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                                                                   EXHIBIT 10.19


                             UNITED AUTO GROUP, INC.
                                375 FIFTH AVENUE
                            New YORK, NEW YORK 10152

                              As of August 3, 1999

Samuel X. DiFeo
141 Lorraine Avenue
Spring Lake, N.J. 10152

Dear Sam:

      This letter sets forth our mutual agreement regarding (i) the terms and
conditions on which Samuel X. DiFeo (hereinafter sometimes the "Executive") will
continue to serve as President and Chief Operating officer of United Auto Group,
Inc. (the "Company") and (ii) the rights, entitlements and obligations of the
Executive and the Company, respectively, upon the termination of the Executive's
current employment as President and Chief Operating Officer of the Company
("President"), as set forth in Section 2 hereafter.

      1.    TERM, PAYMENTS AND BENEFITS. In consideration for services to be
rendered by the Executive as President for the Term (defined below), the Company
hereby agrees to compensate the Executive, in consideration for such service and
without regard to such other compensation and benefits to which the Executive
has been entitled pursuant to the Executive's existing agreements and
understandings with the Company, and to otherwise provide benefits to the
Executive as follows:

            (a)   Term. The Executive shall continue to serve as President of
the Company, through December 31, 1999, subject to the Company's right to extend
the Executive's service as President of the Company through May 31, 2000 upon
written notice of the Company's election to so extend the Executive's employment
as President hereunder, such notice to be delivered by the Company to the
Executive on or before December 1, 1999.

            (b)   Compensation. As President of the Company, the Executive shall
be compensated at the rate of $360,000 per annum, together with such bonus as
the Company shall determine to be appropriate for services rendered by the
Executive as President of the Company during any applicable period in light of
the Executive's contribution to the Company during such period and additional
factors deemed relevant by the Company.

            (c)   Stock Options. The Company shall confirm the immediate vesting
(i.e., August 3, 1999) of all options held by the Executive to purchase shares
of voting common stock, par value $0.0001 per share (the "Common Stock") of the
Company, which options shall

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Samuel X. DiFeo
August 3, 1999
Page 2

thereafter be exercisable at any time after August 3, 1999, through and
including the termination of the exercise period attributable to each option as
set forth below, notwithstanding any agreements to the contrary. Such immediate
vesting and exercise rights shall apply to all options previously granted to the
Executive, including without limitation, as follows:

                  (i)   20,000 shares at the exercise price of $10.00 per share
                        pursuant to Stock Option Agreement dated as of April 23,
                        1996, with an exercise termination date of April 23,
                        2006;

                  (ii)  21,267 shares at the exercise price of $30.00 per share
                        pursuant to Option Certificate dated as of October 28,
                        1996, with an exercise termination date of October 28,
                        2001;

                  (iii) 20,000 shares at the exercise price of $17.00 per share
                        pursuant to Stock Option Agreement dated as of May 14,
                        1997, with an exercise termination date of May 14, 2007;

                  (iv)  100,000 shares at the exercise price of $17.50 per share
                        pursuant to Stock Option Agreement dated as of April 13,
                        1998, with an exercise termination date of April 13,
                        2008; and

                  (v)   120,000 shares at the exercise price of $7.0625 per
                        share pursuant to Stock Option Agreement dated as of
                        March 3, 1999, with an exercise termination date of
                        March 3, 2009.

      2.    TERMINATION OF EMPLOYMENT.

            (a)   Termination of Employment. The Executive's employment as
President of the Company shall be deemed terminated upon the occurrence of any
of the following (each a "Termination Event"):

                  (i)   Immediately upon the death of the Executive.

                  (ii)  By the Company at any time after the Permanent
Disability of the Executive, subject to compliance by the Company with the
Americans With Disabilities Act, and by the Executive at any time after his
Permanent Disability.

                  (iii) By the Company at any time for Cause.

                  (iv)  By the Company at any time without Cause

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Samuel X. DiFeo
August 3, 1999
Page 3

                  (v)   By the Executive's voluntary resignation.

            (b)   Cause. For purposes hereof, Cause shall mean: (i) active
participation by the Executive in fraudulent conduct, (ii) conviction of, or a
guilty plea to, a felony (iii) a deliberate act or series of deliberate acts
which results in material injury to the business, operations or business
reputation of the Company, (iv) an act or series of acts of dishonesty,
recklessness or gross-negligence which results in material injury to the
business operations or business reputation of the Company or (v) the Executive's
willful and continued failure to perform any of his material duties as President
which results in material injury to the business operations or business
reputation of the Company; provided, however there shall not be Cause in the
case of(x) clause (iii) or (iv) if the Executive promptly and diligently, after
receipt of written notice form the Company, takes such action which causes the
Company, in its reasonable judgment, to believe that such act or series of acts
would not likely result in material injury to the business, operations or
business reputation of the Company, or that any such injury, if already
incurred, has been rectified, or (y) clause (v), if the Executive promptly and
diligently, after receipt of written notice form the Company, discontinues his
failure to perform and rectifies any injury which resulted form his failure to
perform. Any repetition of any such deliberate, or substantially similar, act,
or such willful, or substantially similar, failure to perform, shall be Cause
without any further opportunity to cure.

            (c)   Permanent Disability. For the purposes hereof, Permanent
Disability shall be determined as follows:

                  (i)   Determination. The Executive's "Permanent Disability"
shall be deemed to have occurred one (1) day after (x) one hundred fifty (150)
days in the aggregate during any consecutive twelve (12) month period, or (y)
one hundred fifty (150) consecutive days that, in either case, the Executive, by
reason of his physical or mental disability or illness, shall have been unable
to discharge fully his duties as President.

                  (ii)  Resolution of Disagreement. If either the Company or the
Executive, after receipt of notice of the executive's Permanent Disability from
the other, disagrees that the Executive's Permanent Disability shall have
occurred, the Executive shall promptly submit to a physical examination by, or
at the direction of, the chief of medicine of any major accredited hospital in
the New York, New York metropolitan area and, unless such physician shall issue
a written statement to the effect that, in such physician's opinion, based on
such physician's diagnosis, the Executive is capable of resuming his employment
and devoting his full time and energy to discharging fully his duties hereunder
within thirty (30) days after the date of such statement, such Permanent
Disability shall be deemed to have occurred on a date determined in accordance
with Section 2(c)(i) above.

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Samuel X. DiFeo
August 3, 1999
Page 4

      3.    SEVERANCE COMPENSATION.

            (a)   Termination By Death. If the Executive's employment is
terminated by death, the Executive's estate shall be entitled to receive (v) any
unpaid salary and other compensation and benefits accrued and earned by the
Executive through the date of the Executive's death, including a pro rata share
of any bonus applicable to the calendar year in which death occurs, (w)
severance compensation, within ninety (90) days after the date of death, in a
lump sum payment equal to Eight Hundred Thousand ($800,000) Dollars, (x) any
amounts owing in accordance with the terms of any profit sharing, retirement and
other benefit plans in which the Executive is a participant, (y) any other
benefits to which the Executive is then entitled, payable within ninety (90)
days after the date of death, accrued up to and including the date of the
Executive' death and (z) benefits, if any, provided by any insurance policies to
Executive or Executive's estate in accordance with their terms.

            (b)   Termination for Cause. If the Executive's employment is
terminated by the Company for Cause, the Company shall not have any other or
further obligations to the Executive under this Agreement, except (w) as may be
provided in accordance with the terms of any profit sharing, retirement and
other benefit plans to which the Executive is a participant (x) as to that
portion of any unpaid salary and other compensation and benefits accrued and
earned by the Executive through the date of such termination, (y) any other
benefits to which the Executive is then entitled, payable within ninety (90)
days after the date of such termination, accrued up to and including the date of
such termination and (z) as to the benefits, if any, provided by any insurance
policies in accordance with their terms.

            (c).  Termination without Cause or For Permanent Disability.

                  (i)   If the Executive's employment is terminated by the
Company without Cause, the Executive shall be entitled to receive (v) salary and
other compensation and benefits payable to the Executive hereunder through
December 31, 1999 or such later date to which the term of employment hereunder
shall have been extended (the "Contract Term Expiration Date"), together with
any bonus applicable to the calendar year in which such termination occurs that
would have been payable to the Executive had such termination not occurred (w)
the benefit of the Consulting Agreement (the "Consulting Agreement") a copy of
which is attached hereto as Exhibit A (x) any amounts owing in accordance with
the terms of any profit sharing, retirement and other benefit plans in which the
Executive is a participant (y) any other benefits to which the Executive is
entitled, payable within ninety (90) days after the Contract Term Expiration
Date, accrued up to and including the Contract Term Expiration Date and (z)
benefits, if any, provided by any insurance policies in accordance with their
terms.

                  (ii)  If the Executive's employment is terminated because of
his

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Samuel X. DiFeo
August 3, 1999
Page 5

Permanent Disability, the Executive shall be entitled to receive (v) salary and
other compensation and benefits payable to the Executive hereunder through
December 31, 1999 or such later date to which the term of employment hereunder
shall have been extended (the "Contract Term Expiration Date"), together with
any bonus applicable to the calendar year in which such termination occurs that
would have been payable to the Executive had such termination not occurred, (w)
the benefit of the Consulting Agreement, (x) any amounts owing in accordance
with the terms of any profit sharing, retirement and other benefit plans in
which the Executive is a participant, (y) any other benefits to which the
Executive is entitled, payable within ninety (90) days after the Contract Term
Expiration Date, accrued up to and including the Contract Term Expiration Date
and (z) benefits, if any, provided by any insurance policies to Executive or
Executive's estate in accordance with their terms.

            (d)   Involuntary Resignation. If the Executive resigns from all
offices and directorships of the Company and all entity affiliates of the
Company for any of the reasons set forth in clauses (i) through (viii) of this
Section 3(d), such resignation shall be deemed to be an "Involuntary
Resignation," and the Executive shall be entitled to receive the same severance
compensation and other benefits as are provided for in Section 3(c) above.

                  (1)   The Company materially changes the Executive's duties
and responsibilities as President without his prior written consent, which
consent may be granted or withheld by the Executive in his absolute and sole
discretion. The Executive shall be deemed to have consented to any proposal of
the Board of Directors of the Company calling for a material change in his
duties and responsibilities only if he shall give written notice of his consent
thereto to the Board of Directors of the Company within thirty (30) days after
receipt of such written proposal. If the Executive shall have failed to give
such consent, the Company shall have the opportunity to withdraw such proposed
material change by written notice to the Executive given within ten (10) days
after the end of such thirty (30) day period.

                  (ii)  The Executive's place of employment is located or
relocated more than fifty (50) road miles from either 375 Park Avenue, New York,
New York or Jersey City, New Jersey

                  (iii) The Company, without the Executive's prior written
consent, reduces the Executive's current base salary of $360,000.

                  (iv)  The Company imposes requirements on the Executive, or
gives instructions or directions to the Executive, which are: (x) contrary to or
in violation of (a) rules, principles, or codes of professional responsibility
or (b) law (as set forth in written statutes or regulations thereunder), which
the Executive is obligated to follow; (y) such that compliance by the Executive
with such requirements, instructions or directions would likely (a) have a
material adverse effect on the Executive or (b) cause the Executive to suffer
substantial liability, and (z)

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Samuel X. DiFeo
August 3, 1999
Page 6

not withdrawn by the Company after written request by the Executive, which
written request sets forth the Executive's complete explanation as to why he
believes the requirements, instructions or directions should be withdrawn.

                  (v)   There occurs a material breach by the Company of any of
its obligations under this Agreement or any other agreement between the
Executive and the Company regarding the Executive's compensation, benefits or
otherwise, which breach has not been cured in all material respects within
thirty (30) days after the Executive gives written notice thereof to the
Company, which notice sets forth in reasonable detail the nature and
circumstances of such breach.

                  (vi)  The Company or any majority owned subsidiary of the
Company violates a federal for state criminal law involving moral turpitude
which would likely (a) have a material adverse effect on the Executive or (b)
cause the Executive to suffer substantial liability, and the Executive was
unaware of such unlawful activity at the time of its occurrence.

                  (vii) The Executive resigns upon the occurrence of a "change
in control," such change occurring after August 3, 1999.

                  (viii) In the event of termination of the Executive by the
Company within six (6) months following a "change in control," other than a
termination by the Company for Cause.

      The term "change in control" means the first to occur of the following
events:

            A.    The acquisition by any person, entity or "group" within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty-five (25%) percent or more of
either the then outstanding equity interests in the Company or the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of the Board of Directors; or

            B.    The Company's stockholders approve an agreement to merge or
consolidate with another corporation or other entity resulting (whether
separately or in connection with a series of related transactions) in a change
in ownership of twenty percent (20%) or more of the voting control of, or
beneficial rights to, the voting capital stock of the Company, or an agreement
to sell or otherwise dispose of all or substantially all of the Company's assets
(including, without limitation a plan of liquidation or dissolution), or
otherwise approve of a fundamental alteration in the nature of the Company's
business; provided, however, that the term "change of control" shall
specifically not include the announced transaction whereby Penske Capital
Partners and its affiliates are acquiring interests in the

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Samuel X. DiFeo
August 3, 1999
Page 7

Company.

            (e)   Voluntary Resignation. If the Executive voluntarily resigns,
the Executive's employment shall be terminated. In the event of such voluntary
resignation, the Executive shall be entitled to (w) any unpaid salary and other
compensation and benefits accrued and earned by the Executive through the date
of such termination, including a pro rata portion of any bonus applicable to the
calendar year in which such termination occurs, (x) any amounts owing in
accordance with the terms of any profit sharing, retirement and other benefit
plans in which the Executive is a participant, (y) other benefits to which the
Executive is entitled, payable within ninety (90) days after the date of such
termination, accrued to and including the date of such termination, and (z)
benefits, if any, provided by any insurance policies in accordance with their
terms.

      4.    SEVERANCE AGREEMENTS.

            (a)   Resignation from Office. Upon the occurrence of any
Termination Event, the Executive shall be deemed to have thereupon resigned
immediately from all offices and directorships held by the Executive in the
Company and all affiliates of the Company, and the Executive shall sign and
deliver to the Company and all entity affiliates of the Company, as the case may
be, written resignations from all such offices and directorships.

            (b)   Consulting Agreement. Upon the occurrence of a Termination
Event as set forth in Sections 3(c)(i) or (ii) or 3(d), or if a Termination
Event as set forth in Sections 3(c)(i) or (ii) or 3(d) has not occurred prior to
the Contract Term Expiration Date, upon the Contract Term Expiration Date
(unless the Executive's employment has been terminated by the Company for Cause
or the Executive has voluntarily resigned from the Company prior to the Contract
Term Expiration Date), the Executive shall continue to be employed as a
consultant by the Company in accordance with the terms and conditions of that
certain Consulting Agreement.

            (c)   Press Release. Upon the occurrence of a Termination Event, the
form of press release confirming the termination of the Executive as President
shall be subject to the mutual agreement of the Executive and the Company. Any
statements by the Company or the Executive to third parties or to employees of
the Company regarding the termination of the Executive's employment as President
shall be consistent with such press release or subject to the mutual agreement
of the Executive and the Company.

            (d)   Non-Compete. Upon the termination of the Executive as
contemplated hereunder, the Executive shall be under no obligation to seek other
employment and there shall be no offset against amounts due the Executive
hereunder, under the Consulting Agreement or under any other agreement between
the Executive and the Company, on account of any

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Samuel X. DiFeo
August 3, 1999
Page 8

remuneration attributable to any subsequent or additional employment the
Executive may obtain; provided, however, the Executive shall not seek or accept
employment in the automotive industry for so long as the Consulting Agreement is
in effect without the prior written consent of the Company, which consent shall
not be unreasonably withheld or delayed, and, provided further, that any such
permitted subsequent employment shall have no effect on the Executive's rights
and entitlements under this Agreement, the Consulting Agreement or any other
agreement between the Executive and the Company or the Company's rights with
respect to the Executive's responsibility to maintain the confidentiality of
this letter agreement and confidential data of the Company, its affiliates, and
its suppliers and manufacturers.

            (e)   Confidentiality. The Executive and the Company hereby agree
that for so long as this letter agreement is otherwise confidential, neither the
Executive nor the Company will disclose the fact of this letter or any of its
terms or provisions to any person without the prior written consent of the other
party hereto; provided, however, that nothing herein shall prohibit disclosure
of such information to the extent required by law, nor prohibit disclosure by
the Executive to any legal or financial consultant, member of the Executive's
immediate family or prospective employer, if such person first agrees to be
bound by the confidentiality provisions of this Section 4(e). Notwithstanding
the foregoing, it is acknowledged by the parties hereto that this letter may be
filed by the Company with the Securities and Exchange Commission pursuant to
applicable law.

      5.    GENERAL PROVISIONS.

            (a)   This letter may be executed in any number of counterparts,
each of which when so executed and delivered shall constitute an original and
which all together shall constitute one agreement, with such counterparts being
deliverable by facsimile with the original being transmitted by overnight
courier.

            (b)   This letter shall bind and inure to the benefit of the
Executive's and the Company's respective successors and permitted assigns.

            (c)   This letter may not be amended, waived or modified, in whole
or in part, except by a writing signed by each of the Executive and the Company.

            (d)   This letter shall be construed and enforced in accordance
with, and shall be governed by, the laws of the State of New York without giving
effect to that State's choice of law principles.

            (e)   Any disputes arising under or in connection with this letter
shall, at the election of either the Executive or the Company, be resolved by
binding arbitration, to be held in New York City in accordance with the rules
and procedures of the American Arbitration

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Samuel X. DiFeo
August 3, 1999
Page 9

Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. The Company shall pay all
costs and expenses (including reasonable attorneys fees) as incurred by the
Executive with any such arbitration or litigation, unless the Executive is the
unsuccessful party. Pending the resolution of any arbitration or court
proceeding, the Company shall continue payment of all amounts due the Executive
under this letter and all benefits to which the Executive is entitled at the
time the dispute arises.

            (f)   This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and shall supercede all prior
agreements entered into between the parties with respect to the subject matter
hereof, including, without limitation, any terms or conditions of the Option
Agreements that conflict with any of the terms and conditions set forth in this
Agreement.

      If the forgoing is acceptable to you, please sign, date and return the
attached copy of this letter to the undersigned by hand or by express mail.

                                                     Sincerely,

                                                     UNITED AUTO GROUP, INC.

                                                     By: /s/ Roger S. Penske
                                                         -----------------------

AGREED:

/s/ Samuel X. DiFeo
-----------------------
Samuel X. DiFeo
Date: 8-6-99

<PAGE>

                              CONSULTING AGREEMENT

      This Consulting Agreement (the "Agreement") is made effective as of August
18, 1999, by and between United Auto Group, Inc. ("UAG"), a Delaware
Corporation, and Samuel X. DiFeo ("Consultant").

      Consultant is knowledgeable and experienced in the business and affairs of
UAG and its industry, currently serving as President and Chief Operating Officer
of UAG, and UAG desires to retain Consultant as a consultant upon Consultant's
cessation as President and Chief Operating Officer of UAG, and Consultant is
willing to be retained as a consultant upon such event. The execution and
delivery of this Agreement by UAG and the Consultant is being entered into
pursuant to that certain Letter Agreement dated as of August 3, 1999 between
UAG, on one hand, and Consultant, on the other hand, relative to Consultant's
severance from employment with UAG (the "Letter Agreement"). UAG and Consultant
desire that Consultant serve in a consulting capacity with UAG upon Consultant's
cessation as President and Chief Operating Officer of UAG on the terms and
conditions hereinafter set forth.

      The parties hereto agree as follows:

      1.    Consulting Agreement. UAG hereby retains Consultant as a consultant
for the period commencing upon the earlier to occur of the Contract Term
Expiration Date, the occurrence of a Termination Event which arises under
Section 3(d), or, for a Termination Event which arises under Section 3(c)(i) or
3(c)(ii), for a period commencing upon the Contract Term Expiration Date, all as
defined and set forth in the Letter Agreement (a "Qualifying Termination
Event"), and ending upon Consultant's termination as a consultant to UAG
pursuant to Section 1(d) hereof (the "Employment Period") upon the following
terms and conditions:

            (a)   Services. During the Employment Period, Consultant will render
services and assist UAG in connection with the management and operations of the
automotive business of UAG. Consultant's services hereunder will be required at
such time and such places as will result in no more than a reasonable disruption
to Consultant's commitments, having in mind his other permitted business
commitments during the Employment Period which may obligate Consultant to
perform his services in connection with such other commitments prior to his
services hereunder. To the end that there shall be a minimum interference with
Consultant's other commitments, Consultant's services hereunder may be rendered
by personal consultation at his residence or office wherever maintained or by
correspondence through mail, telephone or other similar modes of communication
at times, including weekends and evenings, most convenient to Consultant;
provided, however, that the parties hereto contemplate that, subject to the
above, Consultant will devote such time to the automotive business of UAG as
will, in the aggregate, approximate one normal work week (L 40 hours) per
month during the Employment Period. Notwithstanding anything to the contrary in
this Agreement, a breach of this Section 1(a) will not entitle UAG to withhold
payments or benefits provided to Consultant under this Section 1 or to offset
any alleged damages for such breaches against any payments or benefits provided
to Consultant under this Agreement, the Letter Agreement or to which Consultant
may otherwise be entitled unless such breach constitutes Consultant's willful
and continued failure to perform his

<PAGE>

duties on behalf of UAG as set forth above in this Section 1(a).

            (b)   Payment. During the Employment Period, UAG shall pay
Consultant (or in the event of the death of Consultant prior to the expiration
of the Employment Period, to Consultant's heirs, executors, administrators,
legal representatives, agents, successors-in-interest and assigns) an aggregate
annual payment of $400,000 per annum (or such higher amount as may be agreed to
by the parties from time to time) in accordance with UAG's customary payroll
practices.

            (c)   Benefits. In addition to the compensation described above in
this Section 1, Consultant will be entitled during the Employment Period to the
following benefits:

                  (i)   such health insurance and other similar medical and/or
                        dental benefits as are available from time to time to
                        UAG's senior management;

                  (ii)  reimbursement, upon submission of documentation in
                        accordance with UAG's regular expense policies, for
                        reasonable business expenses incurred on UAG's behalf by
                        Consultant;

                  (iii) any discretionary bonuses agreed to and approved by UAG
                        in its sole and absolute discretion; and

                  (iv)  exclusive use of a then current BMW model automobile
                        comparable to that presently available to Consultant, at
                        no cost or expense to Consultant.

            (d)   Termination. Consultant's engagement with UAG shall continue
for a period of twenty-four (24) months from the date of the occurrence of a
Qualifying Termination Event, provided, however that the Employment Period may
be extended for up to an additional twelve (12) months, solely at the option of
the Company, upon delivery of written notice to Consultant thirty (30) days
prior to the expiration date of the then Employment Period. Consultant's
engagement hereunder shall continue throughout the Employment Period, as same
may be so extended, on the terms and conditions herein set forth unless and
until Consultant's engagement is voluntarily terminated by Consultant prior to
the end of the Employment Period, upon ten (10) days prior written notice by
Consultant to the Company, whereupon neither Consultant nor UAG shall have any
further obligations hereunder. Anything herein to the contrary notwithstanding,
the Company shall have no right to terminate Consultant's engagement in
accordance with the terms and conditions herein provided prior to the end of the
Employment Period, as same may be so extended, except for Cause (as defined in
the Letter Agreement), whereupon the parties shall have no further obligations
hereunder.

            (e)   Subsequent Employment. During the Employment Period, as same
may be so extended, and thereafter, Consultant shall be under no obligation to
seek other employment, and there shall be no offset against amounts due to
Consultant under this Agreement, the Letter

                                       2
<PAGE>

Agreement or otherwise on account of any remuneration attributable to any
subsequent or additional employment Consultant may obtain; provided, however,
the Consultant shall not seek or accept employment in the automotive industry
for so long as this Consulting Agreement is in effect without the prior written
consent of the Company, which consent shall not be unreasonably withheld or
delayed, and, provided further, that any such subsequent or additional permitted
employment shall have no effect on Consultant's rights and entitlements under
this Agreement.

      2.    General Provisions.

            (a)   Notices. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, or mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service, to the recipient at the address of such party as set forth on
the signature page of this Agreement or such other address or to the attention
of such other person as the recipient party shall have specified by prior
written notice to the sending party. Any notice under this Agreement will be
deemed to have been given when so delivered (if delivered by hand) or the next
business day (if sent by reputable overnight courier service) or five (5) days
after being mailed (if sent by first class mail).

            (b)   Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision's legality or the enforceability of such provision in any
other jurisdiction, but this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein, except that any court having jurisdiction shall
have the power to reduce the duration, area or scope of such invalid, illegal or
unenforceable provision and, in its reduced form, it shall be enforceable.

            (c)   Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Consultant and UAG, except that
Consultant may not assign any of Consultant's rights or obligations under this
Agreement. In the event of the transfer of substantially all of the operating
assets of UAG to another corporation, entity or individual, by sale, merger or
otherwise, UAG shall assign its rights and obligations under this Agreement to
its successor-in-interest, in which event such successor-in-interest shall be
deemed to have acquired all rights and assumed all obligations of UAG hereunder.

            (d)   Choice of Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, regardless of
the laws that might otherwise' govern under applicable principles of conflicts
of law thereof.

      3.    Nondisclosure.

            (a)   Confidential Information. Consultant acknowledges that during
the course of Consultant's performance of services for UAG, Consultant may have
acquired technical

                                       3
<PAGE>

knowledge with respect to UAG's business operations, and that during the course
of Consultant's performance of services for UAG hereunder, Consultant may also
acquire technical knowledge with respect to UAG's business operations,
including, by way of illustration, UAG's existing and contemplated products,
trade secrets, models, compilations, business and financial methods or
practices, plans, pricing, marketing, merchandising and selling techniques and
information, customer lists, supplier lists, and confidential information
relating to UAG's policy and/or business strategy (all of such information
herein, to the extent that it is unique or proprietary, is referred to as the
"Confidential Information"). Consultant agrees that Consultant will not, while
engaged by UAG hereunder, divulge to any person, directly or indirectly, except
to UAG or its officers and agents or as reasonably required in connection with
Consultant's duties on behalf of UAG, use, except on behalf of UAG, any
Confidential Information acquired by Consultant during the term of Consultant's
employment hereunder. Consultant further agrees that Consultant will not at any
time after Consultant's engagement with UAG hereunder has ended, divulge to any
person directly or indirectly any Confidential Information. Consultant further
agrees that if Consultant's relationship with UAG is terminated, Consultant will
not take with Consultant but will leave with UAG all records, papers and
computer data and any copies thereof relating to the Confidential Information,
(and if such papers, records, computer data or copies are not on the premises of
UAG, Consultant agrees to return such paper, records and computer data
immediately upon such termination). Consultant hereby acknowledges that all such
papers, records, computer data or copies thereof are and remain the property of
UAG.

            (b)   Permitted Disclosures. The restriction on use or disclosure of
Confidential Information contained above does not extend to any item of
information which is known to the public or generally to the automobile industry
at the time of its disclosure by Consultant, other than through fault of
Consultant. In the event Consultant becomes legally compelled to disclose any of
the Confidential Information, Consultant will give UAG such notice as is
reasonably practicable of such legal compulsion so that UAG may seek a
protective order or other appropriate remedy, and/or waive compliance with the
provisions of this Agreement by Consultant. Consultant will furnish only that
portion of the Confidential Information which Consultant is legally required to
furnish.

      4.    Remedies. Each of the parties to this Agreement will be entitled to
enforce his or its rights under this Agreement specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights existing in his or its favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach or
threatened breach of the provisions of this Agreement and that any party may in
his or its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violations of the provisions of this Agreement.

      5.    Amendments and Waivers. Any provision of this Agreement may be
amended or waived only with the prior written consent of UAG and the Consultant.

      6.    Absence of Conflicting Agreements. Consultant hereby warrants and
covenants that his engagement by UAG hereunder does not result in a breach of
the terms, conditions or

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<PAGE>

provisions of any agreement to which Consultant is subject. UAG hereby warrants
and covenants that Consultant's engagement by UAG does not result in a breach of
the terms, conditions or provisions of any agreement to which UAG is subject.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered on the day and year first above written.

                                                 /s/ Samual X. DiFeo
                                                 -------------------------------
                                                 Samuel X. DiFeo

                                                 Address for Notices:
                                                 121 Lorraine Avenue
                                                 Spring Lake, New Jersey 07762

                                                 UNITED AUTO GROUP, INC.

                                                 By: /s/ Roger S. Penske
                                                     ---------------------------

                                                 Address for Notices:
                                                 375 Park Avenue
                                                 New York, New York 10152

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