According to a recent report published by Allied Market Research, titled “U.S. Auto Extended Warranty Market By Coverage, Distribution Channel, Vehicle Age, and Application: Opportunity Analysis and Industry Forecast, 2021-2030,” the U.S. auto extended warranty market is projected to reach $24.48 billion by 2030, growing at a compound annual growth rate of 2.9% from 2021 to 2030.
The market size was valued at $18.36 billion in 2020
The rise in the number of road accidents is one of the major drivers for market growth, according to a news release by Allied Analytics.
In addition, the rise in costly repair bills fuels the U.S. auto extended warranty market growth.
These factors increase the chances of unexpected failure of various components and systems of a car, including the engine, gearbox, electrics, steering, and suspension. This, in turn, increases repair bills.
However, these bills are not covered by the manufacturer’s warranty. Thus, to reduce operational and other expenses, vehicle owners adopt extended car warranty services, driving the growth of the market.
The decline in car sales is expected to negatively impact the growth of the market. On the contrary, the surge in innovative services offered by major auto extended warranty players in the U.S., and the rise in demand for endurance extended warranty coverage in automobiles, are expected to provide lucrative growth opportunities for the market in the future.
