Hello again Pedro46,
I did additional research and below you will find all the information
I was able to uncover regarding extended warranties or service
contracts.
According to an article published in the Texas Bar Journal in January
2003, an estimated 50 percent of all new car buyers purchase service
contracts.
Excerpt:
?Service Contracts: Do You Need One?
If you are buying a car or major appliance, whether in a retail store,
by catalog, or online, you may be offered a service contract. To many
consumers, buying a service contract is like buying ?peace of mind?
from repair hassles. An estimated 50 percent of all new car buyers,
and many used car and major appliance buyers, purchase service
contracts. The cost can range from $50 to $500, depending on the
length and amount of coverage provided. Some consumers, however, may
be paying for more protection than they need.?
Source:
State Bar of Texas
Texas Bar Journal
January 2003: Volume 66, Number 1
http://www.texasbar.com/Template.cfm?Section=Pamphlets&Template=/ContentManagement/ContentDisplay.cfm&ContentID=7077
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According to a J.D. Power and Associates Press Release published on
November 2, 2004, nearly 25 percent of vehicle owners indicate that
they purchased an extended warranty or service contract when they
originally acquired their vehicle.
Excerpt:
?A factor that slows this exodus is extended warranties, or service
contracts. Nearly 25 percent of vehicle owners indicate that they
purchased an extended warranty or service contract when they
originally acquired their vehicle. Customers having these tend to
frequent a dealer more often, and also report spending nearly $100
more at a dealership in the past 12 months than those who did not
purchase additional coverage.?
J.D. Power and Associates
Press Release: November 2, 2004
http://www.jdpa.com/NeWs/relEaSes/pressrelease.asp?ID=2004163
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According to a J.D. Power and Associates 2001 New Vehicle Service
Contract Report released in October 2001, 28% percent of new-vehicle
owners purchased service contracts in 2001, compared to 21 percent in
1996.
Excerpt:
?The number of new-vehicle buyers opting for extended warranty
coverage has reached an industry high, according to the J.D. Power and
Associates 2001 New Vehicle Service Contract Report released today.
Twenty-eight percent of new-vehicle owners purchased service contracts
in 2001, compared to 21 percent in 1996. The average price of a
service contract on a new vehicle also increased to $1,178?up $81 from
last year.?
(?)
?The average dealer profit on service contracts in 2001 is $548?a 7
percent increase over 2000. Plymouth and Mitsubishi lead the industry
in having the largest dealer profit, with a 57 percent profit margin.?
J.D. Power and Associates
Press Release: October 8, 2001
http://www.jdpa.com/news/releases/pressrelease.asp?ID=176
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According to Lutz and Padmanabhan (1998), 27% of new car buyers
purchase an extended warranty.
Source: A Theory of Fraud and Over-Consumption in Experts Markets
July 2004
http://fmwww.bc.edu/ec-p/wp495.pdf
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Penetration Rates
According to the J.D. Power and Associates 2004 Dealer Service
Contract Satisfaction Study:
- Dealers who use independent service contract providers as their
primary provider have penetration rates of 32 percent among
new-vehicle buyers.
- Dealers who favor factory providers have penetration rates of just
28 percent among new-vehicle buyers.
Excerpt:
?According to the J.D. Power and Associates 2004 Dealer Service
Contract Satisfaction Study released in March 2004, automotive dealers
who offer their customers optional service contracts, including
extended warranty plans and mechanical breakdown protection, capture a
higher share of buyers when selling plans from independent service
contract providers than factory providers,.?
?The study finds that dealers who use independent service contract
providers as their primary provider have penetration rates of 32
percent among new-vehicle buyers and 40 percent among used-vehicle
buyers. By comparison, dealers who favor factory providers have
penetration rates of just 28 percent among new-vehicle buyers and 33
percent among used-vehicle buyers.?
J.D. Power and Associates
Press Release: March 17, 2004
http://www.jdpa.com/NeWs/ReLEaSeS/pressrelease.asp?ID=2004024
http://www.jdpa.com/studies_jdpower/pressrelease.asp?StudyID=847
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Markup
According to a March 2003 report by Consumer Union's Southwest
Regional Office, consumers pay a 300 percent markup on dealer
warranties
Bankrate
http://www.bankrate.com/brm/news/auto/car-guide-2004/warranty-wisdom1.asp
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?Dealers make a big markup above what they pay for these contracts.
One study found that among a sample of contracts it examined, backed
by a major manufacturer, 92 percent of the customers paid at least
$200 above dealer cost, 24 percent paid at least $600 above dealer
cost, and three percent paid at least $900 above dealer cost.?
Center for the Study of Services
http://www.checkbook.org/auto/ExtendedService.cfm
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According to Consumer Reports, extended warranties can yield a 40 to
80 percent profit for retailers.
Seattle Pi: August 13, 2005
http://seattlepi.nwsource.com/athome/236094_warranty13.html
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?According to a survey of a representative sample of online households
that own a vehicle*, nearly 90 percent of consumers place high
importance on maintaining a vehicle and getting extended warranty
coverage from automakers. More than half of the respondents see it as
a hassle to get their vehicle serviced, and one-third are willing to
pay someone else to take away the stress related to getting a car
serviced. The survey also revealed that personalized, location-based
point-of-interest services are important to 55 percent of consumers.?
GartnerG2 Research : September 24, 2001
http://www.gartner.com/5_about/press_releases/2001/pr20010924b.html
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An interesting article at Warranty Week published on January 19, 2005
estimates that Ford and Dell are the only two companies bringing in
more than a billion dollars a year through the sale of extended
warranties.
Read the full text of this article and see a pie chart of extended
warranty administrators estimated market shares ( 2004) here at
Warranty Week:
http://www.warrantyweek.com/archive/ww20050119.html
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What is the total yearly number of passenger vehicle sales in the US?
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According to the National Automobile Dealers Association:
New-Vehicle Sales = 16.86 million units in 2004
It can be broken down as follows:
Year: 2004
New Cars: 7,505,900
Light-duty trucks: 9,360,600
Total light-duty vehicles: 16,866,500
Source: National Automobile Dealers Association
Download the publication here:
http://www.nada.org/Content/NavigationMenu/Newsroom/NADAData/20052/NADA_Data_2005_newvehicle.pdf
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What percent of the total US population is 50+ now?
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According to the U.S. Census Bureau there are currently 87,056,215 people 50+
The total population is 295,734,134.
Therefore 29.4% of the population is 50+ years old.
Data source: U.S. Census Bureau
United States/2005
Total, all ages 295,734,134
50- 54 19,984,208
55- 59 17,359,270
60- 64 13,016,833
65- 69 10,123,368
70- 74 8,500,392
75- 79 7,376,085
80+ 10,696,059
Source: U.S. Census Bureau, International Data Base
http://www.census.gov/ipc/www/idbpyr.html
IDB Population Pyramids
http://www.census.gov/cgi-bin/ipc/idbagg
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What percent of total US population will 50+ be in 10 years?
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In the year 2015 the U.S. Census Bureau estimates that there will be
109,577,639 people age 50+
The total population is estimated to be 322,592,787 in the year 2015.
Therefore 33.96% of the population will be 50+ years old in the year 2015.
Data source: U.S. Census Bureau
United States/2015
Total, all ages 322,592,787
50- 54 22,376,632
55- 59 21,649,543
60- 64 18,760,737
65- 69 15,621,458
70- 74 10,986,874
75- 79 7,760,859
80+ 12,421,536
Source: Source: U.S. Census Bureau, International Data Base
http://www.census.gov/ipc/www/idbpyr.html
IDB Population Pyramids
http://www.census.gov/cgi-bin/ipc/idbagg
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What percent of the total vehicle sales are purchased by seniors 50+?
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According to research by the Senior Publishers Media Group 56% of all
new car sales are purchased by seniors 50+.
Excerpts:
?They are the wealthiest Americans. They spent more than 400 billion
dollars in 2003. They buy 56% of all new cars and spend more per
capita on travel and leisure than any other age group. They spend 7
billion dollars online each year and are the fastest growing user
segment on the Internet. They are active grandparents, aunts, uncles,
singles and parents. They are mature Americans, age 50 and older.?
(?)
?According to Newsweek?s New Car Buyers Report, younger persons bought
most new cars priced under $10,000 (only 17% of mature adults bought
these low cost models). More than half of 55+ mature adults (53%)
bought cars priced between $10,000 and $14,999 and 30% bought cars
priced over $15,000. 76% of mature adults bought American made
automobiles.?
?The average luxury-car buyer is age 60. Mature adults age 50 and
older buy 56% of all new cars and most purchases are made for cash.
They buy cars that are more expensive than younger Americans. The
average age for new Corvette buyers is the early 50?s. Mercedes
S-Class, Cadillac DeVille, Jaguar XJ, Ford Taurus, Subaru Outback, GMC
Safari Wagon and Toyota Avalon ¬ median age of drivers of these cars
are all age 50+.?
Senior Publishers Media Group: September 16, 2004
http://www.spmg.com/newsroom_spmg_auto.html
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Consumers over 50?now the fastest-growing segment of the car-buying public
AARP: January 2004
http://www.aarp.org/bulletin/yourlife/Articles/a2003-12-30-smartcars.html
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The Detroit News published an interesting article on vehicle buyer
demographics on August 15, 2005.
People who buy the domestic vehicles tend to be older.
Auto brand Mean age
Domestic 51
European 48
Japanese 49
Korean 49
Source: Maritz New Vehicle Customer Study
Read the full text of this article here:
http://www.detnews.com/2005/autosinsider/0508/15/A01-280996.htm
Search terms used:
"New car" +sales
Transportation statistics
Motor vehicle sales million
Percent extended service warranty
Census bureau population age
New car buyer market age gender total
Percent of vehicles OR cars with ?extended warranties
"New car buyers" "extended warranties OR warranty" respondents OR
responded survey OR poll percent
"Extended warranty market"
Percent of new car buyers are ?over 50"
Independent Extended Warranty Provider
Third party insurer?s offer extended warranties
J.D. Power and Associates
I hope the information provided is helpful!
Best regards,
Bobbie7 |
