysis
10.4 Government Policies
10.5 Investment Scenario
Chapter 11 North America Automotive extended warranty Analysis and Forecast
11.1 Introduction
11.2 North America Automotive extended warranty Market Size Forecast by Country
11.2.1 U.S.
11.2.2 Canada
11.3 Basis Point Share (BPS) Analysis by Country
11.4 Absolute $ Opportunity Assessment by Country
11.5 Market Attractiveness Analysis by Country
11.6 North America Automotive extended warranty Market Size Forecast By Coverage
11.6.1 Powertrain Coverage
11.6.2 Stated Component Coverage
11.6.3 Exclusionary Coverage
11.7 Basis Point Share (BPS) Analysis By Coverage
11.8 Absolute $ Opportunity Assessment By Coverage
11.9 Market Attractiveness Analysis By Coverage
11.10 North America Automotive extended warranty Market Size Forecast By Vehicle Age
11.10.1 New Vehicle
11.10.2 Used Vehicle
11.11 Basis Point Share (BPS) Analysis By Vehicle Age
11.12 Absolute $ Opportunity Assessment By Vehicle Age
11.13 Market Attractiveness Analysis By Vehicle Age
11.14 North America Automotive extended warranty Market Size Forecast By Distribution Channel
11.14.1 Auto Dealers/Manufacturers
11.14.2 Third-Party Providers.
11.15 Basis Point Share (BPS) Analysis By Distribution Channel
11.16 Absolute $ Opportunity Assessment By Distribution Channel
11.17 Market Attractiveness Analysis By Distribution Channel
11.18 North America Automotive extended warranty Market Size Forecast By Application
11.18.1 Personal
11.18.2 Commercial
11.19 Basis Point Share (BPS) Analysis By Application
11.20 Absolute $ Opportunity Assessment By Application
11.21 Market Attractiveness Analysis By Application
Chapter 12 Europe Automotive extended warranty Analysis and Forecast
12.1 Introduction
12.2 Europe Automotive extended warranty Market Size Forecast by Country
12.2.1 Germany
12.2.2 France
12.2.3 Italy
12.2.4 U.K.
12.2.5 Spain
12.2.6 Russia
12.2.7 Rest of Europe
12.3 Basis Point Share (BPS) Analysis by Country
12.4 Absolute $ Opportunity Assessment by Country
12.5 Market Attractiveness Analysis by Country
12.6 Europe Automotive extended warranty Market Size Forecast By Coverage
12.6.1 Powertrain Coverage
12.6.2 Stated Component Coverage
12.6.3 Exclusionary Coverage
12.7 Basis Point Share (BPS) Analysis By Coverage
12.8 Absolute $ Opportunity Assessment By Coverage
12.9 Market Attractiveness Analysis By Coverage
12.10 Europe Automotive extended warranty Market Size Forecast By Vehicle Age
12.10.1 New Vehicle
12.10.2 Used Vehicle
12.11 Basis Point Share (BPS) Analysis By Vehicle Age
12.12 Absolute $ Opportunity Assessment By Vehicle Age
12.13 Market Attractiveness Analysis By Vehicle Age
12.14 Europe Automotive extended warranty Market Size Forecast By Distribution Channel
12.14.1 Auto Dealers/Manufacturers
12.14.2 Third-Party Providers.
12.15 Basis Point Share (BPS) Analysis By Distribution Channel
12.16 Absolute $ Opportunity Assessment By Distribution Channel
12.17 Market Attractiveness Analysis By Distribution Channel
12.18 Europe Automotive extended warranty Market Size Forecast By Application
12.18.1 Personal
12.18.2 Commercial
12.19 Basis Point Share (BPS) Analysis By Application
12.20 Absolute $ Opportunity Assessment By Application
12.21 Market Attractiveness Analysis By Application
Chapter 13 Asia Pacific Automotive extended warranty Analysis and Forecast
13.1 Introduction
13.2 Asia Pacific Automotive extended warranty Market Size Forecast by Country
13.2.1 China
13.2.2 Japan
13.2.3 South Korea
13.2.4 India
13.2.5 Australia
13.2.6 South East Asia (SEA)
13.2.7 Rest of Asia Pacific (APAC)
13.3 Basis Point Share (BPS) Analysis by Country
13.4 Absolute $ Opportunity Assessment by Country
13.5 Market Attractiveness Analysis by Country
13.6 Asia Pacific Automotive extended warranty Market Size Forecast By Coverage
13.6.1 Powertrain Coverage
13.6.2 Stated Component Coverage
13.6.3 Exclusionary Coverage
13.7 Basis Point Share (BPS) Analysis By Coverage
13.8 Absolute $ Opportunity Assessment By Coverage
13.9 Market Attractiveness Analysis By Coverage
13.10 Asia Pacific Automotive extended warranty Market Size Forecast By Vehicle Age
13.10.1 New Vehicle
13.10.2 Used Vehicle
13.11 Basis Point Share (BPS) Analysis By Vehicle Age
13.12 Absolute $ Opportunity Assessment By Vehicle Age
13.13 Market Attractiveness Analysis By Vehicle Age
13.14 Asia Pacific Automotive extended warranty Market Size Forecast By Distribution Channel
13.14.1 Auto Dealers/Manufacturers
13.14.2 Third-Party Providers.
13.15 Basis Point Share (BPS) Analysis By Distribution Channel
13.16 Absolute $ Opportunity Assessment By Distribution Channel
13.17 Market Attractiveness Analysis By Distribution Channel
13.18 Asia Pacific Automotive extended warranty Market Size Forecast By Application
13.18.1 Personal
13.18.2 Commercial
13.19 Basis Point Share (BPS) Analysis By Application
13.20 Absolute $ Opportunity Assessment By Application
13.21 Market Attractiveness Analysis By Application
Chapter 14 Latin America Automotive extended warranty Analysis and Forecast
14.1 Introduction
14.2 Latin America Automotive extended warranty Market Size Forecast by Country
14.2.1 Brazil
14.2.2 Mexico
14.2.3 Rest of Latin America (LATAM)
14.3 Basis Point Share (BPS) Analysis by Country
14.4 Absolute $ Opportunity Assessment by Country
14.5 Market Attractiveness Analysis by Country
14.6 Latin America Automotive extended warranty Market Size Forecast By Coverage
14.6.1 Powertrain Coverage
14.6.2 Stated Component Coverage
14.6.3 Exclusionary Coverage
14.7 Basis Point Share (BPS) Analysis By Coverage
14.8 Absolute $ Opportunity Assessment By Coverage
14.9 Market Attractiveness Analysis By Coverage
14.10 Latin America Automotive extended warranty Market Size Forecast By Vehicle Age
14.10.1 New Vehicle
14.10.2 Used Vehicle
14.11 Basis Point Share (BPS) Analysis By Vehicle Age
14.12 Absolute $ Opportunity Assessment By Vehicle Age
14.13 Market Attractiveness Analysis By Vehicle Age
14.14 Latin America Automotive extended warranty Market Size Forecast By Distribution Channel
14.14.1 Auto Dealers/Manufacturers
14.14.2 Third-Party Providers.
14.15 Basis Point Share (BPS) Analysis By Distribution Channel
14.16 Absolute $ Opportunity Assessment By Distribution Channel
14.17 Market Attractiveness Analysis By Distribution Channel
14.18 Latin America Automotive extended warranty Market Size Forecast By Application
14.18.1 Personal
14.18.2 Commercial
14.19 Basis Point Share (BPS) Analysis By Application
14.20 Absolute $ Opportunity Assessment By Application
14.21 Market Attractiveness Analysis By Application
Chapter 15 Middle East & Africa (MEA) Automotive extended warranty Analysis and Forecast
15.1 Introduction
15.2 Middle East & Africa (MEA) Automotive extended warranty Market Size Forecast by Country
15.2.1 Saudi Arabia
15.2.2 South Africa
15.2.3 UAE
15.2.4 Rest of Middle East & Africa (MEA)
15.3 Basis Point Share (BPS) Analysis by Country
15.4 Absolute $ Opportunity Assessment by Country
15.5 Market Attractiveness Analysis by Country
15.6 Middle East & Africa (MEA) Automotive extended warranty Market Size Forecast By Coverage
15.6.1 Powertrain Coverage
15.6.2 Stated Component Coverage
15.6.3 Exclusionary Coverage
15.7 Basis Point Share (BPS) Analysis By Coverage
15.8 Absolute $ Opportunity Assessment By Coverage
15.9 Market Attractiveness Analysis By Coverage
15.10 Middle East & Africa (MEA) Automotive extended warranty Market Size Forecast By Vehicle Age
15.10.1 New Vehicle
15.10.2 Used Vehicle
15.11 Basis Point Share (BPS) Analysis By Vehicle Age
15.12 Absolute $ Opportunity Assessment By Vehicle Age
15.13 Market Attractiveness Analysis By Vehicle Age
15.14 Middle East & Africa (MEA) Automotive extended warranty Market Size Forecast By Distribution Channel
15.14.1 Auto Dealers/Manufacturers
15.14.2 Third-Party Providers.
15.15 Basis Point Share (BPS) Analysis By Distribution Channel
15.16 Absolute $ Opportunity Assessment By Distribution Channel
15.17 Market Attractiveness Analysis By Distribution Channel
15.18 Middle East & Africa (MEA) Automotive extended warranty Market Size Forecast By Application
15.18.1 Personal
15.18.2 Commercial
15.19 Basis Point Share (BPS) Analysis By Application
15.20 Absolute $ Opportunity Assessment By Application
15.21 Market Attractiveness Analysis By Application
Chapter 16 Competition Landscape
16.1 Automotive extended warranty Market: Competitive Dashboard
16.2 Global Automotive extended warranty Market: Market Share Analysis, 2022
16.3 Company Profiles (Details – Overview, Financials, Developments, Strategy)
16.3.1 Volkswagen AG
16.3.2 Honda Motor Co., Ltd
16.3.3 General Motors
16.3.4 TATA Motors
16.3.5 AmTrust Financial
16.3.6 Toyota Motor Corporation
16.3.7 AXA Partners Holding SA
16.3.8 CarShield
16.3.9 Protect My Car
16.3.10 Endurance Warranty Services, LLC
16.3.11 Toco Warranty Corp
16.3.12 Concord Auto Protect
16.3.13 Auto Advantage Inc.
16.3.14 CARCHEX
16.3.15 AAA Warranty Services
16.3.16 AutoCon (India) Assistance & Administration Private Limited