Extended Warranty Market Size, Analysis Till 2030

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Table of Content

The global extended warranty market size accounted for USD 139.84 billion in 2022 and it is projected to attain around USD 294.7 billion by 2030, expanding at a CAGR of 9.77% between 2022 and 2030.

Market Overview:

The extended warranty market refers to the industry that provides extended warranty services for various consumer products. An extended warranty is a service contract or agreement offered by the manufacturer or a third-party provider that extends the warranty period of a product beyond the standard manufacturer's warranty. The extended warranty market has grown significantly over the years due to several factors. Firstly, as consumer electronics and appliances become more complex and expensive, consumers are increasingly looking for ways to protect their investments and minimize the risk of expensive repairs. Extended warranties offer peace of mind by providing coverage against unforeseen breakdowns or malfunctions beyond the standard warranty period.

Regional Snapshot:

North America dominated the market with the largest market size in 2022. The growth of the region is attributed to the increase in awareness of the expiration of the original warranty and taking the protection of their products by buying an extended warranty. The increasing prevalence of buying luxury products will tend to the higher demand of the extended warranty market.

North America, particularly the United States, has a well-established extended warranty market. The presence of a large consumer electronics and automotive industry, coupled with a high level of consumer awareness and disposable income, drives the demand for extended warranties.

The extended warranty market in Europe is also significant, with countries like Germany, the UK, and France leading the way. The region has a strong automotive industry, and extended warranties for vehicles play a crucial role. Additionally, the growing adoption of consumer electronics and appliances contributes to the market's expansion.

Asia-Pacific expected significant growth in the market with shared revenue in the forecast period. The growth of the market is attributed to the rising technological innovation in this region. The rising disposable income in the population and increase in lifestyle tends to buy the products for their daily needs and these will be expected to increase in the demand for the extended warranty market.

The Asia-Pacific region is witnessing rapid growth in the extended warranty market. Countries like China, Japan, South Korea, and India are major contributors to the market's growth. The region's increasing middle-class population and expanding consumer electronics market are key drivers for extended warranty services.

Extended Warranty Market Report Scope:

Report Highlights:

• By coverage type, the segment is further divided into the standard protection plan and the accidental protection plan. In which the accidental protection plan segment is expected to dominate the market with the highest share in the predicted period. The growth of the segment is attributed to the incidence of damage to the product, especially considering the automotive products, the rising accident cases will boost the growth of the segment while rising the demand for accidental protection plans.
• By distribution Channel, the segment is further divided into manufacturers, retailers, and others. The retail segment held a significant market share in 2022. The growth of the retail segment is due to the easy availability of the segment and customers. It is the easiest go-to place for an extension in warranty. 
• By application, the segment is further divided into automobiles, consumer electronics, mobile devices and PCs, home appliances, and others. The mobile devices segment dominated the market with the largest market share in 2022. The growing use of advanced smartphones all over the world is expected to grow the demand for the market in this segment.
• By region, North America dominated the market with the highest revenue share in 2022. The growth of the market is attributed to the rising penetration of technological innovations and gadgets expected to grow in demand for the market. 

Market Dynamics:

Driver: 

High-cost repairing services

The rising cost of repairs is a significant driver for extended warranties. Repairing high-end electronic devices, appliances, or vehicles can be expensive, and extended warranties help mitigate these costs by providing coverage for parts and labor.

Many consumers are using their devices and products for longer periods before upgrading, especially for big-ticket items like cars and appliances. Extended warranties offer additional coverage during these extended lifecycles, ensuring that the product remains protected over a longer period.

Restraint:

Overlapping coverages and price sensitivity

Extended warranties often come with an additional cost, which can make consumers price sensitive. Some customers who are price sensitive take the risk of potential repairs or replacements rather than pay for extended coverage, especially for lower-cost or less complex products. In certain cases, extended warranties may duplicate or overlap with existing warranties or consumer protection laws. Consumers may question the need for an extended warranty if they already have adequate coverage from the standard manufacturer's warranty or statutory rights.

Opportunity:

Penetration of customized warranty packages along with the availability of services on e-commerce platforms

Offering customizable warranty packages can be a significant opportunity for extended warranty providers. Consumers have different needs and preferences when it comes to warranty coverage. Providing options such as extended coverage duration, additional services, or coverage for specific components can attract a diverse range of customers.

The growth of e-commerce and online shopping provides an opportunity for extended warranty providers to reach a broader customer base. By offering easy online purchase options, transparent pricing, and streamlined claims processes, providers can enhance customer convenience and accessibility.

Challenge: Less awareness about the market

Consumers are not interested in the value-added services in underdeveloped countries. This is the main challenge in the growth of the extended warranty market. Many consumers are skeptical about the value and benefits of extended warranties. Some perceive them as unnecessary or consider them a way for companies to generate additional revenue. Limited awareness about the coverage and terms of extended warranties can also hinder market growth.

Recent Developments:

• In May 2023, the Nintendo Switch and the Switch (OLED Version) announced the launch of an extended warranty plan for limited time period. The companies have stated that the plans are only available in Mainland China. 
• In May 2023, Autoguard Warranties, the major provider of extended vehicle warranty started a new cover warranty plan, especially made for vintage and classic cars. The warranty offers the rightful advantages of older vehicles.

Major Key Players:

• Assurant, Inc.
• American International Group Inc.
• AXA
• AmTrust Financial Services
• Asurion
• CARCHEX, LLC
• CarShield LLC
• Endurance Warranty Services
• Edel Assurance, LLC
• SquareTrade Inc.

Market Segmentation:

By Coverage

• Standard Protection Plan
• Accidental Protection Plan

By Application

• Automobiles
• Consumer electronics
• Mobile devices & PCs
• Home appliances
• Others

By End User 

• Individual
• Business

By Distribution Channel 

• Manufacturers
• Retailer
• Others

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