PRESS RELEASE: Consumer Automotive Finance Services in Europe
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Insurance, warranty and assistance services sold by the automotive trade in Europe are worth more than EUR 900 in revenue for every new car sold to consumers. ...
Insurance, warranty and assistance services sold by the automotive trade in Europe are worth more than EUR 900 in revenue for every new car sold to consumers.
London, 16 January 2014 - Across much of Europe, car dealers and manufacturers have had a tough time in recent years, with new car registrations falling in a majority of countries albeit with a few exceptions such as Russia, Turkey and the UK. This environment means that dealerships have become more reliant than ever on generating revenue from financial and other services that can be cross-sold with cars, as have car manufacturers.
Finaccord, a market research consultancy specialising in financial services, has recently produced an analysis of the value of major insurance, warranty and assistance products sold by car dealers and manufacturer brands to consumers across 25 European countries. It estimates that dealers sold policies worth EUR 16.3 billion in revenue in 2012 (measured as gross written premiums and similar revenues) across six major insurance, warranty and assistance types plus niche insurance products that are present in some of these countries. The six main types are motor insurance, extended warranties, prepaid service contracts, creditor insurance, GAP (guaranteed asset protection) insurance and road assistance, while the niche products range from passenger accident insurance in Austria to tyre insurance in the UK.
Just over half of this figure was new business generated from car sales made in 2012 itself (EUR 8.6 billion), while the rest came from policies connected to cars sold in previous years that were still in force in 2012 (EUR 7.7 billion).
Comments David Parry, Managing Consultant at Finaccord: “Sales of insurance, warranty and assistance services were worth an average of EUR 448 for every new car sold to individual customers in 2012, compared to EUR 261 for used cars sold by dealers. However, the used car market was more valuable in percentage terms because this figure was worth 2.6% of the value of all used cars sold by dealers compared to 2.0% for new cars. This covers new sales in 2012 only – if you add in policies sold in previous years that are still in force, these services were worth EUR 905 for every new car sold to individuals and EUR 467 for every used car sold by dealers in 2012."
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