Sales of service plans have increased by 20% year-on-year as dealers improve at promoting their benefits and closing sales.

The statistics from The Warranty Group show that despite a fall in the used car market during Easter, service plan penetration rates are still increasing.

Ian Simpson, The Warranty group sales and marketing director, said: “Despite the difficult used car market, service plan unit sales are rising, indicating that penetration is increasing still further.

“To us, this illustrates two points – that customer awareness of service plans as a product is probably growing and that dealers are getting better at promoting their benefits and closing sales.”

Simpson believes the fixed cost approach to motoring provided by a service plan has considerable appeal for consumers at this point in time.

He said: “Consumer confidence might now be at its lowest ebb since the recession of 2008-2009, and the majority of used car customers are looking for products that can help them avoid unexpected costs.”