April 24, 2024

Extended Warranty Market is in Trends by Growing Demand for Post-Purchase Services

The extended warranty market provides protection plans for electronics, appliances, vehicles and other products beyond the manufacturer warranty period. Extended warranty services offer repair and replacement of products when they breakdown due to normal usage after the original warranty expires.

The protection plans give customers peace of mind by covering the cost of unexpected repairs. Global Extended Warranty Market is estimated to be valued at US$ 140.2 Mn in 2024 and is expected to exhibit a CAGR of 6.6% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the extended warranty market include ASSURANT INC., American International Group, Inc., AXA, AmTrust Financial, Asurion, CARCHEX, CarShield LLC, Endurance Warranty Services LLC, Edel Assurance, SquareTrade, Inc., and Others. Key players provide customized protection plans for a variety of products and focus on brand awareness through marketing initiatives.

The growing demand for post-purchase services is fueling the extended warranty market. Customers want coverage for their high value purchases like vehicles, electronics and home appliances after the standard warranty expires. Protection plans give continued protection and value to the customer’s investment.

Global expansion strategies adopted by warranty providers is resulting in market growth. Key players partner with retailers worldwide to offer protection plans at the point of sale. The large players also acquire regional players to expand their international footprint and provide warranty services in new markets.

Market Key Trends

The increase in average selling price of consumer electronics and appliances is driving demand for extended warranties. Customers want coverage for expensive products and repair costs post the initial warranty period. This provides an opportunity for warranty providers to bundle protection plans along with high value item sales. Similarly, the rising vehicle repair and maintenance costs are contributing to the popularity of vehicle extended warranty or vehicle service contracts amongst drivers.

Porter’s Analysis
Threat of new entrants: Extended warranty market requires high initial capital investment and established distribution channels, limiting new entrants.

Bargaining power of buyers: Buyers have moderate bargaining power owing to availability of substitutes and standardized products across providers.

Bargaining power of suppliers: A few large providers such as manufacturers dominate the supply market, giving them strong bargaining power over other stakeholders.

Threat of new substitutes: New alternatives from insurtech companies pose a mild threat by offering personalized coverage at lower costs using advanced data analytics.

Competitive rivalry: Intense competition exists among the top warranty providers to capture greater market share through pricing strategies, branding and expanding service offerings.

Geographical Regions
North America dominates the Extended Warranty Market in terms of value, accounting for over 35% share in 2024 due to large installed base of consumer electronics and automobiles in United States and Canada.

The Asia Pacific region is expected to grow at the fastest pace during the forecast period driven by rising disposable income, growing consumer electronics sales and increasing vehicle ownership in China, India and other emerging countries.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it