Extended warranty provider Autoguard has entered a new phase of growth signing a three-year deal with industry insurer UK General to provide breakdown cover to customers of independent dealers.

The deal, thought to be unique in the warranty market, enables Autoguard to offer a mechanical breakdown warranty designed for independent motor traders and small dealer groups.

Autoguard, launched four years ago, generates £4 million of warranty premiums through its 700 motor dealer clients and employs 40 staff at its Surrey headquarters.

Rob Dockerill, director and founder of Autoguard, said: "With increasing competition in the retail motor business, smaller motor dealers have to improve the service they provide to customers. Extended warranty is one area where they can make signiciant improvements and give the customer added reassurance that they are protecting their purchase.

"That reassurance and customer care feeds back into building longer term customer relationships and, potentially, repeat business. And, in today's digital world, customer satisfaction is not only in the customer's mind but also talked about in online review sites, making the need for happy customers even more essential."

Autoguard has worked with UK General to develop the type of warranty cover drivers need based on feedback from its dealer clients.

Dockerill added: "Consumers today have higher expectations when they buy a car and the warranty market needs to respond to those changing customer demands. By working in partnership with dealers we can build mutually beneficial relationships and help continue the organic growth we've achieved in the past."