The UK vehicle assistance and recovery market continues to recover after a challenging few years. However, a shrinking car parc presents an upcoming challenge, and consumer demand goes beyond just a good price.
UK Vehicle Recovery Market – Current Landscape
The UK vehicle recovery services market is recovering strongly after what was a difficult period during the COVID-19 pandemic. Strengthening sales in the UK car industry, helped by the wider improvement in the UK economy as well as the personal financial situation of many car owners, is expected to raise revenues by 3.9% in 2024.
Despite improvements for car sales, the stagnation of the UK car parc is an emerging challenge. With increased costs associated with ownership, notably the phase out of new IC cars in favour of B-EV technology, the car parc is likely to start to shrink towards the end of the decade. Service providers will face, for the first time, a smaller market in which to operate.
Consumers want more than just price when taking out assistance and recovery insurance. With a market that is seeking to go beyond support in distress situations, these growing demands are expected to open up further opportunities for service providers over the long-term to add value and develop their service offer.
Vehicle Recovery and Assistance Market Statistics
- UK vehicle recovery market size: Inflationary pressures and a recovery in memberships have bolstered revenues post-pandemic, with the UK vehicle recovery reaching an estimated £2,089m in 2024.
- UK vehicle recovery market share:Â AA and RAC remain the market leaders in the UK vehicle recovery market, with both increasing their market share in 2023-24.
UK Vehicle Assistance and Recovery Market Report – What’s Inside?
Key Topics Analysed in the Report
- The short-, medium- and long-term impact, and effect, of the aftermath of the cost of living crisis and ensuing inflationary and expenditure pressures on vehicle assistance and recovery.
- Size of the market, key drivers impacting it and its forecast development over the coming five years.
- Company and brand shares, competitive strategies and advertising initiatives as well as the main channels used for purchasing vehicle assistance and recovery policies.
- Consumer preferences for assistance and recovery companies and channels used for acquiring support.
- Consumer thoughts on the importance of price and non-price factors, interest in additional services as well as future plans for holding cover.
Report Scope
This report covers vehicle assistance and recovery services available to car owners, whether on a direct or indirect basis, as is common in the marketplace.
The value of the vehicle assistance and recovery services market is made up of fees from memberships, paid either directly or indirectly, as well as revenue from the ad hoc sector. Membership fees comprise any premiums paid to ensure that a vehicle or person is insured in the event of a breakdown. Fees can be paid either directly by the consumer to the recovery company or indirectly through an intermediary that will offer insurance to the consumer, often as part of a bundle of services.
The value of the ad hoc sector is revenue from motorists who are not members of an organisation and therefore use the services of a recovery operator, normally an independent, on an informal or ad hoc basis.
Meet the Expert Behind the Analysis
Service enhancement dominates activity as providers look to take advantage of both recovery of the sector and the growing demands of customers and stakeholders.
Utku Tansel
Senior Analyst
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Executive Summary
- Opportunities for the vehicle assistance and recovery market
- Take advantage of partnership opportunities
- Benefit from the importance of non-price factors over price
- Exploit the desire of those looking to extend their level of cover
- Market dynamics and outlook
- Market size & forecast
- The five year outlook for vehicle assistance and recovery services
- Revenues – stronger growth forecast after difficulties posed by the pandemic
- Memberships – stagnation in car parc growth supports need towards diversification
- Graph 1: market size for vehicle assistance and recovery services, m members, 2019-24
- Meeting the needs of B-EVs is likely to result in the exit of some from the market
- What consumers want and why
- Consumers want: more than just price
- Consumers want: to go beyond assistance and recovery
- Consumers want: flexibility from service providers
- Innovation and marketing
- Digital capabilities are increasingly being strengthened
- Delivery of service isn’t being overlooked as vendors look ahead
- The appetite for advertising returns success can come in other ways
- Video and sharper visuals from digital and outdoor present a growing challenge for television
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Market Dynamics
- Market size
- Inflationary pressures and a recovery in memberships bolster revenues post-pandemic
- Memberships are expected to reach a new high in 2024
- Average premiums are benefitting from initiatives to add value to memberships
- Market forecast
- Higher premiums will be a major driver for revenue growth
- Moves by service providers to diversify will be a key driver in stimulating revenue growth
- Market segmentation
- Revenues from annual memberships dominate
- Demand for fully comprehensive policies supports diversification moves by major players
- Graph 2: vehicle assistance and recovery market, by policy type, revenues including IPT, 2023
- Purchasing direct remains popular
- Market share
- Ability to add value proves successful for the AA
- Desire to generate more from individual customers is growing…
- …with Direct Line Group making good progress in revenue per member
- Graph 3: estimated revenue per member, including IPT, 2024
- Strategies being pursued by the AA and RAC will likely raise premiums
- RAC and AA are estimated to be side-by-side when it comes to members
- RAC’s push to be a major B2B player is presenting the AA with a challenge
- Call Assist is well placed alongside smaller players to benefit from its B2C exposure
- Graph 4: company share those outside of the big three (RAC, AA, Direct Line Group), estimated memberships, 2024 (est)
- Distribution channels
- Over half of policies have been acquired for free or bundled with another product or service
- Boost to online during pandemic challenged as normality returns
- Graph 5: key channels used for acquiring vehicle assistance and recovery insurance, 2020, 2022 and 2024
- Obtaining insurance for free or at a discount is important for many
- Market drivers
- Consumer expenditure hit by inflationary pressures…
- Graph 6: household consumption, quarterly change, 2023-24
- …despite price stability returning to the economy
- Disappointing financial confidence illustrates continuing economic challenges
- Graph 7: index of financial confidence in the next year, 2020-24
- Stagnation of the car parc is a growing concern…
- …although an ageing car parc does present opportunities
- Graph 8: car parc age, 2019 & 2023
- Recovery evident for car sales after pandemic difficulties
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What Consumers Want and Why
- Presence of vehicle assistance of recovery companies
- The AA leads amongst consumers
- Graph 9: ownership of vehicle assistance and recovery products, by organisation, 2024
- Green Flag is well placed with older adults
- LV= Britannia has strong appeal with drivers in London
- AA remains dominant amongst consumers as smaller players see growth
- Graph 10: ownership of vehicle assistance and recovery products, by organisation, 2022-24
- How cover is acquired
- Online and bundled insurance vie for leadership as the preferred way to acquire cover
- Graph 11: key ways by which current assistance and recovery insurance for your main vehicle was acquired, 2024
- Understanding channel preferences shouldn’t be overlooked
- Graph 12: key ways by which current assistance and recovery insurance for your main vehicle was acquired, by gender, 2024
- Online is currently proving successful for Green Flag…
- …with 45% of its members acquiring policies online
- Importance of price and non-price factors
- Assistance and recovery companies need to excel at a number of areas
- Speed of response and reliability are key non-price factors sought
- Graph 13: importance of price and non price factors, 2024
- Women are more likely to be wanting more
- Graph 14: any importance of price and non-price factors, by gender, 2024
- Exploiting opportunities to raise a brands’ profile in urban areas shouldn’t be overlooked
- Getting physical in cities offers its advantages
- Hybrid owners want evidence of committment to their cause
- Role of additional services when choosing a service provider
- Interest in ways of minimising costs are growing
- Graph 15: role of additional services when choosing a assistance and recovery provider, 2023 and 2024
- Discounts for vehicle parts are of most interest to those less affluent
- Graph 16: role of additional services when choosing a assistance and recovery provider, by socio economic group, 2024
- Basic assistance and recovery service appeals more to older drivers
- Graph 17: role of additional services when choosing an assistance and recovery provider, by age, 2024
- Ethnic minorities present a good market for trialling additional services
- Graph 18: role of additional services when choosing an assistance and recovery provider among ethnic minorities*, 2024
- Future plans for assistance and recovery cover
- Opportunities to enhance cover at renewal shouldn’t be overlooked
- Graph 19: future plans for holding vehicle assistance and recovery insurance, 2023 and 2024
- Focused support is likely to prove helpful in encouraging upgrades
- Graph 20: future plans for holding vehicle assistance and recovery insurance, upgrade policy, 2024
- Demands of hybrid owners necessitate a deeper understanding of needs
- Graph 21: future plans for holding vehicle assistance and recovery insurance, by type of vehicle, 2024
- Smaller providers can succeed through partnering
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Innovation And Marketing Trends
- Competitive strategies
- Service offer remains key route for differentiation…
- …with investment helping to challenge the tactical role of price
- Both the AA and RAC are keen to promote a range of services to their members
- Partnerships offer a way to extend market reach
- Challengers to the AA are relying on specific sales channels
- Launch activity and innovation
- Digital is becoming a battleground for the big two
- Investment ‘on the ground’ isn’t being ignored
- Wider support via SMR continues a business line
- Advertising and marketing activity
- Advertising spend expected to recover in 2024
- Graph 22: total above-the-line, online display and direct mail advertising expenditure on vehicle assistance and recovery services, 2020-24
- AA is by far the largest investor towards advertising
- AA spends more than double its nearest rival, Green Flag
- Graph 23: total above-the-line, online display and direct mail advertising expenditure on vehicle assistance and recovery services, by advertiser, 2024
- AA stresses reassurance
- Only the best with Green Flag
- Desire to reach a wide audience favours the use of television
- Graph 24: total above-the-line, online display and direct mail advertising expenditure on vehicle assistance and recovery services, by media, 2022 & 2024
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Brand Research
- AA leads on both trust and differentiation
- Green Flag suffers from lower awareness and use compared to other key brands
- AA and RAC benefit from their close association with trust and innovation
- Direct Line likely hampered from perception of being boring and unethical
- Big 3 (AA, RAC and Green Flag) exhibit different micro personalities
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Appendix
- Supplementary data
- Revenues rebound after falling back during the pandemic
- Memberships see a similar improvement
- Average premiums are expected to reach new high in 2024
- Direct Line Group has the highest average premium of the big three
- AA maintains leading position in the market
- RAC and AA fight it out for leadership of memberships
- Free and bundled policies lead despite the recent challenge from online
- Number of licensed cars is stagnating
- Over three in 10 cars were 12 or more years old in 2023
- New and used car sales have both rebounded since 2023
- As the AA reduces investment so smaller companies increase their profile
- Market forecast data and methodology
- Market forecast and prediction intervals (value)
- Forecast methodology
- Report scope and definitions
- Market definition
- Abbreviations and terms
- Consumer research methodology
- Nielsen Ad Intel coverage
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