Auto Extended Warranty Market Size was valued at USD 36.5 Billion in 2023. The Global Auto Extended Warranty Market industry is projected to grow from USD 38.7 Billion in 2024 to USD 59.0 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.20% during the forecast period (2024 - 2032). Increasing vehicle complexity and extending vehicle ownership periods are the key market drivers enhancing market growth.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Growing demand for vehicle production is predicted to drive the market CAGR for the auto extended warranty. Automotive refers to the design, development, manufacture, and maintenance of motor vehicles such as cars, trucks, motorbikes, and others. Auto extended warranties improve automobile production by boosting consumer confidence in purchasing vehicles, creating brand loyalty, and encouraging higher-quality manufacturing standards as manufacturers strive to reduce warranty claims and maintain long-term customer happiness. For instance, the European Automobile Manufacturers Association (ACEA), a Germany-based automobile manufacturers association, reported that 85.4 million motor vehicles were produced worldwide in 2022, a 5.7% increase over 2021. As a result, rising demand for vehicle production is fueling the expansion of the auto extended warranty industry.
Moreover, Flexible pricing schemes are significantly driving the auto extended warranty market's growth. The pricing strategy for auto extended warranties differs significantly from that of standard auto insurance. The auto extended warranty is based on historical data such as vehicle type, use, past claims, liability limits, and deductibles. Discounts on premiums in the auto extended warranty are supplied by combining various characteristics such as prior vehicle insurance providers, multi-carrier insurance, and automobile worth. Such policies make auto-extended warranties a highly flexible cost that can be assessed and paid annually, semiannually, or quarterly. The auto-extended warranty allows for the transfer of fixed expenditures to variable costs. It permits premiums to be calculated based on mileage and other rating parameters. It is a variable pricing model that allows for cost variations based on driving behavior, which can be observed via telematics. This pricing structure makes vehicle extended warranties more personalized and precise, which is projected to drive the Auto Extended Warranty Market throughout the forecast period.
The auto extended warranty industry is predicted to increase rapidly in the next years since it provides coverage for pricey parts and components of automobiles that are prone to damage. Nowadays, cars are outfitted with cutting-edge features that are rather pricey. As a result, when they fail, the repairs become fairly expensive in terms of mechanical breakdown, bumper blast, oil change, component repair or replacement, and other costs. According to AAA's 2019 poll, 60 billion Americans did not have enough savings to afford a large car repair expenditure of $600 or more.
In addition, another AAA poll revealed that over 30 billion consumers delayed or neglected basic car maintenance, potentially leading to costly breakdowns and repairs. For instance, while the typical car repair bill is around $600, a fuel pump repair can cost between $900 and $2,000, and a gearbox repair can cost between $3,000 and $5,000. Repairs to the engine control unit might also cost thousands of dollars. As a result, rising repair costs fuel the expansion of the auto extended warranty market. Thus, driving the Auto Extended Warranty Market revenue.
The Auto Extended Warranty Market segmentation, based on Coverages, includes Powertrain Coverage, Stated Component Coverage, and Exclusionary Coverage. The exclusionary coverage segment is estimated to hold an important portion of the market in 2023 because it provides the most comprehensive level of security.
Figure 1: Auto Extended Warranty Market, by Coverage, 2023 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
The Auto Extended Warranty Market segmentation based on Distribution Channels includes Auto Dealers/Manufacturers And Third-Party Providers. The Auto Dealers/Manufacturers sector had the largest market share in 2023, accounting for over half of global extended warranty revenue. This is attributable to manufacturers offering aftermarket goods and extended warranties that cover specific parts or types of problems. Furthermore, in the manufacturer distribution channel, extended warranties cover the repair of consumer durable products, the cost of replacement, and other faults caused by a manufacturing flaw or bad workmanship.
New and Used Vehicles are included in the Auto Extended Warranty Market split by Vehicle Age. The worldwide auto extended warranty market was dominated by the used vehicle category in 2023. During the projection period, a strong increase in the New Vehicle category is anticipated. This is because new car purchasers are becoming more aware of the advantages of extended warranties, longer loan terms that force vehicles to be out of the manufacturer's warranty for longer periods of time, and the growing complexity and maintenance expenses of automobiles are all contributing factors.
The Auto Extended Warranty Market is divided into Applications, Personal And Commercial. During the projected period, the personal sector will dominate the growth of the auto extended warranty market. Vendors in the target market provide extended auto warranty programs, which include extended service plans, mobile insurance, and protection plans for a variety of organizations, including retailers and manufacturers. Furthermore, as more people purchase cars around the world, the need for extended warranties grows. As a result of the aforementioned factors, the personal segment is likely to drive growth in the worldwide auto extended warranty market throughout the forecast period.
By region, the study provides the market insights into North America, Europe, Asia-Pacific and the Rest of the World. North America dominated the market, with a 45.80% revenue share in 2023. This is due to the emergence of complicated and sophisticated consumer products, as well as increased consumer awareness of the durability and dependability of their high-value purchases. Furthermore, the strong presence of government authorities and regulatory organizations working to improve consumer protection services is helping to drive market expansion in the region.
Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, and South Korea.
Figure 2: Auto Extended Warranty Market Share By Region 2023 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe Auto Extended Warranty Market accounts for the second-largest market share. This is because consumers in the region obtain extended auto warranties and service contracts (EWSCs) from various parties like manufacturers, marketers of goods, and third-party insurance. Further, the German Auto Extended Warranty Market held the largest market share, and the UK Auto Extended Warranty Market was the fastest-growing market in the European region.
The Asia-Pacific Auto Extended Warranty Market is expected to grow at the fastest CAGR from 2024 to 2032. This is due to its rising economies, high cost of repairs, numerous offers and perks, and superior customer experience provided by auto extended warranties. Moreover, China’s Auto Extended Warranty Market held the largest market share, and the Indian Auto Extended Warranty Market was the fastest-growing market in the Asia-Pacific region.
Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Auto Extended Warranty Market grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the Auto Extended Warranty industry must offer cost-effective items.
Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Auto Extended Warranty industry to benefit clients and increase the market sector. In recent years, the Auto Extended Warranty industry has offered some of the most significant advantages to medicine. Major players in the Auto Extended Warranty Market, including OLIVE, AAA WARRANTY SERVICES, TATA MOTORS LIMITED, ASSURANT, and others, are attempting to increase market demand by investing in research and development operations.
Hyundai Motor Company is a South Korean multinational car manufacturer based in Seoul, South Korea, that was formed in 1967. Currently, the firm controls 33.88 percent of Kia Corporation and entirely owns two brands: Genesis, its luxury automotive subsidiary, and Ioniq, its electric vehicle brand. The Hyundai Motor Group consists of three brands. In July 2022, Hyundai India launched a 6-/7-year extended warranty package for all Hyundai vehicles. This extended warranty will also apply to cars that are already on the market.
CARCHEX is a Baltimore, Maryland-based company that offers extended auto warranties and mobile vehicle inspections. CARCHEX was established in 1999 as a provider of pre-purchase automobile examinations. Jason Goldsmith, a Baltimore-based entrepreneur and TheLoanPage.com founder, purchased the company in 2003. Shortly after, CARCHEX expanded its car inspection service to all 50 states by forming a national network of ASE-certified mechanics. In 2019, CARCHEX announced a relationship with Mothers Against Drunk Driving (MADD). As part of the cooperation, CARCHEX provided $20,000 to the group to assist in reducing underage drinking and drunk driving.
In July 2023, Tata revealed intentions to invest £4 billion in the UK to establish an electric car battery facility, one of Europe's largest. The factory will be the company's first battery production facility outside of India.[46] The plant, located in Bridgwater, Somerset, will supply Jaguar Land Rover's future battery-electric models, including the Range Rover, Defender, Discovery, and Jaguar brands, as well as other automobile manufacturers. Production at the new facility is scheduled to begin in 2026.
In June 2023, Axa Investment Managers paid €150 million for France's Bry-sur-Marne film studio and the 12-hectare block of land it sits on.
| Report Attribute/Metric | Details |
| Market Size 2023 | USD 36.5 Billion |
| Market Size 2024 | USD 38.7 Billion |
| Market Size 2032 | USD 59.0 Billion |
| Compound Annual Growth Rate (CAGR) | 6.20% (2024-2032) |
| Base Year | 2023 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2019- 2022 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Coverage, Distribution Channel, Vehicle Age, Application, and Region |
| Geographies Covered | North America, Europe, Asia Pacific, and the Rest of the World |
| Countries Covered | The US, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea |
| Key Companies Profiled | OLIVE, AAA WARRANTY SERVICES, TATA MOTORS LIMITED, ASSURANT, INC., ENDURANCE WARRANTY SERVICES, LLC, AXA, CARCHEX, CONCORD AUTO PROTECT, CARSHIELD, LLC, AMTRUST FINANCIAL |
| Key Market Opportunities | Implementation of technologies into existing product and service lines. |
| Key Market Dynamics | Rise in the number of costly repair bills. |
Frequently Asked Questions (FAQ) :
The Auto Extended Warranty Market size was valued at USD 36.5 Billion in 2023.
The global market is projected to grow at a CAGR of 6.20% from 2024 to 2032.
The key players in the market are OLIVE, AAA WARRANTY SERVICES, TATA MOTORS LIMITED, and ASSURANT, among others.
The Used Vehicle category dominated the market in 2023.
The Auto Dealers/Manufacturers category had the largest share of the global market.
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