DATE: August 14, 2002

TO: Finance and Insurance Managers

FROM: Mark S. Krejci

RE: New 2003 CNA Vehicle Service Contract (VSC)

I am excited to announce your new 2003 "T3" CNA Vehicle Service Contract Program. These changes are effective immediately.

The new T3 Program contains the following enhancements:

1. Two "wrap" coverage's for new vehicles: Factory+Plus Preferred Care (APC without powertrain components) and Factory+Plus Advantage Care (MAC without powertrain components).
   
   -All Preferred Care Contracts are exclusionary coverages - only lists what is not covered.
   -All Advantage Care Contracts are stated component coverage contracts.
   
   
2. New "wrap" coverages for certified used vehicles: Factory+Plus Preferred Care and Factory+Plus Advantage Care.
   
   
3. Elimination of 24,000-mile guideline for near-new vehicles. Now dealers can sell a near-new contract anytime during the full factory warranty.
   
   
4. Elimination of the business use surcharge. If a vehicle is not ineligible based on its use or equipment, it qualifies for coverage at no extra cost.
   
   
5. Disappearing deductible added - This can also be extended to sister stores within a participation group at the dealer's request.
   
   
6. New $150 deductible option.
   
   
7. Dealer commission increase. Dealer commissions have been changed to address an even higher commission on the $100 disappearing deductible and the $100 deductible.
   

The reason for moving to the higher commission on the $100 deductible plan is because most of the dealerships have been wanting a disappearing deductible to encourage customers back to the selling dealership.

Since the disappearing deductible is only available on the $100 deductible plan, we thought you would want the higher commission on the plan you would sell the most.

Please be aware these go into effect immediately. No forms programming is necessary. Please discard your old forms.

Thank you for allowing us the opportunity to serve you.

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