An extended warranty, often known as a service contract, is a type of warranty extending beyond the usual guarantee on various products and services. It is available for a wide range of products, including automobiles, electronics, electrical appliances, and mobile devices. Extended warranties cover mechanical and electrical components not covered by the manufacturer’s guarantee and often omit ordinary maintenance such as product wear and tear, re-gassing, standard maintenance, and damage caused by computer viruses, among other things.
· The rise of the extended warranty industry is fueled by the increased adoption of smartphones, computers, home appliances, and other similar consumer products.
· As a result, consumers frequently purchase extended warranties to ensure the safety of their electronic equipment after the seller’s warranty has expired. As a result, the market expansion is accelerated. However, worldwide, unit shipments of personal computers (PCs) have been declining, and as a result, demand for extended warranty insurance has decreased.
· On the other hand, developing economies provide considerable opportunities for insurers to grow their business by strengthening policies that encourage extended warranties throughout Asia-Pacific. Furthermore, extended warranty providers have several opportunities to provide consumers with value-added services and expand product and service offerings through partnerships. As a result, during the projection period, these elements are projected to generate attractive prospects.
· In 2019, the cars category dominated the extended warranty market, and this trend is expected to continue during the forecast period. Car manufacturers and dealers offer extended warranties at the time of purchase to earn and retain existing customers and preserve brand loyalty for their product offerings. Therefore the cost is included in the overall vehicle price. As a result, these factors contribute to the expansion of the vehicle service protection market.
· The extended warranty market analysis is the center of the report, which examines development potential, restraints, and trends. The study uses Porter’s five forces analysis to examine the impact of several aspects on the extended warranty market, including supplier bargaining power, competitor competitive intensity, the threat of new entrants, the threat of substitutes, and consumer bargaining power.
Analyze the segments
· Coverage, application, distribution channel, end-user, and geography are used to segment the extended warranty market. It is divided into two types of coverage: legal protection and accidental protection. Automobiles, consumer electronics, household appliances, mobile devices & PCs, and others are the different types of applications. It is divided into manufacturers, retailers, and others based on the distribution route. It is divided into two types of end-users: businesses and people. The market is divided into four regions: North America, Europe, Asia-Pacific, Latin America, and the Caribbean.
· The research examines the profiles of the market’s major competitors. ASSURANT, INC., AXA, AmTrust Financial, Asurion, American International Group, Inc. CARCHEX, CarShield, LLC, Endurance Warranty Services, LLC, Edel Assurance, and SquareTrade, Inc. are among the companies that offer warranty services. These companies have used various techniques to expand their market share and strengthen their positions in the extended warranty market.
· Impact analysis of COVID-19
· Because of the substantial drop in autos and consumer electronics sales, the COVID-19 epidemic has a moderate influence on the extended warranty business. Customers are, however, taking advantage of offers of warranty extension for products purchased through approved offline and online platforms since the lockdown in certain places has significantly hampered consumer travel and caused economic disruption around the world. As a result, one of the primary growth causes for the extended warranty industry is this. For example, in April 2020, JAGUAR LAND ROVER LIMITED announced a two-month or 3,200-kilometer warranty extension for its customers. Furthermore, between March 23 until the end of the shutdown, the corporation has paid careful regard to owners whose extended warranties are about to expire.
Top influencing factors
· Because many devices come with a heavy price tag at the time of purchase, knowledge of extended warranties for those devices has skyrocketed.
· Furthermore, because consumers are often concerned about the safety of their electronic equipment after the seller’s guarantee has expired, extended warranty coverage has increased in the consumer electronics and mobile devices category.
· Furthermore, people are becoming more aware of extended warranties, particularly for used cars. Current technological advances such as blockchain technology have led to innovations and new trends in the extended auto warranty sector. Furthermore, extending an extended warranty aids in the development of client loyalty.