Extended vehicle service plans cover car repairs once the manufacturer’s warranty expires. More than two-thirds of the 270 million vehicles in the U.S. are currently uncovered1, yet most Americans can’t afford an unexpected $500 repair bill2, creating a significant market opportunity.
1 “Vehicle Service Contract Industry Market Commentary – August 2017,” Colonnade Advisors 2017
2 Bankrate Money Pulse Survey
At three key points: During the vehicle’s original sale, when the manufacturer’s warranty expires and if the vehicle is sold used.3 Car dealerships typically sell vehicle service plans face-to-face, and some extended service contract companies market to drivers through direct mail and other channels.
3 “Vehicle Service Contract Industry Market Commentary – August 2017,” Colonnade Advisors
Because vehicle service plans aren’t typically sold digitally, opportunities to market them are limited. Few companies offer a complete solution for financing, administering and selling vehicle service plans, so businesses that want to add this offering must invest in building their own.
As the average vehicle on the road gets older, the opportunity to drive customer satisfaction and revenue through high-quality vehicle service plan partnerships will continue to grow. The $33 billion annual market is expected to peak by 2024.5
5 “Vehicle Service Contract Industry Market Commentary – August 2017,” Colonnade Advisors
