Understanding the U.S. Extended Warranty Landscape

An extended warranty is termed as a service agreement that is provided by the vendor, seller or manufacturer for any product or appliance. This is generally a period defined beyond the standard warranty for the product to repair or replace the product in case of any defect or damage. In the U.S., extended warranty is provided by the retailers, third-party providers, or manufacturers to the buyers. 

What is shaping the extended warranty sector in the U.S.? 

Rise in cost of repair or replacement and surge in dependency on electronics among the customers boosts the growth of the extended warranty sector in the U.S. In addition, modern devices use a lot of technology which increases their repair cost, and thus manufacturers focus on providing this service. Extended warranty, thus, ensures customer engagement, as well. It is also offered to the buyer if the product is bought using any online platform. 

U.S. extended warranties are provided by manufacturers or sellers on automobiles, IT hardware, appliances, and mobile phones. The cost for the same depends on estimated repair cost, product type, duration of extension and others. Extended warranty helps the buyers avoid the associated repair or replacement cost and thus, gaining traction among the buyers. In addition, buyers also demand for non-traditional coverage, such as accidental damage, and others to make the purchase cost-effective.  

With evolution of technology, the extended warranty is also being provided in the IoT devices, drones, smart home devices, and others by the U.S. dealers. Providers in the U.S. focus on usage of AI and data analytics to detect fraud, which is anticipated to boost the growth of the extended warranty sector in the U.S. In addition, usage of digital platforms for claims processing is projected to be opportunistic for the growth of the U.S. extended warranty landscape.  

Industry adoption of extended warranty services in the U.S. 

Warranties for the vehicle in the U.S. is often limited, and thus buyers demand for extended warranties from the seller. In the auto sector, extended warranty is usually provided for battery packs, powertrains, and more. This also serves as a lucrative opportunity for the dealers and manufacturers. In the consumer electronics sector, extended warranty is provided for audio systems, tablets, phones, and more as post warranty replacement or repair comes at a high cost. It is also provided by gaming consoles, smart home devices and others. In the case of commercial and industrial equipment, it is provided for healthcare devices, industrial machinery, and medical imaging. 

Innovation in the field of extended warranties 

Digitalization and automation are a major development in the extended warranty sector. It helps with claims processing, service scheduling, and others. It also helps with tracking repair status. Automation and usage of artificial intelligence and machine learning is on the rise. This also helps reduce customer wait times and the cost of administration. Retailers offer extended warranty option to the buyers to attract the customers toward the purchase of the product. Retails also make use of data analytics and predictive analytics to predict failure, adjust pricing, and reduce claims. These also help the customer optimize maintenance schedules. Smart home or IoT devices and wearables also require extended warranties, and these can be tailored as per the customer requirements using digitalization. 

Sustaining growth in the extended warranty sector 

Extended warranties are majorly provided in the U.S. appliances, electronics, and consumer goods sector. It provides extended warranty on the products so that customers can save money for any unexpected repair to the product. Rise in digitalization is a major trend that offers a lucrative growth opportunity for the manufacturers and retailers. It uses AI and ML to enable predictive maintenance and offers a lot of benefits to the end user. It helps balance risk, service quality and cost for the end user and thus attracts a lot of customers.  

Thus, the extended warranty sector in the U.S. is projected to experience growth in the upcoming years. With increase in usage of technology and usage of digitalization, the extended warranty sector enables personalized plans, quick claims service, and trustworthy coverage schemes. It also enables transparent pricing for the customers and the providers. It helps the buyers save up on cost of repair or replacement post purchase and usage.  

To get more insights into the latest advancements in U.S. extended warranty, contact our industry specialists today! For any further queries, you can also chat with them directly.      

Short Description 

An extended warranty is referred to an agreement that offers product warranty beyond the manufacturer provided warranty. It covers accidental damage, defects and more for the appliances or gadgets purchased. Extended warranty is sold by the third-party providers, retailers, insurers or manufacturers for the desired product in the U.S. Sometimes, it is offered as credit card benefit as well to the customer.