LONDON, April 01, 2024 (GLOBE NEWSWIRE) -- As per The Business Research Company’s Auto Extended Warranty Global Market Report 2024, the auto extended warranty market has witnessed significant growth in recent years, with a strong increase from $30.65 billion in 2023 to an estimated $32.76 billion in 2024, representing a compound annual growth rate (CAGR) of 6.9%. This auto extended warranty market growth can be attributed to several factors, including the increasing longevity of vehicles, heightened consumer awareness, the complexity of modern vehicle systems, and the peace of mind provided by extended warranty coverage.
Anticipated Growth Trajectory
Forecasts indicate continued strong growth for the auto extended warranty market, with a projected valuation of $41.14 billion by 2028, boasting a CAGR of 5.9%. This auto extended warranty market growth in the forecast period is expected to be driven by factors such as escalating repair costs, intensified market competition, the introduction of customized warranty plans, and regulatory changes affecting the automotive industry.
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Emerging Trends and Market Dynamics
Major trends expected to shape the auto extended warranty market in the coming years include the integration of technology for streamlined claims processing, the rise of transferable warranty policies, the introduction of wear-and-tear coverage, a focus on enhanced customer support services, the development of comprehensive maintenance packages, and the integration of roadside assistance services.
Driving Force: Rising Repair Costs
One significant driver of auto extended warranty market growth is the escalating cost of vehicle repairs. As per data from the Federal Reserve Bank of Minneapolis, the cost of vehicle repairs surged by 17% in 2022. A survey revealed that approximately 34% of respondents expressed concerns about car repairs in the same year. Consequently, there is a growing demand for auto extended warranties to mitigate the financial burden associated with unexpected repair bills.
Key Players and Innovations
Leading companies operating in the auto extended warranty market, such as Industrial and Commercial Bank of China Limited, Axa S.A., and Allstate Insurance Company, are focusing on innovative offerings to drive revenue growth. For instance, Skoda Auto a.s. introduced an anytime warranty package in February 2023, providing customers with extended coverage for older vehicle models. Additionally, Reynolds and Reynolds Company's acquisition of American Guardian Warranty Services Inc. aims to streamline aftermarket auto warranty product sales for dealers.
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Regional Insights and Market Segmentation
North America emerged as the largest region in the auto extended warranty market in 2023, with Asia-Pacific expected to witness the fastest growth in the forecast period. The auto extended warranty market is segmented by product (powertrain warranty, component warranty, bumper-to-bumper warranty), vehicle age (new vehicle, used vehicle), distribution channel (auto dealers or manufacturers, third-party providers), and application (passenger vehicles, commercial vehicles).
The auto extended warranty market continues to expand rapidly, driven by factors such as rising repair costs and technological advancements. As major players innovate and adapt to evolving consumer needs, the market is poised for sustained growth, offering lucrative opportunities for stakeholders across the automotive industry.
Auto Extended Warranty Global Market Report 2024 by The Business Research Company provides insights on the auto extended warranty market size, auto extended warranty market segments, auto extended warranty market trends, drivers and restraints, major competitors’ market positioning, revenues and market shares.
The Business Research Company has published over 7,500+ industry reports, covering more than 2,500+ market segments and 60 geographies. The reports draw on 1,500,000 datasets, extensive secondary research, and exclusive insights from interviews with industry leaders.
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