Welcome and thank you for joining me today.

THE PURPOSE OF TODAY’S SEMINAR IS TO: 1.Create a better understanding of the importance of the manufacturer’s Extended Warranty for your customer, the dealership and for you. 2.Introduce to you the Manufacturers’ X-tended Warranty Refund Program. WHY? 1.You are a professional salesperson and we want to instill confidence in you regarding the Extended Warranty being offered to YOUR customers in the Business Office. 2.You have the biggest influence over your customers’ buying decisions in the Business Office. We would like you to recommend the Extended Warranty when your customers ask your opinion.

MODULE ONE: THE IMPORTANCE OF THE DEALERSHIP BUSINESS OFFICE

NEW VEHICLE DEPARTMENT SERVICE DEPARTMENT PARTS DEPARTMENT USED VEHICLE DEPARTMENT BODY SHOP BUSINESS OFFICE GENERATES 25% to 50% OF THE DEALERSHIP’S VARIABLE GROSS PROFIT

THE SALE OF A NEW CAR M.S.R.P.: AVAILABLE GROSS PROFIT: DEALER INVOICE: SALE PRICE: GROSS PROFIT: $ 34,955 $ 3,500 (5 -13%) $ 31,455 $33,200 (1,755 DISC) $ 1,745

THE SALE OF A NEW CAR GROSS PROFIT: $ 1,745 SUBTRACT: SALESPERSON’S COMMISSION MANAGEMENT SALARIES ACCOUNTING SALARIES CLERICAL / SUPPORT SALARIES MORTGAGE ON LAND and BUILDING MARKETING / ADVERTISING INTEREST ON THE INVENTORY FIXED / VARIABLE EXPENSES = $1 - $350 NET PROFIT / 1% OF THE SALE PRICE

THE BUSINESS OFFICE DEALERSHIPS HEAVILY DEPEND ON THE PROFITS EARNED IN THE BUSINESS OFFICE FOR OVERALL DEALERSHIP PROFITABILITY. DEALER PRINCIPALS MEASURE THE BUSINESS OFFICE’S PRODUCT ‘PENETRATION’ AND THE ‘AVERAGE GROSS PROFIT PER VEHCILE SOLD’.

THE BUSINESS OFFICE GROSS PROFITS ARE EARNED FROM THE SALE OF: PRIMARY (CORE) PRODUCTS A - DEALER PLAN FINANCING B - EXTENDED SERVICE PLANS C - CHEMICAL PROTECTION D - CREDIT INSURANCES SECONDARY PRODUCTS E - THEFT DETERRENT SYSTEMS F - VEHICLE ACCESSORIES G - LOSS OF INCOME INSURANCE H - CRITICAL ILLNESS INSURANCE I - GAP PROTECTION

250 ANNUAL RETAIL DELIVERIES X $ 200 / VEHICLE = $ 50,000 GROSS 250 ANNUAL RETAIL DELIVERIES X $ 450 / VEHICLE = $ 112,500 GROSS 250 ANNUAL RETAIL DELIVERIES X $ 600 / VEHICLE = $ 150,000 GROSS 250 ANNUAL RETAIL DELIVERIES X $1000 / VEHICLE =$ 250,000 GROSS 500 ANNUAL RETAIL DELIVERIES X $ 200 / VEHICLE = $ 100,000 GROSS 500 ANNUAL RETAIL DELIVERIES X $ 450 / VEHICLE = $ 225,000 GROSS 500 ANNUAL RETAIL DELIVERIES X $ 600 / VEHICLE = $ 300,000 GROSS 500 ANNUAL RETAIL DELIVERIES X $1000 / VEHICLE =$ 500,000 GROSS 1000 ANNUAL RETAIL DELIVERIES X $ 200 / VEHICLE = $ 200,000 GROSS 1000 ANNUAL RETAIL DELIVERIES X $ 450 / VEHICLE = $ 450,000 GROSS 1000 ANNUAL RETAIL DELIVERIES X $ 600 / VEHICLE = $ 600,000 GROSS 1000 ANNUAL RETAIL DELIVERIES X $1000 / VEHICLE =$1,000,000 GROSS A LOOK AT ‘AVERAGE’ GROSS PROFIT PER VEHICLE SOLD’

MODULE TWO: EXTENDED WARRANTIES

Whether purchasing or leasing a new or used vehicle, your customer has the opportunity to protect their vehicle by investing in an Extended Warranty Plan. An Extended Warranty (also known as a vehicle service contract or extended service agreement) is a MECHANICAL INSURANCE PLAN. It allows your customer to lengthen and enhance the manufacturer’s warranty on a new vehicle, or improve the warranty offered by a dealership on a used vehicle.

Many different types of Extended Warranty Plans are available offering varying degrees of mechanical coverage with various term and kilometre allowances. Examples of plans include: 4 years or km’s (whichever comes first) 4 years or km’s 4 years or km’s 5 years or km’s 5 years or km’s 5 years or km’s 6 years or km’s 6 years or km’s 6 years or km’s 7 years or km’s 7 years or km’s

Extended Warranties allow your customer to lengthen and enhance the new vehicle warranty and pre-pay future rising repair costs in today’s dollars. The plans pay for the costs of genuine manufacturer’s replacement parts and a qualified technician’s labor on the mechanical, electrical, computerized and high tech components of their vehicle at any of your retail dealerships right across North America. Extended Warranties also includes a terrific roadside assistance package, as well as numerous other non-mechanical benefits.

24 HOUR TOWING and ROAD SERVICE FLAT TIRE ASSISTANCE FUEL DELIVERY LOST KEY and LOCKOUT SERVICE TIRE ROAD HAZARD COVERAGE TRIP INTERRUPTION COVERAGE REPLACEMENT CAR RENTAL

O COMPREHENSIVE COVERAGE O Optional EXTENDED WARRANTY COMPREHENSIVE COVERAGE FOR UP TO 7 YEARS WITH ROADSIDE ASSISTANCE and TRIP INTERRUPTION SERVICES COMPREHENSIVE COVERAGE BEYOND THE MANUFACTURER’S COVERAGE POWERTRAIN COVERAGE MANUFACTURER’S WARRANTY

O COMPREHENSIVE COVERAGE COMPREHENSIVE COVERAGE BEYOND THE MANUFACTURER’S COVERAGE O Optional EXTENDED WARRANTY COMPREHENSIVE COVERAGE FOR UP TO 7 YEARS WITH ROADSIDE ASSISTANCE and TRIP INTERRUPTION SERVICES

MANUFACTURER’S WARRANTY O COMPREHENSIVE COVERAGE COMPREHENSIVE COVERAGE BEYOND THE MANUFACTURER’S COVERAGE O Optional EXTENDED WARRANTY COMPREHENSIVE COVERAGE FOR UP TO 7 YEARS WITH ROADSIDE ASSISTANCE and TRIP INTERRUPTION SERVICES

MECHANICAL PROTECTION “An engine on today’s vehicle can cost anywhere from $5,000 to $15,000. Protect your customer from unplanned repair and replacement expenses.”  Repair cost protection to the mechanical, electrical and computerized components of the vehicle  Protects from unplanned repair expenses  Inflation ‘fighter’ providing protection against future rising service costs  Unlimited claims permitted  Rental / alternate transportation allowances  Increases vehicle resale value  Service available at retail facilities across Canada and the United States  Fully transferable to a second owner 

7 yr 6 yr 5 yr 4 yr 3 yr 2 yr 1 yr 20, k 40, k 60, k 80, k 100, k 120, k 140, k 160, k Factory Warranty REMAINING PAYMENTS AFTER THE WARRANTY EXPIRES Needed Coverage Doesn’t it make sense to have comprehensive coverage for the term of a loan? Match the warranty coverage with the term of the loan.

PAYMENT COMPREHENSIVE WARRANTY COVERAGE REMAINING PAYMENTS AFTER THE WARRANTY EXPIRES Would your customer be comfortable making a loan payment and paying for a repair at the same time?

An investment in an Extended Warranty means that your customer is pre-paying 3 or 4 average repairs in today’s dollars after the manufacturer’s warranty expires. Your vehicle engines and transmissions are well built and reliable. Over 60% of claims are electrical and high tech repairs. Average vehicle repair for a vehicle under $40,000: $587.00

FOR EVERY 1 HOUR OF LABOUR YOUR CUSTOMER SPENDS IN THE SERVICE DEPARTMENT, THEY WILL SPEND APPROXIMATELY THE SAME AMOUNT IN PARTS. LABOUR: $100 / HOUR PARTS: $100 (1 HOUR OF LABOUR X 1 PARTS) TOTAL: $200 / HOUR IN THE SERVICE DEPARTMENT THE PURCHASE OF AN EXTENDED WARRANTY MEANS THAT YOUR CUSTOMER IS PRE-PAYING HOURS OF SERVICE AFTER THE MANUFACTURER’S WARRANTY RUNS OUT. CONSIDER…

“If there was a problem, an engine on today’s vehicles can cost anywhere from $5,000 to $15,000. Protect your customers from unplanned repair and replacement expenses.”

PROBABILITY OF USING AN EXTENDED WARRANTY % Year Source: O.A.D.A.

Your vehicles are indeed of very high quality, state-of-the-art engineering and outstanding styling, but consider this: Canadian vehicles are exposed to four seasons, all weather extremes and temperatures of -30 degrees to +40 degrees. Many vehicles are driven harshly and not properly maintained according to the manufacturer’s suggested maintenance schedule.

Many of your vehicles have over 17,000 moving parts, 86,000 non-moving parts, 18 km’s of wiring and up to 50 microprocessors. If your vehicles were built 99% ‘perfect’, that still means 170 moving parts could fail during the life of the vehicle. If your vehicles were built 99.9% ‘perfect’, that still means 17 moving parts could fail during the life of the vehicle.

And if your vehicles were built 99.99% ‘perfect’, that still means 1.7 moving parts could fail during the life of the vehicle. That 1 or 2 moving parts could be a seal for $25 or an engine for $8,000. Even with a high quality vehicle, the Extended Warranty is a wise investment for your customer.

AN EXTENDED WARRANTY means that your customer doesn’t have to pay for major repairs for up to 7 years! allows your customer to manage the cost of vehicle ownership. ensures that your customer can now protect what they can’t predict!

BENEFITS OF AN EXTENDED WARRANTY FOR ME, THE SALESPERSON A HAPPY CUSTOMER!!! YOUR CUSTOMER DOES NOT EXPERIENCE ANY REPAIR, ROADSIDE OR RENTAL CAR HASSLES! YOUR CUSTOMER MAY ALSO SAVE HUNDREDS OR EVEN THOUSANDS OF DOLLARS IN VEHICLE REPAIRS. YOUR CUSTOMER IS ALSO ABLE TO TAKE ADVANTAGE OF ALL OF THE NON-MECHANICAL FEATURES OF YOUR EXTENDED WARRANTY PLAN SUCH AS TRIP PLANNING SERVICES.

BENEFITS OF AN EXTENDED WARRANTY FOR ME, THE SALESPERSON YOUR CUSTOMER IS MORE LIKELY TO PURCHASE THEIR NEXT VEHICLE FROM YOUR MANUFACTURER, YOUR DEALERSHIP AND FROM YOU BECAUSE THEY HAD A FAVOURABLE OWNERSHIP EXPERIENCE.

BENEFITS OF AN EXTENDED WARRANTY FOR ME, THE SALESPERSON WHEN YOUR CUSTOMER CONTINUES TO SERVICE THEIR VEHICLE AT YOUR DEALERSHIP, THERE IS A BETTER CHANCE THAT THEY WILL BUY THEIR NEXT VEHICLE AT YOUR DEALERSHIP. FACT. YOU SELL THE CUSTOMER THEIR FIRST VEHICLE AT YOUR DEALERSHIP. THE PROFESSIONALISM AND EXPERTISE OF YOUR SERVICE DEPARTMENT HELPS SELL THE SECOND VEHICLE.

Still a little uncertain?

What if there was no risk whatsoever for your customer?

They could have the coverage if they needed it.

They could get their money back if they didn’t.

We know your vehicles are built to the highest standards in the industry. That's why your dealership is pleased to offer this unique Warranty Refund Program to your customers.

The Manufacturers’ X- tended Warranty Refund Program is ‘product enhancement’ that is designed to help sell more manufacturer’s extended warranties in your dealership and offer an outstanding ‘value proposition’ for your customers.

The Manufacturers’ X- tended Warranty Refund Program provides a full refund (to a maximum amount of $4,000) of a manufacturer’s new vehicle extended warranty should the vehicle owner/lessee not experience any mechanical breakdown claims during the term of the extended warranty plan sold.

The manufacturer’s new vehicle extended warranty sold must be a minimum of 60 months and exceed any manufacturer’s “bumper to bumper” coverage by at least 24 months in order for the Manufacturers’ X-tended Warranty Refund Program to apply.

Simply add the price of the Manufacturers’ X- tended Warranty Refund Program to the price of the manufacturer’s new vehicle extended warranty. Once the manufacturer’s new vehicle extended warranty has gone to term without mechanical breakdown claims, the vehicle owner/lessee submits a request for a warranty refund.

The REFUND includes: the purchase price of the Manufacturers’ New Vehicle Extended Warranty PLUS the price of the Manufacturers’ X-tended Warranty Refund Program PLUS applicable provincial and federal taxes.

It’s our way of providing your customer with ULTIMATE PEACE OF MIND with their new vehicle. For your customer, it’s an absolute ‘no lose’ situation.

FAQ Q - Do scheduled oil changes affect the Refund? A - No, additional benefits, such as oil changes and tire rotations, and benefits such as custom trip routing will not void the Warranty Refund Q - Does using the roadside assistance plan or having a vehicle towed void eligibility for a refund? A - If the claim for such items as roadside and towing are covered under the basic vehicle comprehensive warranty at the time of claim, it will NOT void eligibility. Any claim that is processed under the Manufacturers’ Extended Vehicle Warranty/Service Contract will void eligibility for a refund.

FAQ Q - How long is a vehicle eligible for Xwrp? A - As long as the term of the Xwrp and warranty is a minimum of 60 months from the date of sale of the Xwrp and exceeds the basic vehicle comprehensive warranty by a minimum of 24 months, the vehicle is eligible. Q - Is the Xwrp transferable? A - The Xwrp cannot be transferred or cancelled.

FAQ Q - What does a person with an Xwrp need to present to prove no claims were made? A - Proof of no claims is a simple matter of the Service Department checking the VIN history and when eligible, making note on company letterhead. This letter along with a copy of the Xwrp, the Manufacturers' Extended Warranty Contract, current vehicle registration and proof of insurance is submitted to the Claims Department and the Refund Cheque gets mailed to the Dealer made payable to the customer.

FAQ Q - What if a customer's warranty is 60 months/100,000km and the customer purchases the Xwrp, but exceeds their 100,000km in the 4th year. When is the customer eligible to request a Warranty Refund? A - After the 60 months has expired. The Refund request must be submitted to and received by the Administrator within sixty (60) days subsequent to the Warranty Contract expiration by time (Full Term). “Full Term” means the number of months of the Warranty Contract, starting from the Effective Date and concluding no earlier than 60 months from the Effective Date.

Thank You!

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