UK Extended Warranties for New and Used Cars and LCVs: Market Dynamics, Affinities and Partnerships
is a report investigating the market for vehicle extended warranties in the UK. Key features include: an outline of market drivers and the value, growth and segmentation of the market from 2015 to 2019; quantification and commentary concerning the segmentation of policies in force by distribution channels used to buy them in 2019; estimates for underwriter and other provider market shares in 2019; a comprehensive listing of 50 affinity and partnership marketing relationships visible at the time of the research in 2019 for this type of cover; a review of the impact of insurtech and other technological innovation on this sector; and forecasts for the value of the market up to 2023.
In this report, extended warranties are defined as any extension to the manufacturer’s automatic factory warranty that is paid for separately by individual customers (including the self-employed) for new or used cars or LCVs. These include both extended warranties configured as insurance (sometimes referred to as mechanical breakdown insurance) and extended warranties established as service contracts wherein the distributor itself sometimes carries the financial risk associated with the product.
In the majority of cases, manufacturers’ factory warranties are for between two and three years on the main mechanical parts of a vehicle albeit some manufacturers have lengthened these to four, five, six or even seven years as a part of their marketing program. However, note that the figures about extended warranties in this report do not include 'free' extended warranties that are sometimes bundled with sales of used vehicles for a limited period of time and at no explicit additional cost to the customer.
In keeping with other studies in this series, research processes and sources used to create it include the following: primary interviews with leading brokers, underwriters and affinity / corporate partners active in this field; in-house data drawn from other Finaccord reports; and comprehensive analysis of secondary information from a diverse range of data sources including UK government departments and financial regulators, relevant lifestyle organisations and trade associations, specialist publications and published disclosures by competitors active in the market. Moreover, a further important input has been Finaccord’s survey of 100 vehicle dealerships and 46 car manufacturer brands.
For further information about this research, please access the table of contents and series prospectus by clicking on the corresponding links to the left-hand side of this page, or e-mail [email protected]