Extended service contracts (ESCs) offered by non-Big 3 providers outsell those of the automaker subsidiaries themselves, according to a dealer survey made by veteran CPA Carl Woodward of Bloomington, Ill.

Woodward said that responses from Big 3 dealers in 25 states showed that ESC purchase penetration of new-vehicle and used-vehicle sales averaged 35 percent -- corresponding to national levels since basic new-vehicle warranties were increased by most brands to three years or 36,000 miles, and even more for luxury models.

DaimlerChrysler dealers led in the percentages of ESCs sold to vehicle buyers, with 82 percent, of which non-Big 3 contracts accounted for 44 percent and Chrysler’s agreement, 38 percent. Ford dealers had a total of 70 percent penetration for contract sales, 39 percent to outside providers and 31 percent to the automaker; GM dealers had 59 percent, 31 percent to independent brands and 28 percent to GM’s inhouse subsidiary.

The strength of the outside contract providers was a surprise to Woodward, a member of the AutoCPA Group. “Some dealers want to obtain a service contract company that can train, assist and guide them in being more effective in selling these contracts,” he said.

ESCs are sold by the finance and insurance offices of dealerships. They provide vehicle service coverage after basic warranty limits are reached and range in price from about $500 for a minimum package to $1,500 for a maximum extension.

A typical ESC furnishes free road aid and towing service, with overnight stays if needed, for the life of the contract. Most ESCs are transferable to second vehicle owners.

The Woodward survey showed top independent service contract sellers were JM&A Group of Fort Lauderdale, Fla., and AON Corp.’s Resource Automotive and First Extended Group of Glenview, Ill.