Warranty Week estimates the U.S. service contract industry generated $40 billion in revenue in 2016 with $17 billion from vehicle service contracts and $23 billion from all other products and devices. Personal Safeguards Group estimates U.S. consumers spent approximately $33.4 billion on new and used vehicle service contracts (at retail prices) in 2016. The numbers are hard to pin down, in part, because of the different ways contracts are classified and revenues reported. Sellers report revenue from retail sales whereas administrators report revenue from wholesale sales, and insurers report gross written premium. Warranty Week attributes slightly more than half the total volume to ten major players and the balance spread among 140 administrators and 33 admitted insurance companies. Any way you measure it, it’s a big industry, and getting bigger.
Have you seen the Ally Bank television ad called, “Nothing Stops Us: Ally Team Huddle”? The team is gathered at Ally HQ in a glass enclosed conference room. A manager reminds the team, “Remember, here at Ally nothing stops us from doing right by our customers. Who’s with me?” The half-dozen people in the room respond with “I’m in” and reach their hands into the middle of an impromptu huddle. Just then, in her haste to join the huddle, a woman walks (crashes) into the conference room through a glass panel. Outside the room hundreds of more employees are rushing to get into the huddle. Motley Crew’s “Kickstart My Heart” is their clarion call. The ad is part of Ally’s 2016 enterprise-wide campaign themed “Do It Right.”
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