2021
9
UK Vehicle Recovery Market Report 2021
2021-09-17T04:18:24+01:00
OX1050021
2195
142503
[{"name":"Automotive","url":"https:\/\/store.mintel.com\/industries\/transport\/automotive"}]
Report
en_GB
“Despite a difficult period for the automotive sector during the COVID-19 pandemic, expenditure on vehicle recovery services has remained largely unaffected. Seen by many as an essential part of car…

UK Vehicle Recovery Market Report 2021

£ 2,195 (Excl.Tax)

Description

The UK Vehicle Recovery report identifies consumer attitudes towards vehicle recovery services, memberships and premiums, and vehicle policy in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Vehicle Recovery market in the UK. 

Current Market Landscape

The high level of interest amongst drivers in holding some form of vehicle recovery insurance remains a surprising feature from previous reports. Two thirds of consumers would look for the most basic form of assistance, namely roadside. Opportunities continue to exist for organisations to offer more enhanced support for relatively little additional cost to the motorist.

  • There was an 11.9% fall in advertising and promotional spend between 2019 and 2020.
  • Traditional policies that offer a range of standard benefits account for 69.5% of the market in 2020.
  • Indirectly purchased insurance accounted for nearly 34% of sales in 2020.

Compared  with other areas of the automotive market, the market for vehicle recovery services has proven relatively resilient up to, and during, the COVID-19 crisis. Although memberships showed increasing signs of stagnation as new and used car sales began to fall after 2016, the sector largely weathered the difficulties posed by the pandemic during 2020. Renewals and strong B2C business generally ensured that policies and revenues suffered only a slight fall.

Future Market Trends in UK B2B Economic Outlook

The long-term prospects for the automotive sector remain a major concern for the sector and are likely behind the recent moves by the likes of AA and RAC to dilute their operations away from recovery services. Aside from the recent fall in new car sales, predictions for the coming decade from organisations such as the SMMT are for stagnation and subsequently a fall in the size of the UK car park. This is in sharp contrast to the steady growth that has been seen previously.

Moving away from competing on price remains a major opportunity for the market. With evidence that average premiums have stabilised in 2020/21, there remains the chance for service providers to do more to extend and enhance their package of services to drive up perceived value and price. Investing in both technology and additional forms of support offers opportunities.

Read on to discover more details or take a look at all of our UK Finance market research.

Quickly understand

  • The impact of COVID-19 on the UK vehicle recovery services market.
  • How COVID-19 and other factors have impacted on the market.
  • Recent developments in premiums and memberships within the overall market.
  • Specific developments by average price, type of policy and channel used.
  • Key drivers impacting on the UK market.

Covered in this report

Services: Advised sale, non-advised sales, mortgage, remortgage.

Brands: Countrywide, Mortgage Advice Bureau, MQube, London & Country. John Charcol, Intrinsic, Quilter Financial Planning, Old Mutual Welath, Old Mutual Plc, RIMIS Mortgage Network, The Openwork Partnership, Legal & General Mortgage Club, Lloyds Banking Group, Nationwide, Santander, NatWest, Barclays, HSBC, Virgin Money Group, Coventry Building Society, Yorkshire Building Society, TSB, Halifax, Mojo Mortgages, Habito, Trussle, Moneybox, Metro Bank, Haysto.

Expert analysis from a specialist in the field

This report, written by Neil Mason, a leading analyst in the Automotive sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Despite a difficult period for the automotive sector during the COVID-19 pandemic, expenditure on vehicle recovery services has remained largely unaffected. Seen by many as an essential part of car ownership, the sector is forecast to return to growth in 2021. Looking ahead, the pace of the UK’s economic recovery is likely to dictate the pace of growth, especially demand for new and used car sales.
Neil Mason
Retail Category Director

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on vehicle recovery services
      • Figure 1: Short, medium and long-term impact of COVID-19 on vehicle recovery services, 2021
    • The market
    • Revenues soften as COVID-19 impacts on market
      • Figure 2: Market size and forecast for the vehicle recovery market, 2016-26
    • Vehicle recovery memberships down only slightly during 2020
      • Figure 3: Vehicle recovery services market, membership, 2016-21
    • Average policy value dragged down by price competition
      • Figure 4: Average premium paid, 2016-21
    • Majority of customers prefer traditional policies
      • Figure 5: Segmentation of the vehicle recovery market (value), by policy type, 2020
    • Ease and cost boost see indirectly purchased share of policies taking a third of sales
      • Figure 6: Segmentation of the vehicle recovery market (value), by direct/indirect channels, 2020
    • Companies and brands
    • AA and RAC lead in different areas
      • Figure 7: Company shares of the vehicle recovery market, by premium and membership, 2021 (est)
    • RAC steps up move towards a comprehensive basic service
    • Investment by major players continues
    • AA shuns caution towards COVID-19 pandemic and continues to promote its brand
      • Figure 8: Total above-the-line, online display and direct mail advertising expenditure on breakdown recovery, 2016-21
    • AA benefits from trust and differentiation from others
      • Figure 9: Attitudes towards and usage of selected brands, 2021
    • The consumer
    • AA continues to benefit from strong customer affinity
      • Figure 10: Ownership of breakdown cover, by recovery organisation, 2021
    • Price can’t be overlooked when marketing
      • Figure 11: Factors considered when selecting a provider of breakdown cover, 2021
    • Adopting a multichannel approach to sales is essential
      • Figure 12: Key means by which current breakdown cover for your main vehicle was acquired, 2021
    • Offering extra is likely to attract only a limited audience
      • Figure 13: Attitudes towards vehicle recovery policies, 2021
    • Overcoming demand for basic service needs to be pursued
      • Figure 14: Level of service sought, 2021
  3. Issues and Insights

    • Minimal impact from COVID-19 pandemic on market
    • New opportunities need to be increasingly explored
    • Stripped-down service is still in demand
  4. The Market – Key Takeaways

    • COVID-19 pandemic fails to dent recovery services sector
    • Premium woes suggest movement away from business to consumer sales
    • Growth in online sales during the pandemic is likely to remain
    • Growing AFV market demands different service approach
  5. Market Size and Performance

    • Minimal impact of COVID-19 on vehicle recovery services
      • Figure 15: Short, medium and long-term impact of COVID-19 on vehicle recovery services, 2021
    • Membership stagnates as pandemic hits market
      • Figure 16: UK vehicle recovery services market, membership, 2016-21
    • Revenues suffer only a small decline during 2020
      • Figure 17: UK vehicle recovery services market, membership revenues including IPT, 2016-21
  6. Market Forecast

    • Recovery services market set to recover quickly after 2020
      • Figure 18: UK vehicle recovery services market, membership revenues including IPT, 2021-26
    • Market drivers and assumptions
      • Figure 19: Key drivers affecting Mintel’s market forecast, 2016-26
    • Forecast methodology
  7. COVID-19 Scenario Performance

    • Mintel’s approach to predicting the impact of COVID-19
    • Fundamental differences in how COVID-19 is affecting consumer markets
    • Pace of economic recovery will be a key factor in market recovery
      • Figure 20: COVID-19 scenario forecasts, 2016-26
    • Expenditure plans of consumers will be significant
    • COVID-19 market disruption: risks and outcomes
      • Figure 21: Summary of Mintel scenario expectations and the impact on the vehicle recovery services market, 2021
  8. Market Segmentation

    • COVID-19 dents demand for regular memberships…
      • Figure 22: Segmentation of the vehicle recovery market, by value, at current prices, 2016-21
    • …as well as average premiums for recovery insurance
      • Figure 23: Average premium paid, 2016-21
    • Comprehensive policies remain popular with buyers
      • Figure 24: Segmentation of the vehicle recovery market (value), by policy type, 2020
    • Over a third of policies are purchased indirectly
      • Figure 25: Segmentation of the vehicle recovery market (value), by direct/indirect channels, 2020
  9. Channels to Market

    • Online benefits from COVID-19 pandemic…
    • …although free policies still dominate
    • Traditional methods of purchasing shouldn’t be overlooked
      • Figure 26: Key channels used for purchasing breakdown recovery insurance, 2015-21
  10. Market Drivers

    • Signs that consumer confidence is starting to strengthen
      • Figure 27: Consumer financial confidence, 2020-21
    • Both new and used car sectors expected to recover in 2021
      • Figure 28: New and used car market volumes (United Kingdom), million units, 2016-21
    • Increase in AFV sales reinforces need to serve this growing market
      • Figure 29: Sales of new cars, by fuel type, 2016-21
    • Strong future purchase intentions offer boost to recovery policies
      • Figure 30: Intention of purchasing a car/s in the next three years, 2021
    • Recovery of sales expected to benefit the AA and RAC
      • Figure 31: UK new registrations of cars, 2016-21
    • Ageing of UK car parc offers further potential
      • Figure 32: Age structure of the UK car parc in years, 2016-20
    • Car use recovers after impact from lockdowns
      • Figure 33: Use of cars for personal transport (Great Britain), 2020-21
    • Move away from car ownership is a long-term threat for sector
      • Figure 34: Car parc (UK) forecast, central scenario, 2020-35
    • No upward pressure from IPT
      • Figure 35: Insurance premium tax rates, 1997-2020
    • Expenditure on cars falls 6.5% during 2020
      • Figure 36: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2016-20
  11. Companies and Brands – Key Takeaways

    • RAC push to raise memberships gives it the lead over the AA
    • Smaller service providers impacted as demand softens during 2020
    • Move away from price evident from RAC’s current strategy
    • White label and partnerships offer potential for smaller providers
    • Big players continue to diversify away from recovery market
    • Use of major campaigns remains the AA’s focus in promoting its service
  12. Market Share

    • RAC overtakes the AA to lead on memberships
      • Figure 37: Company shares of the vehicle recovery market, by membership, 2015-21
    • Pressure increases for smaller operators
      • Figure 38: Share of others in the market, by UK membership, 2015-21
    • High average premiums benefit the AA
      • Figure 39: Company shares of the vehicle recovery market, by value, 2015-21
  13. Competitive Strategies

    • Segmentation used to identify customers
    • Price remains a popular tactical tool with AA and Green Flag…
      • Figure 40: Price-based offers from vehicle recovery companies, new customers, 2021
    • …as RAC looks to promote its service package
      • Figure 41: Non-price communication from vehicle recovery companies, new customers, 2021
    • Service differentiation increasingly employed as a way of standing out
    • Building a package is still popular
    • Offering discounts for those happy to accept a limited service
    • Additional savings are possible by adjusting how you pay for assistance
    • AA and RAC well placed with OEM manufacturers
    • Green Flag is notable in the financial sector
      • Figure 42: Packaged current accounts that offer breakdown cover, new customers, 2021
    • Retail market sees a variety of different providers
  14. Launch Activity and Innovation

    • AA extends towing abilities
      • Figure 43: AA Freewheeling hub, 2021
    • Electric charging technology offered by RAC
      • Figure 44: RAC EV mobile charging system, 2021
    • AA Smart Lease extended to low-emission cars
    • RAC looks to offer full-service support for OEMs…
    • …as well as developing partnerships
  15. Advertising and Marketing Activity

    • COVID-19 impacts promotional expenditure
      • Figure 45: Total above-the-line, online display and direct mail advertising expenditure on breakdown recovery, 2016-21
    • AA unique amongst the ‘big three’ in increasing spend
      • Figure 46: Recorded above-the-line, online display and direct mail total advertising expenditure on breakdown recovery, by advertiser, 2016-20
    • Television dominates over other channels
      • Figure 47: Recorded above-the-line, online display and direct mail total advertising expenditure on breakdown recovery, by media type, 2020
    • Nielsen Ad Intel coverage
  16. Brand Research

    • AA is the most trusted major brand in the market
      • Figure 48: Attitudes towards and usage of selected brands, 2021
    • Green Flag is a currently challenging the AA on brand metrics
      • Figure 49: Key metrics for selected brands, 2021
    • Brand attitudes: Green Flag’s focus on value is at odds with others
      • Figure 50: Attitudes, by brand, 2021
    • Brand personality: Direct Line is similar to the big three in being accessible
      • Figure 51: Brand personality – macro image, 2021
    • Differentiation apparent when it comes to demonstrating micro personalities
      • Figure 52: Brand personality – micro image, 2021
  17. The Consumer – Key Takeaways

    • Confidence towards the risks posed by COVID-19 is growing
    • Smaller service providers can emulate the success of AXA with younger drivers
    • Young adults represent an opportunity for added-value services
    • Older women have an affinity for purchasing online
    • Further potential exists for the AA to broaden its service offer
    • Trading up should be encouraged for those purchasing by phone
  18. Impact of COVID-19 on Consumer Behaviour

    • Concerns about COVID-19 are easing
      • Figure 53: Worries about risk of exposure to COVID-19, 2020-21
    • Fall in non-essential expenditure illustrates reopening of economy
      • Figure 54: Shopping habits, 2020-21
  19. Presence of Breakdown Recovery Organisations

    • AA records the highest presence amongst car owners
      • Figure 55: Ownership of breakdown cover, by recovery organisation, 2021
    • AA and RAC appeal to different groups
    • AXA benefits from links with young car owners
    • Exploit opportunities where possible
    • Green Flag increases pressure on RAC
      • Figure 56: Ownership of breakdown cover, by recovery organisation, 2016-21
  20. Selecting a Recovery Provider

    • Price leads over service
      • Figure 57: Factors considered when selecting a provider of breakdown cover, 2021
    • Overcoming price is a factor amongst older adults
    • Younger adults are open to benefits
    • Basic service likely to appeal to less affluent adults
    • Price is less important for owners of new cars
    • Smaller service providers need to consider broadening their service
    • COVID-19 reinforces need for price and comfort
      • Figure 58: Factors considered when selecting a provider of breakdown cover, 2019 and 2021
  21. How Cover Is Acquired

    • Simplicity is sought when acquiring insurance
      • Figure 59: Key means by which current breakdown cover for your main vehicle was acquired, 2021
    • Young interested in getting insurance for free
    • Online opportunities exist with older women…
    • …as well as owners of used cars
    • Green Flag can build on its online appeal
  22. Attitudes towards Vehicle Recovery Policies

    • Money and thinking local dominate over added-value services
      • Figure 60: Attitudes towards vehicle recovery insurance, 2021
    • Young adults have a wide range of interests
    • Exploitation of interest in diagnostics by urban motorists
    • AA is well placed to benefit from broadening its service package
    • Importance of factors when thinking about vehicle recovery – CHAID analysis
    • A benefit such as an app is important for those seeking a range of products from an insurer
      • Figure 61: Interest in vehicle recovery insurance – CHAID – Tree output, 2021
      • Figure 62: Interest in features of vehicle recovery insurance – CHAID – Table output, 2021
  23. Level of Service Sought

    • Basic assistance is the most popular
      • Figure 63: Level of service sought, 2021
    • Lack of interest from young drivers offers market opportunities
    • Exploiting family interest in European cover offers partnership potential
    • Focusing on roadside recovery offers a tactical way to capture sales
    • Trading up potential for those purchasing over the telephone
  24. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  25. Appendix – Central Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 64: Market forecast and prediction intervals for the vehicle recovery market, 2021-26
    • Market drivers and assumptions
      • Figure 65: Key drivers affecting Mintel’s market forecast, 2021-26
    • Forecast methodology
  26. Appendix – COVID Scenario Performance Methodology and Assumptions

    • Scenario performance
      • Figure 66: COVID scenarios for the vehicle recovery market, 2016-26
    • Rapid COVID recovery, central and extended COVID disruption scenarios outline
    • Scenario methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

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Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

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Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

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*databooks not available with UK B2B Industry reports.

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