What you need to know
The vehicle recovery services market is sizeable and is estimated to reach £1.67 billion in 2015. Recently the sector has seen growth both in its value and in the number of members holding policies with the latter standing at an estimated 30.3 million members in 2015. Various reasons are behind this strong growth with the recovery of the UK economy and the buoyant car market, especially for new cars, both notable.
Internally the market is dominated by the purchase of regular policies. These account for over four fifths of the market or £1.32 billion in 2014. Ad hoc policies account for the remainder of sales. Price competition is a major factor within the market and is evident at all levels but especially in the entry-level fix at roadside sector.
The market is dominated by three large companies (AA, RAC and Green Flag). All three are established in the sector and offer a range of services. Smaller rivals are numerous and include motor clubs and companies offering vehicle recovery services alongside financial products as well as retailers and car manufacturers. Mintel’s consumer research suggests they are currently gaining share.
Our research shows that 85% of vehicle owners have vehicle recovery insurance with peace of mind the main reason given by those with insurance for taking out a policy. Ability to fix a vehicle at the roadside is overall the most important factor overall when it comes to the purchase of insurance (65%) followed by competitive prices (62%) and speed of response (61%).
Despite such a high level of ownership of vehicle recovery insurance, actually calling upon assistance is relatively low. Some 44% with policies say they have never needed the most basic assistance, namely fix at the roadside.
Scope of this report
This report covers vehicle breakdown recovery services available to private car owners, whether on a direct or indirect basis, as is common in the marketplace.
The value of the vehicle 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 direct by the consumer to the recovery company or indirectly through an intermediary who 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.
