I n s i d e N e w s a n d I n f o r m a t i o n f o r D e a l e r s a n d A g e n t s

www.UnitedCarCare.comwww.fandiseminar.com

Fall/Winter 2010 Volume 24

A holiday tradition, United Car Care contributed to the Adopt-A-Family program, which was started by the Salvation Army to help families in crisis during the holidays and in times of need.

The program gives organizations, groups and churches the chance to provide help to a select family of their choosing, according to the Salvation Army’s website. By sponsoring a family, these groups help make the holidays for those in need that much more special and blessed.

This year, UCC adopted a family through the Arapahoe County Adopt-A-Family program and, once matched, received a wish list from the five children (ranging from toddlers to teens), including their first names, ages, clothing sizes and other requested items.

Many people were touched along the way by United Car Care’s generosity, said Pam Franks, UCC Sales & Marketing Manager, from the cashiers in the store checkout lines when they learned who the purchases were for to those who donated hours of their personal time picking out gifts with donated money. Not to mention all

the UCC employees who happily wrapped all the gifts!

“What I like about this program is that the families, who are victims of abuse or neglect, are chosen by their caseworker and it is entirely need-based,” said Franks. “(With this program), we are assured that our gifts go to a family that is truly in need.”

With this year’s adoption, UCC employees were able to donate enough to afford several gifts for each of the five children in the family.

The two oldest boys got skateboards, helmets and pads, baseball mitts, bats, footballs and action figures. The youngest girl was given Barbie dolls, stuffed animals, books, and a Baby Alive doll who giggles when you walk near her. The youngest boy received a bike, Tonka trucks and a police car that sounds its siren when a button is pressed.

“What a gift we all received to have been a part of this,” Franks said.

Established 1984

Look for a digital copy of our newsletter at:www.UnitedCarCare.com

Inside This Issue:

F & I Conference

Future Cars

The Tax Man Cometh!

F&I From the Box

Generation Y

and more.

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React. Don’t Overreact.. – From the President

Established 1984

The state of Washington may be nationally recognized for its apples, but at United Car Care, we’ve found business partners there sweeter than the fruit.

We’ve had the privilege of doing business with Washington auto dealers for over fifteen years. Currently, we manage and maintain over 47,000 active service contracts in the state, with a promising forecast for business development in 2011 and beyond.

Since our inception in 1984, UCC has realized over and over how important good, solid business relationships are to the backbone and survival of a company. Our business wasn’t built with several hundred employees scattered across the country like our competition.

Instead, we chose a select group of home-grown, experienced automobile marketing people who serve as a general agency for UCC. Their name is Olympic Dealer Marketing (ODM). Bill Gusa, Jim Mueller, and Ian Fee are the financial and stabilizing forces behind ODM.

These folks are in the trenches everyday, making a name for themselves and adding new business. But more importantly, they offer hands-on service to each of their accounts.

“Earning new business is always rewarding, but the true goal of ODM and its people is maintaining and servicing their existing dealer base,” says Gusa.

Even more exciting are the periodic accolades that ODM dealers achieve. Most recently, Kent Chaplin, and his three sons, Nick, Tyson and Brandon who run the Chaplin Subaru store in

Bellevue, Washington, achieved an award for being rated the best car dealership in western Washington by Evening Magazine and KING 5 News.

Every year, the Washington-based magazine and news station team up to hand out several awards for the best website, gym, barbecue spot, and the best auto dealership, among a long list of other things.

Nick Chaplin of Chaplin’s Subaru in Bellevue, Washington, said his team campaigned a lot this year to win this type of recognition.

“It’s really a cool deal,” Chaplin said. “A lot of dealerships get involved and campaign for it. It’s great publicity for us, and those people who vote for us as being the best let us know we are doing something right.”

Evening Magazine and KING 5 news presented Chaplin’s with a recognition plaque for winning this year’s award.

“There were a lot of dealerships that we beat out,” said Chaplin. “Coming out on top over that competition makes us feel pretty good.”

United Car Care congratulates Chaplin’s Subaru of Bellevue and thanks Olympic Dealer Marketing for bringing us such a stellar client!

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Upcoming Dates

F&I Conference 2010Established 1984

January

7thWebcast & Webinar - Leading Questions that Direct the Interview

21stWebcast & Webinar - Get Confirmation with “Tie Downs” and Hang Them at the End of the Statement

February

4th - 7th NADA in San Francisco

11thWebcast & Webinar - How to Create a Selling Climate

25thWebcast & Webinar - What Am I Doing Right?

March

8th & 9thAgent Summit Conference in Las Vegas

11thWebcast & Webinar - Buying is Not a Spectator Sport

25th Webcast & Webinar - Always Prepare for the Close

www.facebook.com/fnicoach www.fnicoach.com

Having just returned from the September F&I Conference in Las Vegas, here are some of the industry-wide items that were discussed:

More and more technology is aiming itself toward “Generation Y” and others who rely and indulge in technology every day. Therefore, using it in the automotive industry as much as possible is the mission at hand.

Some of the industry’s largest retail operators are moving toward a totally paperless transaction. We here at United Car Care recognize the advantage to the consumer, dealer and agent in moving our service contract business to paperless technology.

We will begin by meeting with companies that can assist us in

integrating information from the Dealer Management System (DMS) with UCC’s CARE Rater and electronic contract.

This new technology will allow UCC to include additional features in the CARE Rater. But, in order for us to enter into the right partnership, we want to make sure we are covering all of the DMS systems that are out there.

Lastly, UCC is looking at new product options that are more profitable for dealers and present more opportunity for our agents. We will be talking about some of these options in the near future and soliciting some input from our agents who are in the field every day.

Written by John Vecchioni, UCC Director of Sales & Marketing

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Future of Cars

Established 1984

New technologies are on the cusp of implementation when it comes to the future of the automobile.

Currently, new energy sources and materials are in production, which are intended to make cars safer, more sustainable and energy efficient, according to Wikipedia’s website. The site says that today’s cars are intended to be more energy-saving, fuel-efficient machines over the next several years.

According to About.com, several new internal and external specifications are already on the drawing board, if not in many models already. These include rear-seat DVD players, side airbags, remoteless key entry, iPod docks and built-in Blue Tooth capabilities, and continued upgrades to GPS navigation systems.

Various Honda models are already equipped with rear-seat ventilation ducts, optimized climate control buttons and hands-free Bluetooth equipment, states www.automobilesreview.com. Such features help raise the overall appeal of the car itself.

Automotive research expert Jack Uldrich recently posted a blog online about the future of automobiles and some trends he predicts for the next five to ten years –

• Smart materials, including such things as self-cleaning glass, scratch resistant panels and self-healing rubber.

• Better car batteries – including batteries that can power a car up to 400 miles and need only minutes to recharge.

• Robotics. This could mean self-driving vehicles which might appear sometime in the next decade. But, in order for such robotics to be possible, Uldrich says “We would need to see great advances in sensors and GPS technology.”

• Computers, software and speech recognition improvements, which will directly impact how future cars are designed and driven.

BuyingAdvice.com also mentions robot cars. With the help of improved safety, navigation, communication and fuel efficiency, the website states that car manufacturers plan to create vehicles that do not need human or remote control. Again, advanced GPS, laser sensors and video imaging will have to be introduced before any of this is possible.

Besides updated software, many auto engineers say gasoline will be extinct – likely replaced by hydrogen, which is the most plentiful and available element on Earth that gives excellent fuel efficiency without air pollution.

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Generation YEstablished 1984

More and more, new technology is being integrated in automobiles. This integration can be linked to today’s Generation Y (Gen Y) – teen to 27-year-old auto consumers who look for such technology when strolling through a dealership’s showroom. Many dealerships are changing the way they market their vehicles in order to reach these younger buyers.

Wikipedia states that the characteristics of Gen Y, depending on social and economic conditions, include increased use and familiarity with communications, media and digital technology. The website says Gen Y consumers are those who have grown up in a world that revolves around the Web, cell phones and iPods.

Even on the showroom floor, dealers are using iPads to transfer information gathered from the customer and sending that information directly to other iPads in the hands of finance and insurance people. This way, the F&I staff is a step ahead before the customer even comes into their office.

Auto professionals seem to agree that Gen Y may account for one in four vehicle sales this year. In less than 10 years, they will represent as much as 40 percent of the car market, according to Autotropolis.com.

Because of that, dealerships are focusing on “customer-relationship” marketing and aiming at younger consumers, according to a 2005 article in Automotive Dealer Advertising. “Gen Y has a constantly changing media appetite and is easily bored. The growth of (new) technology is something that’s looming on the horizon and something that we need to address fairly quickly.”

What is Gen Y looking for when buying a car? Gadgets. Toys. Blue Tooth capability. GPS Navigation systems. iPod Docking stations. These are the things that Gen Y will spend more time scouting out when buying a car, as opposed to size and overall price. However, other auto sources say that Gen Y just wants vehicles that are unlike any other. They want cars with different interior textures, brighter colors and more personality, fun and variety.

A recent report on Autoblog.com said that Gen Y wants lots of electronic gadgetry in cars – “We expect that all computing power will improve fuel mileage and environmental friendliness.”

Along with their interest in new technology, Gen Y is also a “greener” and more eco-friendly group. Dealerships are seeing increased sales of trucks and cars that are better for the environment, such as electric cars, Hybrids and clean diesels. Gen Y is even willing to pay out more money for such vehicles. They are more interested in fuel economy and operating costs.

YGEN

JohnMathewson– Claims Adjuster

New faces at UCC

Nestled back in the heart of the United Car Care claims department, a new face can be seen among the adjusters. John Mathewson officially joined UCC at the beginning of November.

“I had worked with UCC on previous claims throughout the last nine years as a service advisor with Audi,” he said.

When asked what the company can expect from him in the future, John answered, “UCC can expect someone friendly, hard-working and dependable down the road.”

On his days off, Mathewson tries to spend a lot of time with his girlfriend. He also enjoys camping, hiking, golfing, listening to music, watching movies and cooking.

UCC Web-Training: United Car Care is pleased to announce Webinar, Podcast and Webcast training that is set up to specifically meet and address the needs of each individual store.

$449 per year, per rooftop www.fandiseminar.com1-800-571-6412or check us out on facebookwww.facebook.com/fnicoach

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The Tax Man Cometh!Established 1984

As fall turns into winter, some of you are probably following your favorite football team or looking forward to the upcoming holiday season. One date on the horizon that may lead to some consternation is January 1, 2011. Please, allow me to explain.

Unless Congress acts quickly, beginning January 1, 2011, taxes paid on dividends are increasing. Dramatically. Regrettably, I do not foresee a “lame duck” Congress acting on this issue prior to year end. Therefore, the tax cuts enacted by President Bush will expire December 31, 2010.

Dividend income is classified as any taxable distribution that is not treated as a long term capital gain. Taxes on dividends are commonly paid on distributions from regular “C” corporations to their stockholders.

There are two types of dividends, ordinary and qualified.

An ordinary dividend is any dividend that does not meet the criteria of a qualified dividend. The tax on an ordinary dividend is the same as a taxpayer’s income tax bracket. For example, if you are in the 35% income tax bracket, you will pay a 35% dividend tax on that distribution.

A qualified dividend is a dividend that must be paid between January 1, 2003 and December 31, 2010. The qualified dividend is paid by a U.S. corporation located in a U.S. possession, by a foreign corporation located in a country that is eligible for benefits under a U.S. tax treaty that meets certain criteria, or on a foreign corporation’s stock that can be readily traded on an established U.S. stock market. Finally, the

stock paying dividend must be held for at least 61 days during the 120 day period beginning 60 days before the ex-dividend date, and ending 59 days after the ex-dividend date. The ex-dividend date is the date on or after which the owner of a particular stock would not be entitled to receive a recently declared dividend.

For dividends that meet the criteria, the effective qualified dividend tax rate is determined by the date on which the dividend was paid and the taxpayer’s income tax bracket. After December 31, 2010, all dividends will be taxed as ordinary income, and ordinary income tax rates return to those in effect in 2000. Ouch!

Let us review the tax rates for both ordinary and qualified dividends through the end of 2010.

Unfortunately, the only two certainties in life are death and taxes.

Lastly, considering that time is of the essence, I strongly recommend that you contact your tax

professional to ensure that you take advantage of the rates currently in place, if possible. I am also available to discuss your personal situation, should you find necessary.

Hold tight to your wallet!

Written by Bernie Radochonski II, CPAChief Financial Officer / Treasurerbrado@unitedcarcare.com

2010

Ordinary Income Tax Rate Ordinary Dividend Tax Rate Qualified Dividend Tax Rate10% 10% 0%15% 15% 0%25% 25% 15%28% 28% 15%33% 33% 15%35% 35% 15%

Now, the bad news… Effective January 1, 2011.

2011

Ordinary Income Tax Rate Ordinary Dividend Tax Rate Qualified Dividend Tax Rate15% 15% 15%28% 28% 28%31% 31% 31%36% 36% 36%39.6% 39.6% 39.6%

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F&I From The Box: “The Interview”Established 1984

From my years of being in the (Finance & Insurance) box, I’ve found that consistency is the key.

I always greet and do a pre-interview with the clients at the salesperson’s desk. This brings down their anxiety factor. I also introduce myself as the “paperwork guy,” as opposed to the business manager or finance manager, which sets the clients at ease.

I will start by saying, “Mr. and Mrs. Customer, my number one responsibility is to make sure we handle your DMV paperwork properly. I will review all of the information your sales representative has written up on the purchase agreement to make sure it is correct. Then, we will talk about how you are going to pay for it.”

Here’s where you find out your clients’ hot buttons. While you are getting all of the correct information for the registration and title, ask them about their driving habits. “How long do you keep your vehicles? How many miles do you drive per year?” This will only take a few minutes and will help you prepare a warranty presentation that best fits their driving habits.

You then excuse yourself by telling the clients, “Give me just a couple of minutes, as I am going to my office to plug all the information into the computer and figure out your exact payments.”

Once you are in your office, load your menu, print it out and then bring in the clients. Start by saying, “Make yourselves comfortable. This will only take about 10 minutes.” Present your products enthusiastically and to the point. Ask

them if they understood everything and what they thought.

They will either pick a package or say, “No, thank you.” If you get a “No, thank you,” I always reply, “Do you mind if I make a suggestion?” I have never had a client say no. You then zero in on one package and say, “Mr. and Mrs. Customer, my boss would not like to hear me say this, but maybe you should take another look at package three and forego the first two. You then have the full coverage warranty and complete rust protection.”

I have had much success using these techniques and word tracks throughout my career.

Written by Jim Mushock of Gault Chevrolet in NY

United Car Care, Inc.P.O. Box 3988 Greenwood Village, CO 80155-3988 www.unitedcarcare.com

Established 1984