GITNUXREPORT 2026

Vehicle Service Contract Industry Statistics

Vehicle service contracts are growing as more consumers seek repair cost protection and peace of mind.

Min-ji Park

Research Analyst focused on sustainability and consumer trends.

First published: Feb 13, 2026

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Statistic 1

Vehicle service contract claim denial rate averaged 22.4% across providers in 2023 U.S. data.

Statistic 2

Average claim payout under vehicle service contracts was $4,127 per approved claim in 2022.

Statistic 3

68% of filed vehicle service contract claims were for powertrain components in 2023.

Statistic 4

Reimbursement time for approved VSC claims averaged 21 days in 2023 top providers.

Statistic 5

High-tech component claims (e.g., infotainment) rose 34% YoY to 12% of total claims in 2023.

Statistic 6

Fraudulent claims in vehicle service contracts cost the industry $450 million in 2022.

Statistic 7

Exclusion clause disputes accounted for 41% of denied VSC claims in FTC 2023 complaints.

Statistic 8

Average repair cost covered by VSCs increased 15% to $3,892 from 2022 to 2023.

Statistic 9

76% of VSC claims were settled via direct repair network reimbursements in 2023.

Statistic 10

EV battery claims under VSCs represented 3.2% of total but averaged $18,500 payout in 2023.

Statistic 11

Claims frequency for VSCs averaged 0.42 per contract per year in 2023.

Statistic 12

Engine repair claims comprised 29% of VSC payouts totaling $1.9B in 2023.

Statistic 13

85% of VSC claims approved on first submission for AAA policies in 2023.

Statistic 14

AC system claims surged 25% due to refrigerant costs in 2023.

Statistic 15

Average denial appeal success rate was 31% for VSC claims in 2023.

Statistic 16

Transmission claims averaged $5,600 payout, highest category in 2023.

Statistic 17

Mobile repair claims under VSCs grew 42% to 15% of total in 2023.

Statistic 18

Electrical system claims doubled to 18% share from 2019-2023.

Statistic 19

24% of new car buyers in the U.S. purchased a vehicle service contract at the point of sale in 2023.

Statistic 20

Consumer satisfaction with vehicle service contracts scored 78/100 in J.D. Power's 2023 study, up 4 points from 2022.

Statistic 21

62% of U.S. consumers who bought extended warranties reported using them at least once within 3 years.

Statistic 22

Average consumer spend on vehicle service contracts was $1,856 for new vehicles and $1,423 for used in 2023.

Statistic 23

71% of vehicle service contract buyers cited peace of mind as the primary reason for purchase in a 2023 survey.

Statistic 24

Cancellation rates for vehicle service contracts within 30 days averaged 14.7% in the U.S. in 2022.

Statistic 25

55% of millennials (aged 25-40) opted for vehicle service contracts compared to 42% of baby boomers in 2023.

Statistic 26

Net Promoter Score (NPS) for top vehicle service contract providers averaged 32 in 2023 consumer reviews.

Statistic 27

48% of used car buyers under $20,000 purchase price acquired a service contract in 2023 U.S. market.

Statistic 28

Women represented 52% of vehicle service contract purchasers in online channels in 2023.

Statistic 29

67% of U.S. consumers aware of VSCs but only 23% purchased one in past 5 years per 2023 poll.

Statistic 30

Repeat purchase rate for VSCs among satisfied customers was 44% in 2023.

Statistic 31

37% of EV owners bought VSCs covering battery in 2023 survey.

Statistic 32

Hispanic consumers purchased VSCs at 1.3x rate of average in 2023 demographics.

Statistic 33

VSC buyers saved average $2,300 net after claims vs. out-of-pocket in 3 years.

Statistic 34

81% satisfaction rate for claims process among top 3 providers in 2023.

Statistic 35

Urban consumers 12% more likely to buy VSCs than rural in 2023 data.

Statistic 36

Average VSC term length chosen was 7.2 years/100,000 miles in 2023.

Statistic 37

The U.S. vehicle service contract market reached a value of $28.4 billion in 2023, reflecting a 7.2% year-over-year growth driven by rising vehicle repair costs.

Statistic 38

Global vehicle service contract penetration rate stood at 15.3% of new vehicle sales in 2022, up from 12.8% in 2018.

Statistic 39

Extended warranty sales for used vehicles accounted for 62% of total vehicle service contract revenue in the U.S. during 2023.

Statistic 40

The average annual growth rate (CAGR) for the North American vehicle service contract industry from 2019-2024 was projected at 6.8%.

Statistic 41

In 2023, online sales channels contributed 41% to total vehicle service contract premiums in Europe.

Statistic 42

U.S. vehicle service contract market is forecasted to hit $35.2 billion by 2028, with a CAGR of 5.4% from 2024 onwards.

Statistic 43

Premiums written in the vehicle service contract sector grew by 9.1% in 2022, totaling $26.7 billion globally.

Statistic 44

The aftermarket vehicle service contract segment dominated with 73% market share in Asia-Pacific in 2023.

Statistic 45

U.S. dealerships sold $12.5 billion in vehicle service contracts in 2023, comprising 28% of F&I profits.

Statistic 46

Vehicle service contract lapse rate averaged 18.2% in the first year post-purchase in 2022 U.S. data.

Statistic 47

The U.S. vehicle service contract market was valued at $25.6 billion in 2022 with 8% growth.

Statistic 48

Vehicle service contract industry CAGR projected at 6.5% through 2030 globally.

Statistic 49

Used vehicle VSC penetration hit 35% in luxury segment in 2023 U.S.

Statistic 50

Asia-Pacific VSC market grew 11.2% to $4.8 billion in 2023.

Statistic 51

Dealer F&I departments earned $3,200 average profit per VSC sold in 2023.

Statistic 52

19.5% of all financed vehicles included a VSC in Q3 2023 U.S. data.

Statistic 53

Latin America VSC market valued at $1.2 billion with 9.8% CAGR 2023-2028.

Statistic 54

VSC reinsurance premiums reached $7.9 billion industry-wide in 2023.

Statistic 55

Endurance Warranty held 18% market share among independent administrators in the U.S. in 2023.

Statistic 56

CarShield administered over 1.2 million active contracts as of Q4 2023, leading the direct-to-consumer segment.

Statistic 57

The top 10 vehicle service contract providers controlled 67% of U.S. premiums written in 2022.

Statistic 58

Ally Financial's vehicle service contract division generated $2.1 billion in revenue in 2023.

Statistic 59

CARCHEX ranked #1 in customer satisfaction among providers with NPS of 45 in 2023.

Statistic 60

Independent administrators grew from 45 to 62 firms between 2018 and 2023 in the U.S.

Statistic 61

Geico's vehicle service contract partnerships yielded 250,000 policies sold in 2023.

Statistic 62

Olive, a fintech VSC provider, raised $110 million in funding in 2023 for expansion.

Statistic 63

Dealertrack processed 4.5 million VSC sales transactions in 2023 across U.S. dealerships.

Statistic 64

Zurich Insurance captured 9% of the captive VSC market in North America in 2023.

Statistic 65

Protect My Car led UK VSC providers with 22% share in 2023.

Statistic 66

Fidelity Warranty Services managed 850,000 contracts in 2023.

Statistic 67

Top 5 administrators handled 54% of VSC claims volume in 2023.

Statistic 68

Toco Warranty expanded to 15 states with 300% policy growth in 2023.

Statistic 69

Royal Administration reported $1.8 billion in premiums in 2023.

Statistic 70

28 new VSC providers entered market in 2023, mostly fintechs.

Statistic 71

State National Companies insured 40% of dealer-sold VSCs in 2023.

Statistic 72

Omega Auto Care acquired 3 competitors in 2023 for $45M.

Statistic 73

29% of vehicle service contract complaints involved claim denials per BBB 2023 data.

Statistic 74

14 states mandated 30-day free-look periods for vehicle service contracts as of 2023.

Statistic 75

FTC issued 1,200 warnings to VSC providers for deceptive marketing in 2023.

Statistic 76

California VSC regulations required 90% reserve funding, leading to 12 provider exits in 2023.

Statistic 77

Digital VSC sales grew 28% in 2023 due to embedded insurance trends.

Statistic 78

EU's PRIIPs regulation impacted VSC disclosures, reducing sales by 8% in 2023.

Statistic 79

Blockchain pilots for VSC claims verification launched by 5 providers in 2023.

Statistic 80

Telematics integration in VSCs rose to 22% of new policies in 2023 for usage-based pricing.

Statistic 81

U.S. class-action lawsuits against VSC providers totaled 47 in 2023, up 19% from 2022.

Statistic 82

7 U.S. states passed new VSC consumer protection laws in 2023.

Statistic 83

GDPR compliance cost VSC providers €250M extra in EU 2023.

Statistic 84

AI denial reviews reduced VSC disputes by 19% in pilot programs 2023.

Statistic 85

52% of VSC ads flagged for misleading terms by ASA in UK 2023.

Statistic 86

Subscription-based VSCs launched by 12 providers, 5% market penetration 2023.

Statistic 87

Cybersecurity incidents in VSC databases rose 36% in 2023.

Statistic 88

ESG-focused VSCs for green repairs grew 15% in policy sales 2023.

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In an industry where the average repair bill is now creeping towards $4,000, the once-overlooked vehicle service contract has quietly exploded into a $28.4 billion shield against financial uncertainty for drivers across America.

Key Takeaways

The U.S. vehicle service contract market reached a value of $28.4 billion in 2023, reflecting a 7.2% year-over-year growth driven by rising vehicle repair costs.
Global vehicle service contract penetration rate stood at 15.3% of new vehicle sales in 2022, up from 12.8% in 2018.
Extended warranty sales for used vehicles accounted for 62% of total vehicle service contract revenue in the U.S. during 2023.
24% of new car buyers in the U.S. purchased a vehicle service contract at the point of sale in 2023.
Consumer satisfaction with vehicle service contracts scored 78/100 in J.D. Power's 2023 study, up 4 points from 2022.
62% of U.S. consumers who bought extended warranties reported using them at least once within 3 years.
Endurance Warranty held 18% market share among independent administrators in the U.S. in 2023.
CarShield administered over 1.2 million active contracts as of Q4 2023, leading the direct-to-consumer segment.
The top 10 vehicle service contract providers controlled 67% of U.S. premiums written in 2022.
Vehicle service contract claim denial rate averaged 22.4% across providers in 2023 U.S. data.
Average claim payout under vehicle service contracts was $4,127 per approved claim in 2022.
68% of filed vehicle service contract claims were for powertrain components in 2023.
29% of vehicle service contract complaints involved claim denials per BBB 2023 data.
14 states mandated 30-day free-look periods for vehicle service contracts as of 2023.
FTC issued 1,200 warnings to VSC providers for deceptive marketing in 2023.

Vehicle service contracts are growing as more consumers seek repair cost protection and peace of mind.

Claims and Payouts

Vehicle service contract claim denial rate averaged 22.4% across providers in 2023 U.S. data.
Average claim payout under vehicle service contracts was $4,127 per approved claim in 2022.
68% of filed vehicle service contract claims were for powertrain components in 2023.
Reimbursement time for approved VSC claims averaged 21 days in 2023 top providers.
High-tech component claims (e.g., infotainment) rose 34% YoY to 12% of total claims in 2023.
Fraudulent claims in vehicle service contracts cost the industry $450 million in 2022.
Exclusion clause disputes accounted for 41% of denied VSC claims in FTC 2023 complaints.
Average repair cost covered by VSCs increased 15% to $3,892 from 2022 to 2023.
76% of VSC claims were settled via direct repair network reimbursements in 2023.
EV battery claims under VSCs represented 3.2% of total but averaged $18,500 payout in 2023.
Claims frequency for VSCs averaged 0.42 per contract per year in 2023.
Engine repair claims comprised 29% of VSC payouts totaling $1.9B in 2023.
85% of VSC claims approved on first submission for AAA policies in 2023.
AC system claims surged 25% due to refrigerant costs in 2023.
Average denial appeal success rate was 31% for VSC claims in 2023.
Transmission claims averaged $5,600 payout, highest category in 2023.
Mobile repair claims under VSCs grew 42% to 15% of total in 2023.
Electrical system claims doubled to 18% share from 2019-2023.

Claims and Payouts Interpretation

In the VSC industry's 2023 ledger, nearly a quarter of claims meet a door marked 'denied,' powertrains dominate the repair bays while high-tech glitches rise sharply, and while the average payout climbs steadily, so does the sophistication of disputes over fine print, all against a backdrop of increasingly expensive and complex components demanding ever more precise coverage.

Consumer Adoption and Satisfaction

24% of new car buyers in the U.S. purchased a vehicle service contract at the point of sale in 2023.
Consumer satisfaction with vehicle service contracts scored 78/100 in J.D. Power's 2023 study, up 4 points from 2022.
62% of U.S. consumers who bought extended warranties reported using them at least once within 3 years.
Average consumer spend on vehicle service contracts was $1,856 for new vehicles and $1,423 for used in 2023.
71% of vehicle service contract buyers cited peace of mind as the primary reason for purchase in a 2023 survey.
Cancellation rates for vehicle service contracts within 30 days averaged 14.7% in the U.S. in 2022.
55% of millennials (aged 25-40) opted for vehicle service contracts compared to 42% of baby boomers in 2023.
Net Promoter Score (NPS) for top vehicle service contract providers averaged 32 in 2023 consumer reviews.
48% of used car buyers under $20,000 purchase price acquired a service contract in 2023 U.S. market.
Women represented 52% of vehicle service contract purchasers in online channels in 2023.
67% of U.S. consumers aware of VSCs but only 23% purchased one in past 5 years per 2023 poll.
Repeat purchase rate for VSCs among satisfied customers was 44% in 2023.
37% of EV owners bought VSCs covering battery in 2023 survey.
Hispanic consumers purchased VSCs at 1.3x rate of average in 2023 demographics.
VSC buyers saved average $2,300 net after claims vs. out-of-pocket in 3 years.
81% satisfaction rate for claims process among top 3 providers in 2023.
Urban consumers 12% more likely to buy VSCs than rural in 2023 data.
Average VSC term length chosen was 7.2 years/100,000 miles in 2023.

Consumer Adoption and Satisfaction Interpretation

While one in four new car buyers roll the dice on pricey service contracts for that sweet peace of mind, the gamble seems to pay off for many as two-thirds actually use them, and those who do typically save a net two grand, though nearly 15% have a quick change of heart and cancel within a month.

Market Size and Growth

The U.S. vehicle service contract market reached a value of $28.4 billion in 2023, reflecting a 7.2% year-over-year growth driven by rising vehicle repair costs.
Global vehicle service contract penetration rate stood at 15.3% of new vehicle sales in 2022, up from 12.8% in 2018.
Extended warranty sales for used vehicles accounted for 62% of total vehicle service contract revenue in the U.S. during 2023.
The average annual growth rate (CAGR) for the North American vehicle service contract industry from 2019-2024 was projected at 6.8%.
In 2023, online sales channels contributed 41% to total vehicle service contract premiums in Europe.
U.S. vehicle service contract market is forecasted to hit $35.2 billion by 2028, with a CAGR of 5.4% from 2024 onwards.
Premiums written in the vehicle service contract sector grew by 9.1% in 2022, totaling $26.7 billion globally.
The aftermarket vehicle service contract segment dominated with 73% market share in Asia-Pacific in 2023.
U.S. dealerships sold $12.5 billion in vehicle service contracts in 2023, comprising 28% of F&I profits.
Vehicle service contract lapse rate averaged 18.2% in the first year post-purchase in 2022 U.S. data.
The U.S. vehicle service contract market was valued at $25.6 billion in 2022 with 8% growth.
Vehicle service contract industry CAGR projected at 6.5% through 2030 globally.
Used vehicle VSC penetration hit 35% in luxury segment in 2023 U.S.
Asia-Pacific VSC market grew 11.2% to $4.8 billion in 2023.
Dealer F&I departments earned $3,200 average profit per VSC sold in 2023.
19.5% of all financed vehicles included a VSC in Q3 2023 U.S. data.
Latin America VSC market valued at $1.2 billion with 9.8% CAGR 2023-2028.
VSC reinsurance premiums reached $7.9 billion industry-wide in 2023.

Market Size and Growth Interpretation

The stats reveal a $28.4 billion a year industry where, paradoxically, we are all so terrified of future repair bills that we are willing to pay a premium now to soothe our automotive anxieties, especially for used cars.

Provider Landscape

Endurance Warranty held 18% market share among independent administrators in the U.S. in 2023.
CarShield administered over 1.2 million active contracts as of Q4 2023, leading the direct-to-consumer segment.
The top 10 vehicle service contract providers controlled 67% of U.S. premiums written in 2022.
Ally Financial's vehicle service contract division generated $2.1 billion in revenue in 2023.
CARCHEX ranked #1 in customer satisfaction among providers with NPS of 45 in 2023.
Independent administrators grew from 45 to 62 firms between 2018 and 2023 in the U.S.
Geico's vehicle service contract partnerships yielded 250,000 policies sold in 2023.
Olive, a fintech VSC provider, raised $110 million in funding in 2023 for expansion.
Dealertrack processed 4.5 million VSC sales transactions in 2023 across U.S. dealerships.
Zurich Insurance captured 9% of the captive VSC market in North America in 2023.
Protect My Car led UK VSC providers with 22% share in 2023.
Fidelity Warranty Services managed 850,000 contracts in 2023.
Top 5 administrators handled 54% of VSC claims volume in 2023.
Toco Warranty expanded to 15 states with 300% policy growth in 2023.
Royal Administration reported $1.8 billion in premiums in 2023.
28 new VSC providers entered market in 2023, mostly fintechs.
State National Companies insured 40% of dealer-sold VSCs in 2023.
Omega Auto Care acquired 3 competitors in 2023 for $45M.

Provider Landscape Interpretation

The industry data paints a picture of a fragmented but consolidating market, where fierce competition for customers and capital meets a relentless drive for scale, all while new, nimble players keep the established giants on their toes.

Regulatory and Trends

29% of vehicle service contract complaints involved claim denials per BBB 2023 data.
14 states mandated 30-day free-look periods for vehicle service contracts as of 2023.
FTC issued 1,200 warnings to VSC providers for deceptive marketing in 2023.
California VSC regulations required 90% reserve funding, leading to 12 provider exits in 2023.
Digital VSC sales grew 28% in 2023 due to embedded insurance trends.
EU's PRIIPs regulation impacted VSC disclosures, reducing sales by 8% in 2023.
Blockchain pilots for VSC claims verification launched by 5 providers in 2023.
Telematics integration in VSCs rose to 22% of new policies in 2023 for usage-based pricing.
U.S. class-action lawsuits against VSC providers totaled 47 in 2023, up 19% from 2022.
7 U.S. states passed new VSC consumer protection laws in 2023.
GDPR compliance cost VSC providers €250M extra in EU 2023.
AI denial reviews reduced VSC disputes by 19% in pilot programs 2023.
52% of VSC ads flagged for misleading terms by ASA in UK 2023.
Subscription-based VSCs launched by 12 providers, 5% market penetration 2023.
Cybersecurity incidents in VSC databases rose 36% in 2023.
ESG-focused VSCs for green repairs grew 15% in policy sales 2023.

Regulatory and Trends Interpretation

It's clear the industry is trying to polish its image with tech and green initiatives, yet regulators keep shining a harsh light on the same old, costly problems of misleading ads and denied claims.

Sources & References

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