Santander, the ambitious Spanish bank that last year bought lenders Alliance and Leicester and Bradford & Bingley, has launched a bid to acquire a major share of the expanding service plan sector.

The Warranty Group (TWG) has been appointed by Santander Consumer Finance as its partner to supply service plans to more than 6,000 dealers to sell the bank’s new and used car finance.

Demand for service plans provided by TWG and other companies has grown during the recession.

TWG will provide training for Santander’s dealer network.

Andy Green, Santander Consumer Finance marketing director, said: “Service plans are becoming an increasingly important part of the dealer point-of-sale product mix alongside warranty and GAP.

"During a recession they allow people to budget for servicing well into the future.”

Routine car servicing is paid for by monthly direct debit. The cost is based on the length of time owners intend to keep cars.

Green said: “Service plans minimise the chances of losing servicing and other aftersales business to fast fits or independent garages, strengthening dealers’ link to customers.”

Ian Simpson, TWG sales and marketing director, said sales of service plans had increased rapidly over the past year and a number of major deals had been signed with dealer groups.

Angela Barrow, operations director at service provider Emac, said: “In this emerging sector, success requires the capacity to deliver support to sales, aftersales and retailer leadership.

“The news that TWG has formed a partnership with Consumer Santander is an interesting step and it is encouraging to see more people becoming interested in the value of service plans.”