General Motors tried to make dealers pitch its extended service contract to every customer but gave up after strong opposition from dealers. Several automakers have implemented policies and incentives that more aggressively push dealers to sell factory plans.

The Chrysler Group requires dealers to tell customers when they are purchasing non-factory service plans, according to Automotive News. Stores that don't do this can lose their Five Star status. Nissan North America requires underperformers to sell its warranties to a percentage of customers in order to keep their franchises. According to dealers, Subaru makes dealers sell factory plans to 20 percent of new car buyers to qualify for co-op advertising money.

In Virginia, dealers lobbied to forbid automakers from dictating which service plans they could sell, and won. Extended warranties are a mainstay for dealers, and many of them favor non-factory warranties because they bring in more F&I profit than factory ones. At the same time, the percentage of service contract purchasers has been steadily declining.

A reinsurance executive estimated that factory warranties cost dealers 25 to 30 percent more than independent warranties. The executive told Automotive News that of the $1,410 GM charges dealers for a warranty on a full-size Chevy pickup, the automaker keeps about $610.

However, factory warranty providers have generally been more dependable than independents. Several independent service contract providers, including Reliance Insurance Co. and National Warranty Insurance Co., have gone under in recent years. Dealers had to take responsibility for many unpaid claims.