Extended Warranty Market Size, Share, Growth, and Industry Analysis, By Type (Standard Protection Plan and Accidental Protection Plan), By Application (Laptops and PCs, Mobile Devices, Wearables, and Others) and Regional Forecast to 2032

EXTENDED WARRANTY MARKET REPORT OVERVIEW

The global extended warranty market size was USD 106740 million in 2022 and the market is projected to touch USD 189148.5 million by 2032, exhibiting a CAGR of 5.9% during the forecast period.

Extended warranties offer consumers additional coverage beyond the standard manufacturer warranty, providing peace of mind and protection against unexpected repair costs. These warranties typically extend the duration of coverage for a specified period, often covering mechanical and electrical failures that may occur after the expiration of the original warranty. Extended warranties are available for various products, including electronics, appliances, vehicles, and home systems, allowing consumers to safeguard their investments and prolong the lifespan of their purchases.

While extended warranties can offer valuable protection, consumers should carefully consider factors such as the cost of the warranty, the likelihood of needing repairs, and the terms and conditions of coverage before making a decision. Some extended warranties may have limitations, exclusions, and deductibles that impact their overall value, and consumers should weigh these factors against the potential benefits of extended coverage. Additionally, consumers should assess whether the coverage provided by an extended warranty duplicates existing protections, such as consumer rights under applicable laws or coverage provided by credit card issuers. 

COVID-19 Impact: Market Growth Boosted by Pandemic due to Increased Demand for Electronics and Appliances

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to market’s growth and demand returning to pre-pandemic levels.

Economic uncertainty and job losses during the pandemic may have influenced consumer spending priorities, with some individuals prioritizing essential expenses over optional purchases such as extended warranties. This shift in consumer behavior may have resulted in decreased demand for extended warranties, particularly for non-essential or high-ticket items. Extended warranty providers and service centers faced operational challenges during the pandemic, including workforce shortages, safety protocols, and restrictions on in-home services. These challenges may have affected the availability and quality of repair services, impacting consumer perceptions of the value of extended warranties.

With people spending more time at home due to lockdowns and remote work arrangements, there was a surge in demand for electronics, appliances, and home entertainment products. This increased demand may have led to higher sales of extended warranties as consumers sought additional protection for their valuable purchases. The global extended warranty market growth is anticipated to boost following the pandemic.

LATEST TRENDS

"Flexible Coverage Options to Drive Market Growth"

To cater to diverse consumer preferences and product categories, extended warranty providers are offering more customized and flexible coverage options. This includes tiered coverage plans with varying levels of protection, as well as the ability for consumers to select specific coverage terms, deductibles, and add-on services tailored to their needs. By providing more personalized warranty solutions, providers can enhance customer satisfaction and improve the perceived value of extended warranties.

Some manufacturers and retailers are integrating extended warranty offerings more closely with their product ecosystems. For example, warranty options may be presented at the point of sale, integrated into product registration processes, or bundled with other value-added services such as product support and maintenance. This integration not only simplifies the purchasing process for consumers but also strengthens brand loyalty and encourages repeat purchases by fostering a seamless ownership experience.

EXTENDED WARRANTY MARKET SEGMENTATION

By Type

Based on type the global market can be categorized into Standard Protection Plan and Accidental Protection Plan. 

• Standard Protection Plan: This type of protection plan typically covers defects in materials and workmanship, providing repairs or replacements for covered products within a specified period. Standard protection plans offer peace of mind to consumers by safeguarding their purchases against unexpected mechanical or electrical failures, ensuring product longevity and reliability.

• Accidental Protection Plan: Accidental protection plans extend coverage beyond defects to include accidental damage from drops, spills, and other mishaps. These plans offer comprehensive protection for covered products, reimbursing consumers for repair costs or providing replacements in the event of accidental damage, enhancing confidence and security in ownership. 

By Application

Based on application the global market can be categorized into Laptops and PCs, Mobile Devices, Wearables, and Others.

• Laptops and PCs: Laptops and PCs are computing devices designed for personal or professional use, offering features such as processing power, storage capacity, and connectivity options. These devices serve diverse purposes, from productivity and gaming to multimedia entertainment, and are essential tools for work, education, and entertainment in today's digital age.

• Mobile Devices: Mobile devices, including smartphones and tablets, provide users with portable access to communication, information, and entertainment services. With features such as touchscreens, mobile apps, and internet connectivity, these devices facilitate on-the-go productivity, social networking, and multimedia consumption, shaping the way people interact, work, and stay connected in an increasingly mobile-centric world.

• Wearables: Wearable devices, such as smartwatches, fitness trackers, and augmented reality glasses, offer users personalized and interactive experiences for health monitoring, activity tracking, and information display. These devices integrate sensors, connectivity, and user interfaces into compact and stylish form factors, enabling users to stay informed, motivated, and connected while on the move.

DRIVING FACTORS

"Product Longevity to Boost the Market"

Consumers often invest in extended warranties to prolong the lifespan of their purchases and ensure continued functionality over an extended period. Extended warranty coverage can incentivize consumers to keep their products well-maintained and seek timely repairs, thereby maximizing the value and utility of their investments. Extended warranties serve as a form of risk mitigation for both consumers and retailers by transferring the financial burden of repairs or replacements to the warranty provider. By paying a relatively small upfront fee for extended coverage, consumers protect themselves against the potentially high costs of future repairs, reducing uncertainty and financial exposure.

"Extended Coverage Options to Expand the Market"

The availability of customizable and flexible coverage options enhances the attractiveness of extended warranties to consumers. With tiered coverage plans, add-on services, and customizable terms, consumers can tailor their warranty coverage to suit their specific needs, preferences, and budget constraints, thereby increasing the perceived value proposition of extended warranties. The perceived value of extended warranties influences consumer purchasing decisions, especially for high-ticket items or products with a reputation for reliability issues. Consumers may be more inclined to invest in extended warranty coverage for products with perceived higher risk or uncertainty, such as electronics, appliances, or vehicles, to safeguard their investments and protect against potential future expenses.

RESTRAINING FACTOR

"Limited Coverage and Exclusions to Potentially Impede Market Growth"

Extended warranties often come with limitations, exclusions, and fine print that may restrict coverage for certain types of damage, specific components, or pre-existing conditions. Consumers may be discouraged from purchasing extended warranties if they perceive the coverage as too limited or if they believe they are unlikely to benefit from the warranty due to potential exclusions or loopholes. Some consumers may already have overlapping protections or coverage through other sources, such as the standard manufacturer warranty, credit card benefits, or consumer protection laws. In such cases, consumers may view extended warranties as redundant or unnecessary, especially if they believe they are adequately protected by existing warranties or legal rights.

EXTENDED WARRANTY MARKET REGIONAL INSIGHTS

The market is primarily segmented into Europe, Latin America, Asia Pacific, North America, and Middle East & Africa.

"North America Region Dominating the Market due to Technological Innovations"

North America has emerged as the most dominant region in the global extended warranty market share due to several factors. North America has a mature consumer electronics and appliances market, with high levels of ownership and demand for extended warranty coverage. Consumers in the region are accustomed to purchasing extended warranties for a wide range of products, including smartphones, laptops, home appliances, and vehicles. Consumer preferences in North America often prioritize convenience, peace of mind, and protection against unexpected expenses. Extended warranty coverage aligns with these preferences by offering added security and assurance, particularly for high-ticket items or products with complex technology.

KEY INDUSTRY PLAYERS

"Key Industry Players Shaping the Market through Innovation and Market Expansion"

The extended warranty market is significantly influenced by key industry players that play a pivotal role in driving market dynamics and shaping consumer preferences. These key players possess extensive retail networks and online platforms, providing consumers with easy access to a wide variety of wardrobe options. Their strong global presence and brand recognition have contributed to increased consumer trust and loyalty, driving product adoption. Moreover, these industry giants continually invest in research and development, introducing innovative designs, materials, and smart features in cloth wardrobes, catering to evolving consumer needs and preferences. The collective efforts of these major players significantly impact the competitive landscape and future trajectory of the market.

LIST OF TOP EXTENDED WARRANTY COMPANIES

• Allianz Global Assistance [France]

• American International Group, Inc. [U.S.]

• Amtrust Financial Services, Inc. [U.S.]

• Asurion LLC [U.S.]

• Chubb Limited [Switzerland]

INDUSTRIAL DEVELOPMENT

January 2021: Samsung took significant strives ahead in the extended warranty market. They developed Samsung Galaxy S21. It is a flagship smartphone manufactured by Samsung Electronics Co., Ltd. In many retail settings, consumers have the option to purchase extended warranty coverage for the Galaxy S21, providing additional protection beyond the manufacturer's warranty period.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated timeframe. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.