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UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number
    000-51653
  DEALERTRACK HOLDINGS,
    INC.
 (Exact name of registrant as
    specified in its charter)\
  Delaware(State or other
    jurisdiction
    of incorporation or organization)

52-2336218(I.R.S. Employer
    Identification Number)   1111
    Marcus Ave., Suite M04
    Lake Success, NY 11042 (Address
    of principal executive offices, including zip
    code)
  (516) 734-3600
 (Registrants telephone number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Common Stock, $0.01 Par Value Per Share(Title of each
    class)

The NASDAQ Stock Market, LLC(Name of exchange on which
    registered)   Securities registered pursuant to Section 12(g) of the
    Act: None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
    Large accelerated filer
    þ

Accelerated filer
    o

Non-accelerated
    filer o(Do not check if a smaller
    reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





TABLE OF
    CONTENTS
   
 PageItem 1.


Business


1Item 1A.


Risk Factors


14Item 1B.


Unresolved Staff Comments


26Item 2.


Properties


27Item 3.


Legal Proceedings


27Item 4.


Submission of Matters to a Vote of Security
    Holders


28Item 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


28Item 6.


Selected Consolidated Financial Data


29Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


30Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


51Item 8.


Financial Statements and Supplementary Data


52Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


89Item 9A.


Controls and Procedures


89Item 9B.


Other Information


90Item 10.


Directors, Executive Officers and Corporate
    Governance


90Item 11.


Executive Compensation


90Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


90Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


91Item 14.


Principal Accountant Fees and Services


91Item 15.


Exhibits and Financial Statement Schedule


92EX-21.1: LIST OF SUBSIDIARIESEX-23.1: CONSENT OF PRICEWATERHOUSECOOPERS LLPEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONSEX-10.10: AMENDMENT NO. 1 TO AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENTEX-10.11: AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENTEX-10.12: AMENDMENT NO. 1 TO AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENTEX-10.14: AMENDMENT NO. 1 TO AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENTEX-10.16: AMENDMENT NO. 1 TO AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENTEX-10.21: AMENDMENT NO. 1 TO AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENTEX-10.31: FORM OF RESTRICTED STOCK UNIT AGREEMENTEX-21.1: LIST OF SUBSIDIARIESEX-23.1: CONSENT OF PRICEWATERHOUSECOOPERS LLPEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATION




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PART I
  Item 1.
    Business  Certain statements in this Annual Report on
    Form 10-K
    are forward-looking statements within the meaning of
    Section 27A of the Securities Act of 1933, as amended (the
    Securities Act), and Section 21E of the
    Securities Exchange Act of 1934, as amended (the Exchange
    Act). These statements involve a number of risks,
    uncertainties and other factors that could cause our actual
    results, performance or achievements to be materially different
    from any future results, performance or achievements expressed
    or implied by these forward-looking statements. Factors which
    could materially affect such forward-looking statements can be
    found in the section entitled Risk Factors in
    Part 1, Item 1A in this Annual Report on
    Form 10-K.
    Investors are urged to consider these factors carefully in
    evaluating the forward-looking statements and are cautioned not
    to place undue reliance on such forward-looking statements. The
    forward-looking statements made herein are only made as of the
    date hereof and we will undertake no obligation to publicly
    update such forward-looking statements to reflect subsequent
    events or circumstances.
  References in this Annual Report on
    Form 10-K
    to DealerTrack, the Company,
    our or we are to DealerTrack Holdings,
    Inc., a Delaware corporation,
    and/or its
    subsidiaries.
  Overview
      www.dealertrack.com. Form 10-K, Form 10-Q, Form 8-K, www.sec.gov.
 1




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Our
    Business
        Our
    Customers
    Dealers
       2




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Financing
    Sources
  and/or
  Aftermarket
    Providers
  tm
  Other
    Service and Information Providers
    Our
    Web-based Network
   3




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Our
    Growth Strategy
    Expand
    Our Customer Base
    Sell
    Additional Products and Services to Our Existing
    Customers
    Expand
    Our Offerings
    Pursue
    Acquisitions and Strategic Alliances
  and/or
 4




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Our
    Solutions
  
    Solutions

Products and Services

Subscription/TransactionDealer Management System (DMS) Solution:

   DealerTrack Arkona DMS

   SubscriptionInventory Management Solutions:

   AAX®

   Subscription   InventoryPro

   Subscription   PriceDrivertm

   SubscriptionCompliance Solution:

   DealWatchtm

   Subscription   DealerTrack
eMenutm

   SubscriptionSales Solution:

   SalesMakertm

   Subscription   BookOut

   Subscription   DealerTrack
eMenutm

   Subscription   DealerTrack
Aftermarket
Networktm

   Transaction   DealerTrack
eContractingtm

   Subscription and Transaction   eDocs (for lenders)

   Transaction   DealerTracks accessory solution

   Subscription and Transaction   ToolKittm

(On-line credit application processing platform)

   Transaction   DealTransfer®

   Subscription  5




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® ®
    DMS
    Solution:
  DealerTrack Arkona DMS
  Inventory
    Management Solutions:
    AAX ®
  InventoryPro
  PriceDriver
  Compliance
    Solution:
  DealWatch tm
  DealerTrack
    eMenu tm
 6




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Sales
    Solution:
    SalesMaker tm
  BookOut
  DealerTrack
    eMenu tm
  DealerTrack Aftermarket
    Network tm
  DealerTrack eContracting and eDocs
  DealerTracks accessories solution
  ToolKit tm
  DealTransfer®
 7




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Data
    Services:
  ALG Residual Value Guides
  ALG Data Services
  Chrome New Vehicle Data
  Chrome VINMatch
  Chrome Construct
  Chrome Automotive Description Service (ADS) and
    ChromeIQ
  Chrome BookLink
  Chrome Carbook
    Showroom®,

    PC Carbook (R) and Carbook Fleet Edition
  Chrome Interactive Media
  International
   8




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Technology
    Web-Based
    Interface
    Partner
    Integration
    Infrastructure
    Security
      Customer
    Development and Retention
  Sales
   9




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Training
    Marketing
    
    advertising in automotive trade magazines and other periodicals;
    public relations through press releases and publication of news
    and thought leadership articles;
    direct marketing employing mail and
    e-mail
    delivered to buyers and influencers in dealer and lender markets;
    participation in industry events, and the hosting of a corporate
    proprietary event;
    employing our website to offer services, and provide product and
    company information;
    search marketing to increase visibility in search engine result
    pages; and
    promotions and sponsorships on national and regional levels.  Customer
    Service
  e-mail e-mail
  Customers
   10




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Competition
    
    web-based automotive finance credit application processors,
    including AppOne, CUDL, Finance Express, Open Dealer Exchange,
    and RouteOne;
    proprietary finance credit application processing systems,
    including those used and provided to dealers by American Honda
    Finance Corp. and Volkswagen Credit;
    dealer management system providers, including ADP, Inc. and The
    Reynolds and Reynolds Company;
    automotive retail sales desking providers, including ADP, Inc.
    and Market Scan Information Systems, Inc.;
    vehicle configuration providers, including Autodata Solutions
    Company, R.L. Polk & Co. and JATO Dynamics, Inc.;
    providers of services related to aftermarket products, including
    MenuVantage and the StoneEagle Group;
    providers of inventory analytic tools, including First Look, LLC
    and vAuto, Inc., and;
    providers of compliance solutions; including Compli and the
    three credit reporting agencies.    Government
    Regulation
     11




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Consumer
    Privacy and Data Security Laws
          Fair
    Credit Reporting Act
    State
    Laws and Regulations
    Revised
    Uniform Commercial Code
    Section 9-105,
    E-SIGN and
    UETA
   12




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Section 9-105
  Internet
    Regulation
    Intellectual
    Property
      Industry
    Trends
   13




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Employees
    Item 1A.
    Risk
    Factors  You should carefully consider the following risk factors, as
    well as the more detailed descriptions of our business elsewhere
    in this Annual Report on
    Form 10-K
    . The risks described below are not the only ones we face.
    Additional risks not presently known to us or that we currently
    deem immaterial may also materially adversely affect our
    business, prospects, financial condition or results of
    operations. Our business, prospects, financial condition or
    results of operations could be materially and adversely affected
    by the following:
  Economic
    trends that affect the automotive retail industry or the
    indirect automotive financing industry may have a negative
    effect on our business.
     14




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We may
    be unable to continue to compete effectively in our
    industry.
    We may
    face increased competition from AppOne, CUDL, Finance Express,
    Open Dealer Exchange and RouteOne.
  and/or
  Some
    vendors of software products used by automotive dealers,
    including certain of our competitors, are designing their
    software and using financial or other incentives to make it more
    difficult for our customers to use our products and
    services.
   15




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Our
    systems and network may be subject to security breaches,
    interruptions, failures and/or other errors or may be harmed by
    other events beyond our control.
  Our
    systems may be subject to security breaches.
        Our
    network may be vulnerable to interruptions or
    failures.
    Undetected
    errors in our software may harm our operations.
   16




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Our
    systems may be harmed by events beyond our control.
    Our
    failure or inability to execute any element of our business
    strategy could adversely affect our operations.
    
    selling additional products and services to our existing
    customers;
    expanding our customer base;
    expanding our offerings; and
    pursuing acquisitions and strategic alliances.      Our
    revenue, operating results and profitability will vary from
    quarter to quarter, which may result in volatility in our stock
    price.
    
    the number of active lender to dealer relationships in the
    DealerTrack Network;
    the volume of new and used automobiles financed or leased by our
    participating financing source customers;
    the timing, size and nature of our subscriptions and any
    cancellations thereof; 17




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
    automobile manufacturers or their captive financing sources
    offering special incentive programs such as discount pricing or
    low cost financing;
    the timing of acquisitions or divestitures of businesses,
    products and services;
    unpredictable sales cycles;
    product and price competition regarding our products and
    services and those of our participating financing sources;
    changes in our operating expenses;
    the timing of introduction and market acceptance of new
    products, services or product enhancements by us or our
    competitors;
    foreign currency fluctuations;
    personnel changes; and
    fluctuations in economic and financial market conditions.    We may
    be unable to develop and bring products and services in
    development and new products and services to market in a timely
    manner.
    We are
    subject, directly and indirectly, to extensive and complex
    federal and state regulation and new regulations and/or changes
    to existing regulations may adversely affect our
    business.
  The
    indirect automotive financing and automotive retail industries
    are subject to extensive and complex federal and state
    regulation.
   18




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and/or and/or
  The use
    of our electronic contracting product by financing sources is
    governed by relatively new laws.
    New
    legislation or changes in existing legislation may adversely
    affect our business.
   19




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We
    utilize certain key technologies from, and integrate our network
    with, third parties and may be unable to replace those
    technologies if they become obsolete, unavailable or
    incompatible with our products or services.
    We may
    be unable to adequately protect, and we may incur significant
    costs in defending, our intellectual property and other
    proprietary rights.
      A
    license agreement we have with a financing source customer
    restricts our ability to utilize the technology licensed under
    this agreement beyond the automotive finance
    industry.
   20




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Claims
    that we or our technologies infringe upon the intellectual
    property or other proprietary rights of a third party may
    require us to incur significant costs, enter into royalty or
    licensing agreements or develop or license substitute
    technology.
  and/or
  We
    could be sued for contract or product liability claims, and such
    lawsuits may disrupt our business, divert managements
    attention or have an adverse effect on our financial
    results.
   21




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We
    have made strategic acquisitions in the past and intend to do so
    in the future. If we are unable to find suitable acquisitions or
    partners or to achieve expected benefits from such acquisitions
    or partnerships, there could be a material adverse effect on our
    business, prospects, financial condition and results of
    operations.
      
    integration and restructuring costs, both one-time and ongoing;
    maintaining sufficient controls, policies and procedures;
    diversion of managements attention from ongoing business
    operations;
    establishing new informational, operational and financial
    systems to meet the needs of our business;
    losing key employees, customers and vendors;
    failing to achieve anticipated synergies, including with respect
    to complementary products or services; and
    unanticipated and unknown liabilities.    Any
    acquisitions that we complete may dilute your ownership interest
    in us, may have adverse effects on our business, prospects,
    financial condition and results of operations and may cause
    unanticipated liabilities.
    We may
    not successfully integrate recent or future
    acquisitions.
   22




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We are
    dependent on our key management, direct sales force and
    technical personnel for continued success.
      If we
    fail to effectively manage our growth, our financial results
    could be adversely affected.
    
    our expanding product lines;
    our marketing and sales organizations; and
    our client support organization as use of our products increases.    We may
    need additional capital in the future, which may not be
    available to us, and if we raise additional capital, it may
    dilute our stockholders ownership in us.
    
    acquiring businesses, customer, technologies, products and
    services;
    taking advantage of growth opportunities, including more rapid
    expansion;
    making capital improvements to increase our capacity;
    developing new services or products; and
    responding to competitive pressures. 23




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Our
    financing source customers may elect to use competing
    third-party services, either in addition to or instead of our
    network.
  and/or
  Some
    provisions in our certificate of incorporation and by-laws may
    deter third parties from acquiring us.
    
    our board of directors is classified into three classes, each of
    which serves for a staggered three-year term;
    only our board of directors may call special meetings of our
    stockholders;
    we have authorized undesignated preferred stock, the terms of
    which may be established and shares of which may be issued
    without stockholder approval;
    our stockholders have only limited rights to amend our
    by-laws; and
    we require advance notice for stockholder proposals.     24




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If our
    intangible assets, such as trademarks and goodwill, become
    impaired we may be required to record a significant non-cash
    charge to earnings which would negatively impact our results of
    operations.
    Funds
    associated with certain of our auction rate securities may not
    be accessible for in excess of 12 months and our investment
    portfolio has been subject to impairment charges due to the
    recent financial crisis in the capital markets and may be
    adversely impacted by further deterioration of the capital
    markets.
    The Meaning of
    Other-Than-Temporary Impairment and its Application to Certain
    Investments Other-Than-Temporary Impairment of Certain Investments in
    Debt and Equity Securities,
 25




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The
    price of our common stock may be volatile, particularly given
    the economic downturn and volatility in domestic and
    international stock markets.
    
    price and volume fluctuations in the overall stock market from
    time to time;
    actual or anticipated changes in our earnings or fluctuations in
    our operating results or in the expectations of equity research
    analysts;
    trends in the automotive and automotive finance industries;
    catastrophic events;
    loss of one or more significant customers or strategic alliances;
    significant acquisitions, strategic alliances, joint ventures or
    capital commitments by us or our competitors;
    legal or regulatory matters, including legal decisions affecting
    the indirect automotive finance industry or involving the
    enforceability or order of priority of security interests of
    electronic chattel paper affecting our electronic contracting
    product; and
    additions or departures of key employees.      Item 1B.
    Unresolved
    Staff Comments   26




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Item 2.
    Properties        Item 3.
    Legal
    Proceedings    DealerTrack Inc. v. RouteOne LLC
  04-322
    DealerTrack, Inc. v. Finance Express et al.,
    CV-06-2335;
  DealerTrack Inc. v. RouteOne and Finance Express et
    al., CV-06-6864; and
  DealerTrack Inc. v. RouteOne and Finance Express et
    al., CV-07-215
  No. CV-06-2335 patents-in-suit.
  No. CV-06-6864 patents-in-suit.
  No. CV-07-215
  The DealerTrack, Inc. v.
 27




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Markman
                    Item 4.
    Submission
    of Matters to a Vote of Security Holders  Form 10-K.
  PART II
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
    High


LowYear Ended December 31, 2008Fourth Quarter

$
16.79


$
8.84Third Quarter

$
20.82


$
13.66Second Quarter

$
22.72


$
14.08First Quarter

$
34.07


$
15.22Year Ended December 31, 2007Fourth Quarter

$
50.37


$
31.10Third Quarter

$
42.75


$
34.35Second Quarter

$
38.20


$
30.04First Quarter

$
33.25


$
26.00  28




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Dividend
    Policy
    Repurchases
      Total


MaximumNumber of


NumberShares


of SharesPurchased


Thatas Part of


May Yet beTotal Number


Average Price


Publicly


Purchasedof Shares


Paid per


Announced


Under thePeriod

Purchased


Share


Program


ProgramOctober 2008


361,041


$
12.82



360,000




(1)November 2008


45,150


$
10.48



45,000




(1)December 2008





$




n/a



n/a     (1)
    
    As of December 31, 2008, an additional $25.2 million
    of our common stock may still be purchased under the repurchase
    program.  Item 6.
    Selected
    Consolidated Financial Data     29




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Form 10-K Form 10-K.
  Year Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share and share amounts)Consolidated Statements of Operations Data:Net revenue

$
242,706


$
233,845


$
173,272


$
120,219


$
70,044Income from operations


7,052



27,531



20,739



9,831



7,722Income before (provision) benefit for income taxes


5,697



32,786



26,133



8,528



7,661Net income

$
1,736


$
19,752


$
19,336


$
4,468


$
11,253Basic net income per
    share(1)

$
0.04


$
0.50


$
0.54


$
0.17


$
0.45Diluted net income per
    share(1)(2)

$
0.04


$
0.48


$
0.51


$
0.12


$
0.02Weighted average shares outstanding


40,461,896



39,351,138



36,064,796



2,290,439



40,219Weighted average shares outstanding assuming dilution


41,673,007



41,198,773



37,567,488



3,188,180



1,025,248   As of December 31,2008


2007


2006


2005


2004(In thousands)Consolidated Balance Sheets Data:Cash and cash equivalents, short-term and long-term investments

$
203,198


$
220,144


$
171,195


$
103,264


$
21,753Working
    capital(3)


197,797



222,810



168,817



101,561



24,421Total assets


437,215



482,926



321,513



220,615



76,681Capital lease obligations (short and long-term), due to
    acquirees (short and long-term) and other long-term liabilities


11,663



11,872



10,103



9,984



7,999Total redeemable convertible participating preferred stock


















72,226Retained earnings (accumulated deficit)


20,258



18,522



(1,230
)


(20,566
)


(25,034
)Total stockholders equity (deficit)


396,220



438,362



284,337



186,671



(20,001
)     (1)
    
    For the years ended December 31, 2005 and 2004, the basic
    and diluted earnings per share calculations include adjustments
    to net income relating to preferred dividends earned, but not
    paid, and net income amounts allocated to the participating
    preferred stockholders in order to compute net income applicable
    to common stockholders in accordance with
    SFAS No. 128, Earnings per Shareand EITF
    03-6,
    Participating Securities and the Two  Class Method
    under FASB No. 128.(2)
    
    In accordance with SFAS No. 128, for the years ended
    December 31, 2008, 2007 and 2006, we have excluded 393,333,
    196,666 and 400,000 contingently issuable shares, respectively,
    from diluted weighted average common stock outstanding as their
    contingent conditions (a) have not been satisfied at the
    reporting date nor (b) would have been satisfied if the
    reporting date was the end of the contingency period (Please see
    Note 13 to the consolidated financial statements in this
    Annual Report on
    Form 10-K
    for further information).(3)
    
    Working capital is defined as current assets less current
    liabilities.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  You should read the following discussion and analysis of our
    financial condition and results of operations in conjunction
    with our consolidated financial statements and related notes
    thereto. In addition, you should read the sections entitled
    Cautionary Statements Relating to Forward-Looking
    Statements and Risk Factors in Part 1,
    Item 1 and Item 1A, respectively, in this Annual
    Report on
    Form 10-K
    .
  Overview
   30




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Year Ended December 31,2008


2007


2006EBITDA and Other Business Statistics:EBITDA(1)(10)

$
41,377


$
66,014


$
48,027Capital expenditures, software and website development costs

$
16,783


$
15,068


$
10,605Active dealers in DealerTrack network as of end of the
    year(2)


19,652



22,043



22,147Active financing sources in DealerTrack network as of end of
    year(3)


733



536



370Active lender to dealer
    relationships(4)


156,437



226,314



n/aTransactions
    processed(5)


79,655



90,869



71,515Product
    subscriptions(6)


34,243



28,966



21,681Average transaction
    price(7)

$
1.66


$
1.62


$
1.58Average subscription
    price(8)

$
248


$
245


$
246Average monthly subscription revenue per subscribing
    dealership(9)

$
550


$
474


$
415  31




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(1)
    
    EBITDA represents net income before interest (income) expense,
    taxes, depreciation and amortization. We present EBITDA because
    we believe that EBITDA provides useful information with respect
    to the performance of our fundamental business activities and is
    also frequently used by securities analysts, investors and other
    interested parties in the evaluation of comparable companies. We
    rely on EBITDA as a primary measure to review and assess the
    operating performance of our company and management team in
    connection with our executive compensation plan incentive
    payments.    
    EBITDA does not reflect our cash expenditures or future
    requirements for capital expenditures or contractual commitments;  
    EBITDA does not reflect changes in, or cash requirements for,
    our working capital needs;
    EBITDA does not reflect the interest expense, or the cash
    requirements necessary to service interest or principal
    payments, on our debts;
    Although depreciation and amortization are non-cash charges, the
    assets being depreciated and amortized will often have to be
    replaced in the future, and EBITDA does not reflect any cash
    requirements for such replacements; and
    Other companies may calculate EBITDA differently than we do,
    limiting its usefulness as a comparative measure.      Year Ended December 31,2008


2007


2006GAAP net income

$
1,736


$
19,752


$
19,336Interest income


(4,720
)


(5,606
)


(4,289
)Interest expense


324



355



268Provision for income taxes


3,961



13,034



6,797Depreciation of property and equipment and amortization of
    capitalized software and website costs


13,295



10,262



8,629Amortization of acquired identifiable intangibles


26,781



28,217



17,286EBITDA
    (Non-GAAP)(10)

$
41,377


$
66,014


$
48,027   (2)
    
    We consider a dealer to be active as of a date if the dealer
    completed at least one revenue-generating credit application
    processing transaction using the DealerTrack network during the
    most recently ended calendar month.(3)
    
    We consider a financing source to be active in our network as of
    a date if it is accepting credit application data electronically
    from dealers in the DealerTrack or DealerTrack Canada network,
    including financing sources visible to dealers through drop down
    menus. This counting methodology reflects revisions we made in
    July 2008 to more accurately reflect the number of financing
    sourced available on the network.(4)
    
    Lender to dealer relationships are made up of two components,
    the number of financing sources on the DealerTrack network and
    the number of active dealers submitting applications. Lender to
    dealer relationships 32




---



##### Table of Contents



are counted by pair. For example, one lenders relationship
    with 50 dealerships is counted as fifty relationships; the next
    lenders relationship with the same 50 dealership would
    bring our relationship count to 100.(5)
    
    Represents revenue-generating transactions processed in the
    DealerTrack, DealerTrack Digital Services and DealerTrack Canada
    networks at the end of a given period. A new agreement executed
    during the fourth quarter of 2006 resulted in a different method
    of measurement regarding transaction volumes and fees from a
    particular credit bureau provider. This agreement resulted in an
    additional 2.5 million revenue-generating transactions
    processed through the network for the year ended
    December 31, 2006.(6)
    
    Represents revenue-generating subscriptions in the DealerTrack
    and DealerTrack Canada networks at the end of a given period.(7)
    
    Represents the average revenue earned per transaction processed
    in the DealerTrack, DealerTrack Digital Services and DealerTrack
    Canada networks during a given period.(8)
    
    Represents the average revenue earned per subscription in the
    DealerTrack and DealerTrack Canada networks during a given
    period.(9)
    
    Represents net subscription revenue divided by subscribing
    dealers in the DealerTrack and DealerTrack Canada networks.(10)
    
    For the year ended December 31, 2008, EBITDA includes an
    impairment charge of $6.0 million, related to the
    significant decline in certain auction rate securities, as
    described in Note 3 in the accompanying notes to the
    consolidated financial statements included in this Annual Report
    on
    Form 10-K,
    and a charge of $1.9 million included in amortization of
    acquired identifiable intangibles, related to the impairment of
    an application processing contract, as described in Note 7
    in the accompanying notes to the consolidated financial
    statements included in this Annual Report on
    Form 10-K.
    For the year ended December 31, 2006, EBITDA includes
    $1.4 million in other income resulting from the
    DealerAccess purchase price adjustment, as described in
    Note 4 in the accompanying notes to the consolidated
    financial statements included in this Annual Report on
    Form 10-K.  Revenue
  Transaction Services Revenue.
  Subscription Services Revenue.
  Other Revenue.
  Cost of
    Revenue and Operating Expenses
  Cost of Revenue.
  Product Development Expenses.
 33




---



##### Table of Contents



Selling, General and Administrative
    Expenses.
    Acquisitions
    and Related Amortization Expense
    ® Business Combinations
         34




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
        Revenue
    Recognition
  Revenue Recognition in Financial Statements No. 00-21, Revenue Arrangements with Multiple Deliverables. SOP 97-2, Software Revenue Recognition.
  Transaction Services Revenue.
  Set-up
    Subscription Services Revenue. set-up
 35




---



##### Table of Contents



Allowance
    for Doubtful Accounts
    Goodwill,
    Other Intangibles and Long-lived Assets
  Goodwill and Other Intangible
    Assets
  No. D-101,
       36




---



##### Table of Contents



Form 10-K,
    Income
    Taxes
  Accounting for Income
    Taxes,
  Accounting for Uncertainty in Income Taxes  an
    Interpretation of FASB Statement No. 109 of FIN 48,
  Retail
    Sales Tax
   37




---



##### Table of Contents



Stock-Based
    Compensation
       38




---



##### Table of Contents



Impairment
    of auction rate securities
   39




---



##### Table of Contents



The Meaning of
    Other-Than-Temporary Impairment and its Application to Certain
    Investments Other-Than-Temporary Impairment of Certain Investments in
    Debt and Equity Securities,
  Results
    of Operations
    Year Ended December 31,2008


2007


2006$ Amount


% of Net Revenue


$ Amount


% of Net Revenue


$ Amount


% of Net Revenue(In thousands, except percentages)Consolidated Statements of Operations Data:Net
    revenue(1)

$
242,706



100.0
%

$
233,845



100.0
%

$
173,272



100.0
%Operating costs and expenses:Cost of
    revenue(1)


113,731



46.9



99,631



42.6



70,843



40.9Product development


11,658



4.8



9,808



4.2



9,153



5.2Selling, general and administrative


110,265



45.4



96,875



41.4



72,537



41.9Total operating costs and expenses


235,654



97.1



206,314



88.2



152,533



88.0Income from operations


7,052



2.9



27,531



11.8



20,739



12.0Interest income


4,720



1.9



5,606



2.4



4,289



2.5Interest expense


(324
)


(0.1
)


(355
)


(0.2
)


(268
)


(0.2
)Other income, net


205



0.1



4







1,373



0.8Impairment of auction rate securities


(5,956
)


(2.4
)














Income before provision for income taxes


5,697



2.4



32,786



14.0



26,133



15.1Provision for income taxes, net


(3,961
)


(1.7
)


(13,034
)


(5.6
)


(6,797
)


(3.9
)Net income

$
1,736



0.7
%

$
19,752



8.4
%

$
19,336



11.2
%     40




---



##### Table of Contents



Year Ended December 31,2008


2007


2006$ Amount


% of Net Revenue


$ Amount


% of Net Revenue


$ Amount


% of Net Revenue(In thousands, except percentages)(1) Related party revenue

$
2,419



1.0
%

$
2,425



1.0
%

$
33,380



19.3
%Related party cost of revenue


9



0.0
%


38



0.0
%


1,840



1.1
%   Years
    Ended December 31, 2008 and 2007
  Revenue
  Year Ended December 31,2008


2007(In thousands)Transaction services revenue

$
132,419


$
147,312Subscription services revenue


94,690



75,061Other


15,597



11,472Total net revenue

$
242,706


$
233,845     Transaction Services Revenue.
  Subscription Services Revenue.
  Other Revenue.
 41




---



##### Table of Contents



Operating
    Costs and Expenses
  Year Ended December 31,2008


2007(In thousands)Cost of revenue

$
113,731


$
99,631Product development


11,658



9,808Selling, general and administrative


110,265



96,875Total cost of revenue and operating expenses

$
235,654


$
206,314   Cost of Revenue. Form 10-K
  Product Development Expenses.
  Selling, General and Administrative
    Expenses.
  Interest
    Income
  Year Ended December 31,2008


2007(In thousands)Interest Income

$
4,720


$
5,606    42




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##### Table of Contents



Impairment
    of auction rate securities
  Year Ended December 31,2008


2007(In thousands)Impairment of auction rate securities

$
(5,956
)

$
   Form 10-K
  Provision
    for Income Taxes
  Year Ended December 31,2008


2007(In thousands)Provision for income taxes, net

$
(3,961
)

$
(13,034
)   true-ups, true-ups
   43




---



##### Table of Contents



Years
    Ended December 31, 2007 and 2006
  Revenue
  Year Ended December 31,2007


2006(In thousands)Transaction services revenue

$
147,312


$
112,752Subscription services revenue


75,061



53,352Other


11,472



7,168Total net revenue

$
233,845


$
173,272     Transaction Services Revenue.
  Subscription Services Revenue.
  Operating
    Costs and Expenses
  Year Ended December 31,2007


2006(In thousands)Cost of revenue

$
99,631


$
70,843Product development


9,808



9,153Selling, general and administrative


96,875



72,537Total cost of revenue and operating expenses

$
206,314


$
152,533   Cost of Revenue. ,
 44




---



##### Table of Contents



Product Development Expenses.
  Selling, General and Administrative
    Expenses.
  Interest
    Income
  Year Ended December 31,2007


2006(In thousands)Interest Income

$
5,606


$
4,289     Other
    Income
  Year Ended December 31,2007


2006(In thousands)Other Income, net

$
4


$
1,373   Form 10-K,
  Provision
    for Income Taxes
  Year Ended December 31,2007


2006(In thousands)Provision for income taxes, net

$
(13,034
)

$
(6,797
)    45




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##### Table of Contents



Quarterly
    Results of Operations
    First


Second


Third


FourthQuarter


Quarter


Quarter(2)


Quarter(3)(Unaudited)(In thousands, except for share and per share data)2008Net revenue

$
64,308


$
63,181


$
60,525


$
54,692Gross profit


35,696



35,302



32,585



25,392Operating income (loss)


2,822



4,208



3,056



(3,034
)Net income (loss)


2,338



3,066



(2,603
)


(1,065
)Basic net income (loss) per
    share(1)

$
0.06


$
0.07


$
(0.07
)

$
(0.03
)Diluted net income (loss) per
    share(1)

$
0.05


$
0.07


$
(0.07
)

$
(0.03
)Weighted average shares outstanding


41,636,035



41,505,503



39,769,990



38,963,048Weighted average shares outstanding assuming dilution


42,882,662



42,764,086



39,769,990



38,963,048   First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Unaudited)(In thousands, except for share and per share data)2007Net revenue

$
51,725


$
58,507


$
62,871


$
60,742Gross profit


30,425



34,349



35,193



34,247Operating income


6,797



9,755



6,834



4,145Net income


4,825



6,284



4,512



4,131Basic net income per
    share(1)

$
0.12


$
0.16


$
0.12


$
0.10Diluted net income per
    share(1)

$
0.12


$
0.15


$
0.11


$
0.10Weighted average shares outstanding


38,625,215



38,748,405



39,058,863



40,956,826Weighted average shares outstanding assuming dilution


40,231,194



40,569,993



40,840,688



42,845,842     (1)
    
    The addition of earnings per share by quarter may not equal
    total earnings per share for the year.(2)
    
    Included in the third quarter of 2008 net loss is an
    impairment charge of $5.7 million, related to the
    significant decline in certain auction rate securities, as
    described in Note 3 in the accompanying notes to the
    consolidated financial statements included in this Annual Report
    on
    Form 10-K.(3)
    
    Included in the fourth quarter of 2008 net loss is an
    impairment charge of $0.3 million, related to the
    significant decline in certain auction rate securities, as
    described in Note 3 in the accompanying notes to the
    consolidated financial statements included in this Annual Report
    on
    Form 10-K,
    and a charge of $1.9 million, related to the 46




---



##### Table of Contents



impairment of an application processing contract with DHL, as
    described in Note 7 in the accompanying notes to the
    consolidated financial statements included in this Annual Report
    on
    Form 10-K.  Liquidity
    and Capital Resources
        Form 10-K
    ® Business Combinations
     47




---



##### Table of Contents



Year Ended December 31,2008


2007


2006(In thousands)Net cash provided by operating activities

$
61,494


$
56,926


$
45,489Net cash provided by (used in) investing activities


94,874



(168,725
)


(168,390
)Net cash (used in) provided by financing activities


(47,816
)


114,216



66,740   Operating
    Activities
  Form 10-K
  Investing
    Activities
    Financing
    Activities
   48




---



##### Table of Contents



Contractual
    Obligations
    Less Than








AfterTotal


1 Year


1-3 Years


4-5 Years


5 Years(In thousands)Operating lease obligations

$
29,468


$
4,720


$
6,942


$
5,923


$
11,883Capital lease obligations


881



417



464







Payments due to acquirees


2,642



1,892



750







Total contractual cash obligation

$
32,991


$
7,029


$
8,156


$
5,923


$
11,883     gross-up Form 10-K
       49




---



##### Table of Contents



Credit
    Facility
    Off-Balance
    Sheet Arrangements
    Effects
    of Inflation
    Recent
    Accounting Pronouncements
  SFAS No. 142-3 Determination of the Useful Life of Intangible Assets SFAS No. 142-3). SFAS No. 142-3 Goodwill and Other Intangible
    Assets SFAS No. 142-3 SFAS No. 142-3
  SFAS No. 157-2, Effective Date of FASB Statement 157
  No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities No. EITF 03-6-1
  The Fair Value Option for
    Financial Assets and Financial Liabilities
 50




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Foreign
    Currency Exposure
    Interest
    Rate Exposure
    form 10-K
 51




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  INDEX TO
    FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
  PageDEALERTRACK HOLDINGS, INC.:Report of Independent Registered Public
    Accounting Firm


53Consolidated Balance Sheets


54Consolidated Statements of Operations


55Consolidated Statements of Cash Flows


56Consolidated Statements of Stockholders
    Equity and Comprehensive Income


57Notes to Consolidated Financial Statements


60Schedule II  Valuation and
    Qualifying Accounts


89  52




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm    Internal Control 
    Integrated Framework Form 10-K.
        /s/
    PricewaterhouseCoopers LLP
    53




---



##### Table of Contents



DEALERTRACK
    HOLDINGS, INC.
  CONSOLIDATED BALANCE SHEETS
  December 31,2008


2007(In thousands, except share and per share amounts)ASSETSCurrent assetsCash and cash equivalents

$
155,456


$
50,564Short-term investments


43,350



169,580Accounts receivable, net of allowances of $1,848 and $2,615 at
    December 31, 2008 and 2007, respectively


18,462



26,957Prepaid expenses and other current assets


9,624



7,305Deferred tax assets


2,195



3,827Restricted cash


142



Total current assets


229,229



258,233Long-term investments


4,392



Property and equipment, net


13,448



12,792Software and web site developments costs, net


12,705



10,771Intangible assets, net


44,405



69,528Goodwill


114,886



117,702Restricted cash


250



540Deferred taxes and other long-term assets


17,900



13,360Total assets

$
437,215


$
482,926LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
4,488


$
4,762Accrued compensation and employee benefits


7,850



12,527Accrued other


11,385



11,387Deferred revenues


5,609



4,016Due to acquirees


1,740



2,251Capital leases payable


360



480Total current liabilities


31,432



35,423Capital leases payable  long-term


454



1,076Due to acquirees  long-term


682



1,280Deferred tax liabilities  long-term


2,477



2,800Deferred revenue and other long-term liabilities


5,950



3,985Total liabilities


40,995



44,564Commitments and contingencies (Note 15)Stockholders equityPreferred stock, $0.01 par value; 10,000,000 shares
    authorized and no shares issued and outstanding at
    December 31, 2008 and 2007, respectively






Common stock, $0.01 par value; 175,000,000 shares
    authorized; 42,841,737 shares issued and
    39,833,616 shares outstanding at December 31, 2008;
    and 42,556,925 shares issued and 42,552,723 shares
    outstanding at December 31, 2007


428



426Treasury stock, at cost, 3,008,121 and 4,202 shares at
    December 31, 2008 and 2007, respectively


(50,061
)


(139
)Additional paid-in capital


428,771



413,428Deferred stock-based compensation (APB 25)


(446
)


(2,056
)Accumulated other comprehensive income


(2,730
)


8,181Retained earnings


20,258



18,522Total stockholders equity


396,220



438,362Total liabilities and stockholders equity

$
437,215


$
482,926    54




---



##### Table of Contents



DEALERTRACK
    HOLDINGS, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2008


2007


2006(In thousands, except per share and share amounts)RevenueNet
    revenue(1)

$
242,706


$
233,845


$
173,272Operating costs and expensesCost of
    revenue(1)(2)


113,731



99,631



70,843Product
    development(2)


11,658



9,808



9,153Selling, general and
    administrative(2)


110,265



96,875



72,537Total operating costs and expenses


235,654



206,314



152,533Income from operations


7,052



27,531



20,739Interest income


4,720



5,606



4,289Interest expense


(324
)


(355
)


(268
)Other income, net


205



4



1,373Impairment of auction rate securities (Note 3)


(5,956
)






Income before provision for income taxes


5,697



32,786



26,133Provision for income taxes, net


(3,961
)


(13,034
)


(6,797
)Net income

$
1,736


$
19,752


$
19,336Basic net income per share

$
0.04


$
0.50


$
0.54Diluted net income per share

$
0.04


$
0.48


$
0.51Weighted average shares outstanding


40,461,896



39,351,138



36,064,796Weighted average shares outstanding assuming dilution


41,673,007



41,198,773



37,567,488     Year Ended December 31,2008

2007

2006(In thousands)(1)  Related party revenue

$
2,419


$
2,425


$
33,380Related party cost of revenue


9



38



1,840(2)  Stock-based compensation expense recorded for the
    years ended December 31, 2008, 2007 and 2006 was classified
    as follows:   Year Ended December 31,2008


2007


2006(In thousands)Cost of revenue

$
2,497


$
2,022


$
1,115Product development


712



589



361Selling, general and administrative


10,782



8,295



9,200    55




---



##### Table of Contents



DEALERTRACK
    HOLDINGS, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2008


2007


2006(In thousands)Cash flows from operating activitiesNet income

$
1,736


$
19,752


$
19,336Adjustments to reconcile net income to net cash provided by
    operating activitiesDepreciation and amortization


40,076



38,479



25,915Deferred tax benefit


(2,051
)


(4,631
)


(11,600
)Stock-based compensation expense


13,991



10,906



10,676Provision for doubtful accounts and sales credits


9,639



6,767



4,838Loss (gain) on sale of property and equipment






17



(53
)Amortization of bond premium


132







Amortization of deferred interest


178



187



175Non cash deferred compensation


264



294



214Amortization of bank financing costs


30



122



124Stock-based compensation windfall tax benefit


(418
)


(6,995
)


(2,317
)Impairment of auction rate securities


5,956







Changes in operating assets and liabilities, net of effects of
    acquisitionsTrade accounts receivable


(1,556
)


(11,139
)


(9,290
)Accounts receivable  related party


(78
)


166



4,988Prepaid expenses and other current assets


(2,928
)


(1,286
)


(501
)Accounts payable and accrued expenses


(6,678
)


3,905



4,878Accounts payable  related party










(2,021
)Deferred revenue and other current liabilities


1,650



567



(193
)Other long-term liabilities


1,501



19



180Deferred rent


473



86



357Other long-term assets


(423
)


(290
)


(217
)Net cash provided by operating activities


61,494



56,926



45,489Cash flows from investing activitiesCapital expenditures


(6,502
)


(7,189
)


(3,228
)Funds released from escrow and other restricted cash


149







50Purchase of investments


(549,159
)


(554,445
)


(214,950
)Sale of investments


664,932



508,980



90,835Capitalized software and web site development costs


(8,560
)


(6,474
)


(3,636
)Proceeds from sale of property and equipment


3



8



58Payment for acquisition of business and intangible assets, net
    of acquired cash


(5,989
)


(109,605
)


(37,519
)Net cash provided by (used in) investing activities


94,874



(168,725
)


(168,390
)Cash flows from financing activitiesPrincipal payments on capital lease obligations


(742
)


(229
)


(394
)Proceeds from the exercise of employee stock options


951



4,009



2,685Proceeds from employee stock purchase plan


1,691



1,779



849Purchase of treasury stock


(49,922
)


(108
)


(31
)Proceeds from public offerings, net of expenses






102,192



61,617Principal payments on notes payable


(212
)


(422
)


(315
)Stock-based compensation expense windfall tax benefit


418



6,995



2,317Other










12Net cash (used in) provided by financing activities


(47,816
)


114,216



66,740Net increase (decrease) in cash and cash equivalents


108,552



2,417



(56,161
)Effect of exchange rate changes on cash and cash equivalents


(3,660
)


1,067



(23
)Beginning of year


50,564



47,080



103,264End of year

$
155,456


$
50,564


$
47,080Supplemental disclosureNon cash investing and financing activities:Assets acquired under capital leases

$



$
219


$
Acquisition of capitalized software through note payable


867







2,608Accrued capitalized hardware, software and fixed assets


795



1,186



1,133Goodwill adjustment


2,699



620



494Payable for acquired intangible assets


500







Deferred compensation expense reversal to equity


264



360



325Cash paid for:Income taxes

$
6,995


$
15,308


$
13,707Interest


128



153



82    56




---



##### Table of Contents



DEALERTRACK
    HOLDINGS, INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY AND
 COMPREHENSIVE
    INCOME
  Accumulated


RetainedCommon Stock,


Additional


Deferred


Other


Earnings


TotalPreferred Stock


Common Stock


In Treasury


Paid-In


Stock-Based


Comprehensive


(Accumulated


Stockholders


ComprehensiveShares


Amount


Shares


Amount


Shares


Amount


Capital


Compensation


Income


Deficit)


Equity


Income(In thousands, except share amounts)Balance as of January 1, 2006





$




35,379,717


$
354






$



$
214,471


$
(7,745
)

$
157


$
(20,566
)

$
186,671Exercise of stock options










387,748



4











2,681















2,685Directors deferred compensation stock units










14,917















324















324Issuance of common stock under employee stock purchase plan










42,137















849















849Compensation expense related to the employee stock purchase plan


























150















150Compensation expense related to the departure of an executive


























4,892



112











5,004Tax benefit from the exercise of stock options and restricted
    common stock


























2,317















2,317Foreign currency translation adjustment


































(120
)






(120
)


(120
)Treasury stock


















1,219



(31
)


















(31
)Issuance of restricted common stock grants










784,250



8











(7
)














1Restricted common stock grant reversal


























(355
)


355











Stock-based compensation expense (APB 25)






























1,877











1,877Stock-based compensation expense (FAS 123(R))


























2,011















2,011Restricted common stock-based compensation expense (APB 25)






























472











472Restricted common stock-based compensation expense
    (FAS 123(R))


























1,162















1,162Options and restricted share cancellations


























(625
)


625











Issuance of common stock  public offering










2,750,000



27











61,590















61,617Other


























30



(18
)










12 57




---



##### Table of Contents



Accumulated


RetainedCommon Stock,


Additional


Deferred


Other


Earnings


TotalPreferred Stock


Common Stock


In Treasury


Paid-In


Stock-Based


Comprehensive


(Accumulated


Stockholders


ComprehensiveShares


Amount


Shares


Amount


Shares


Amount


Capital


Compensation


Income


Deficit)


Equity


Income(In thousands, except share amounts)Net income






































19,336



19,336



19,336Comprehensive income













































$
19,216Balance as of December 31, 2006





$




39,358,769


$
393



1,219


$
(31
)

$
289,490


$
(4,322
)

$
37


$
(1,230
)

$
284,337Exercise of stock options










633,320



6











4,003















4,009Directors deferred compensation stock units










8,133















294















294Officers deferred compensation stock units










2,177















66















66Issuances of common stock under employee stock purchase plan










59,202



2











1,777















1,779Compensation expense related to the employee stock purchase plan


























314















314Tax benefit from the exercise of stock options and restricted
    common stock


























6,995















6,995Foreign currency translation adjustment


































8,144







8,144



8,144Treasury stock


















2,983



(108
)


















(108
)Issuance of restricted common stock grants










235,725



2











(2
)














Stock-based compensation expense (APB 25)






























1,729











1,729Stock-based compensation expense (FAS 123(R))


























4,604















4,604Restricted common stock-based compensation expense (APB 25)






























397











397Restricted common stock-based compensation expense
    (FAS 123(R))


























3,862















3,862Options and restricted share cancellations










(40,401
)














(140
)


140











Issuance of common stock  public offering










2,300,000



23











102,169















102,192Other


























(4
)














(4
)Net income






































19,752



19,752



19,752Comprehensive income













































$
27,896Balance as of December 31, 2007





$




42,556,925


$
426



4,202


$
(139
)

$
413,428


$
(2,056
)

$
8,181


$
18,522


$
438,362 58




---



##### Table of Contents



Accumulated


RetainedCommon Stock,


Additional


Deferred


Other


Earnings


TotalPreferred Stock


Common Stock


In Treasury


Paid-In


Stock-Based


Comprehensive


(Accumulated


Stockholders


ComprehensiveShares


Amount


Shares


Amount


Shares


Amount


Capital


Compensation


Income


Deficit)


Equity


Income(In thousands, except share amounts)Exercise of stock options










102,182



1











950















951Directors deferred compensation stock units










17,638















264















264Issuances of common stock under employee stock purchase plan










123,587



1











1,690















1,691Compensation expense related to the employee stock purchase plan


























299















299Tax benefit from the exercise of stock options and restricted
    common stock


























(1
)














(1
)Foreign currency translation adjustment


































(10,926
)






(10,926
)


(10,926
)Treasury stock


















3,003,919



(49,922
)


















(49,922
)Unrealized gain on auction rate securities


































15







15



15Issuance of restricted common stock grants










49,357































Stock-based compensation expense (APB 25)






























1,196











1,196Stock-based compensation expense (FAS 123(R))


























7,191















7,191Restricted common stock-based compensation expense (APB 25)






























342











342Restricted common stock-based compensation expense
    (FAS 123(R))


























5,022















5,022Options and restricted share cancellations










(7,952
)














(72
)


72











Net income






































1,736



1,736



1,736Comprehensive income













































$
18,721Balance as of December 31, 2008





$




42,841,737


$
428



3,008,121


$
(50,061
)

$
428,771


$
(446
)

$
(2,730
)

$
20,258


$
396,220    59




---



##### Table of Contents



DEALERTRACK
    HOLDINGS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Business
    Description    2.
    Summary
    of Significant Accounting Policies    Basis
    of Presentation
    Use of
    Estimates
     60




---



##### Table of Contents



Revenue
    Recognition
  Revenue Recognition in Financial Statements No. 00-21, Revenue Arrangements with Multiple Deliverables. SOP 97-2, Software Revenue Recognition.
  Transaction Services Revenue.
  Set-up
    Subscription Services Revenue. set-up
  Other Revenue.
    Shipping
    Costs
   61




---



##### Table of Contents



Cash
    and Cash Equivalents
    Short-term
    and long-term Investments
  Accounting for
    Certain Investments in Debt and Equity Securities.
    Translation
    of Non-U.S.
    Currencies
    Allowance
    for Doubtful Accounts
    Property,
    Equipment and Depreciation
    Software
    and Web Site Development Costs and Amortization
  SOP No. 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use EITF 00-2, Accounting for Web Site Development Costs.
 62




---



##### Table of Contents



Goodwill,
    Other Intangibles and Long-lived Assets
  Goodwill and Other
    Intangible Assets
  No. D-101,
           63




---



##### Table of Contents



Income
    Taxes
  Accounting for Income Taxes
  Accounting for Uncertainty in Income Taxes  an
    Interpretation of FASB Statement No 109 of FIN 48
  Advertising
    Expenses
    Concentration
    of Credit Risk
      Net
    Income per Share
  Earnings per Share.
 64




---



##### Table of Contents



Year Ended December 31,2008


2007


2006Numerator:Net income

$
1,736


$
19,752


$
19,336Denominator:Weighted average common stock outstanding (basic)


40,461,896



39,351,138



36,064,796Common equivalent shares from options to purchase common stock,
    restricted common stock and contingent Long-Term Incentive
    Equity Awards


1,211,111



1,847,635



1,502,692Weighted average common stock outstanding (diluted)


41,673,007



41,198,773



37,567,488Basic net income per share

$
0.04


$
0.50


$
0.54Diluted net income per
    share(1)

$
0.04


$
0.48


$
0.51     (1)
    
    In accordance with SFAS No. 128, for the years ended
    December 31, 2008, 2007 and 2006, we have excluded 393,333,
    196,666 and 400,000 contingently issued shares, respectively,
    from diluted weighted average common stock outstanding as their
    contingent considerations (a) have not been satisfied at
    the reporting date nor (b) would have been satisfied if the
    reporting date was the end of the contingency period (Refer to
    Note 13 for further information).    Year Ended December 31,2008


2007


2006Stock options


2,257,841



476,464



819,500Restricted common stock


202,513



36,877



59,667Total


2,460,354



513,341



879,167   Stock-Based
    Compensation
     65




---



##### Table of Contents



Year Ended December 31,2008


2007


2006Stock options

$
8,331


$
6,333


$
8,671Restricted common stock


5,361



4,260



1,855ESPP


299



313



150Total stock-based compensation expense

$
13,991


$
10,906


$
10,676   and/or
     66




---



##### Table of Contents



Year EndedDecember 31,2006Stock options, restricted common stock and employee stock
    purchase plan compensation expense recognized:Cost of revenue

$
753Product development


252Selling, general and administrative


2,658Total stock-based compensation expense


3,663Related deferred income tax benefit


(1,429
)Decrease in net income

$
2,234Decrease in basic earnings per share

$
0.06Decrease in diluted earnings per share

$
0.06     Year Ended December 31,2008


2007


2006Expected life (in
    years)(1)


4.33 - 4.47



4.33 - 6.25



6.25Risk-free interest rate


2.35 - 3.14
%


3.09 - 4.76
%


4.27 - 5.04
%Expected
    volatility(2)


47 - 48.6
%


47
%


47
%Expected dividend yield


0
%


0
%


0
%     (1)
    
    For the year ended December 31, 2008, the expected lives of
    options were determined based on the historical lives of similar
    entities whose common shares are publicly traded. For the year
    ended December 31, 2007 and 2006, the expected lives of
    options were determined based on the simplified
    method under the provisions of SAB 107. Due to our limited
    history as a public company, we believe we do not have
    appropriate historical experience to estimate future exercise
    patterns. As more information becomes available, we may revise
    this estimate on a prospective basis.(2)
    
    For the years ended December 31, 2008, 2007, and 2006, we
    estimated our expected volatility based on the historical
    volatility of similar entities whose common shares are publicly
    traded.      Recent
    Accounting Pronouncements
  SFAS No. 142-3 Determination of the Useful Life of Intangible Assets SFAS No. 142-3). SFAS No. 142-3 Goodwill and Other Intangible
    Assets SFAS No. 142-3 SFAS No. 142-3
 67




---



##### Table of Contents



SFAS No. 157-2, Effective Date of FASB Statement 157
  No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities No. EITF 03-6-1
  The Fair Value Option for
    Financial Assets and Financial Liabilities
    3.
    Fair
    Value Measurements  Fair Value
    Measurements
  
    Level 1  Quoted prices (unadjusted) in active
    markets that are accessible at the measurement date for assets
    or liabilities. The fair value hierarchy gives the highest
    priority to Level 1 inputs.
    Level 2  Observable prices that are based on
    inputs not quoted on active markets, but corroborated by market
    data.
    Level 3  Unobservable inputs are used when
    little or no market data is available. The fair value hierarchy
    gives the lowest priority to Level 3 inputs. 68




---



##### Table of Contents



Quoted Prices


Significant Other


Significant


Totalin Active Markets


Observable Inputs


Unobservable Inputs


Carrying(Level 1)


(Level 2)


(Level 3)


ValueCash
    equivalents(1)

$
124,497


$



$



$
124,497Short-term
    investments(2)(3)


42,490



860







43,350Long-term
    investments(4)






2,842



1,550



4,392Total

$
166,987


$
3,702


$
1,550


$
172,239     (1)
    
    Cash equivalents consist primarily of money market funds with
    original maturity dates of three months or less, for which we
    determine fair value through quoted market prices.(2)
    
    Level 1 short-term investments consist primarily of
    corporate bonds and municipal notes with maturity dates of one
    year or less, for which we determine fair value through quoted
    market prices.(3)
    
    Level 2 short-term and long-term investments consist of
    auction rate securities (ARS) invested in tax-advantaged
    preferred stock trusts in which the underlying equities are
    preferred stock of financial institutions. As of
    December 31, 2008, we have $3.7 million (net of
    impairment charge) of ARS invested in tax-advantaged preferred
    stock trusts. Our investments securities are classified as
    available for sale and reported at fair value. ARS have
    long-term underlying maturities, but have interest rates that
    reset every six months or less. The $3.7 million invested
    in tax-advantaged preferred stock trust securities are
    associated with failed auctions, for which we have been, or
    expect to be notified that the trust will be dissolved and will
    distribute the underlying security. As we expect to receive the
    liquid underlying preferred stock instruments within ninety days
    of year end, we believe that the most representative measure of
    fair value of these trusts to be the quoted market prices of the
    underlying preferred stock instruments. Based upon our
    assessment we reduced the fair value of the investments in the
    preferred stock trusts from $9.6 million to
    $3.7 million and recorded an
    other-than-temporary
    charge of $6.0 million to earnings and an unrealized gain
    of $0.1 million to stockholders equity during the
    year ended December 31, 2008.(4)
    
    Level 3 long-term investments consist of auction rate
    securities (ARS) invested in tax-exempt state government
    obligations that was valued at par. Our intent is not to hold
    the $1.6 million of ARS invested in tax-exempt state
    government obligations to maturity, but rather use the interest
    reset feature to provide liquidity as necessary.  The Meaning of
    Other-Than-Temporary
    Impairment and its Application to Certain Investments Other-Than-Temporary
    Impairment of Certain Investments in Debt and Equity Securities, other-than-temporary. other-than-temporary. other-than-temporary.
 69




---



##### Table of Contents



Balance as of January 1, 2008

$
Reclassification from Level 1 investments to Level 3
    investments


169,580Reclassification from Level 3 investments to Level 2
    investments


(3,936
)Net sales of auction rate securities


(158,430
)Other-than-temporary
    impairment included in net income


(5,664
)Balance as of December 31, 2008

$
1,550   4.
    Business
    Combinations  AutoStyleMart,
    Inc. (ASM)
      Current assets

$
69Property and equipment


32Intangible assets


4,126Goodwill


808Total assets acquired


5,035Total liabilities assumed


(1,018
)Net assets acquired

$
4,017        70




---



##### Table of Contents



Arkona,
    Inc. (Arkona)
      Current assets

$
2,842Property and equipment


2,065Other assets


191Intangible assets


25,660Goodwill


39,091Total assets acquired


69,849Total liabilities assumed


(9,876
)Net assets acquired

$
59,973         Curomax
    Corporation and its subsidiaries (collectively,
    Curomax)
   71




---



##### Table of Contents



Current assets

$
1,925Property and equipment


339Intangible assets


21,670Goodwill


21,929Total assets acquired


45,863Total liabilities assumed


(5,154
)Net assets acquired

$
40,709         DealerWare
    L.L.C. (DealerWare)
    Current assets

$
12Intangible assets


2,200Goodwill


2,942Total assets acquired


5,154Total liabilities assumed


Net assets acquired

$
5,154      72




---



##### Table of Contents



Global
    Fax, L.L.C. (Global Fax)
    Current assets

$
1,261Property and equipment


537Other long-term assets


14Intangible assets


11,192Goodwill


11,718Total assets acquired


24,722Total liabilities assumed


(167
)Net assets acquired

$
24,555       WiredLogic,
    Inc. (DealerWire)
    Current assets

$
18Property and equipment


36Other long-term assets


5Intangible assets


2,262Goodwill


3,734Total assets acquired


6,055Total liabilities assumed


(22
)Net assets acquired

$
6,033    73




---



##### Table of Contents



DealerAccess
    Purchase Price Adjustment
      Automotive
    Lease Guide Purchase Price Adjustment
    5.
    Related
    Party Transactions  Service
    Agreements with Related Parties  Other Service and
    Information Providers
      Service
    Agreement with Related Parties  Financing
    Sources
   74




---



##### Table of Contents



6.
    Property
    and Equipment    Estimated Useful


December 31,Life (Years)


2008


2007Computer equipment


3 - 5


$
20,431


$
16,719Office equipment


5



2,896



2,189Furniture and fixtures


5



3,068



2,840Leasehold improvements


5 -11



1,233



992Total property and equipment, gross






27,628



22,740Less: Accumulated depreciation and amortization






(14,180
)


(9,948
)Total property and equipment, net





$
13,448


$
12,792     7.
    Intangible
    Assets    December 31,


December 31,2008


2007Gross





Gross





AmortizationBook


Accumulated


Book


Accumulated


PeriodValue


Amortization


Value


Amortization


(Years)Customer contracts

$
33,673


$
(17,289
)

$
41,569


$
(14,789
)


2-4Database


13,333



(8,818
)


16,433



(9,577
)


3-6Trade names


10,500



(5,469
)


10,500



(4,460
)


5-10Technology


22,684



(7,209
)


35,212



(16,618
)


2-5Non-compete agreement


10,697



(7,697
)


14,062



(6,214
)


2-5Application processing contract










4,400



(1,029
)


5Other










900



(861
)


5Total

$
90,887


$
(46,482
)

$
123,076


$
(53,548
)    75




---



##### Table of Contents



8.
    Goodwill    Balance as of January 1, 2008

$
117,702Purchase price adjustments  Curomax (see Note 4)


1,799Impact of change in Canadian dollar exchange rate


(4,610
)Purchase price adjustments  ALG (Note 4)


1,139Purchase price adjustments  Arkona (Note 4)


(836
)Other


(308
)Balance as of December 31, 2008

$
114,886     Balance as of January 1, 2007

$
52,499Acquisition of Curomax (see Note 4)


20,130Impact of change in Canadian dollar exchange rate


3,768Acquisition of Arkona (see Note 4)


39,927Acquisition of AutoStyleMart (see Note 4)


803Purchase price adjustments  ALG


547Purchase price adjustments  Go Big


74Other adjustments


(46
)Balance as of December 31, 2007

$
117,702  76




---



##### Table of Contents



9.
    Other
    Accrued Liabilities    December 31,


December 31,2008


2007Customer deposits

$
2,749


$
2,773Revenue share


1,700



1,196Taxes


1,511



3,379Accrued Curomax contingent consideration (Note 4)


1,837



Software licenses


1,341



1,212Professional fees


1,158



1,462Public company costs


240



174Severance


34



271Other


815



920Total other accrued liabilities

$
11,385


$
11,387   10.
    Public
    Offerings      11.
    401(k)
    Plan    12.
    Income
    Taxes    Year Ended December 31,2008


2007


2006United States

$
(2,467
)

$
29,433


$
23,554Canada


8,164



3,353



2,579Total income before taxes

$
5,697


$
32,786


$
26,133  77




---



##### Table of Contents



Year Ended December 31,2008


2007


2006Current tax:Federal

$
2,440


$
14,123


$
15,558State and local


290



2,373



2,839Canada


3,283



1,169



Total current tax


6,013



17,665



18,397Deferred tax:Federal


(1,783
)


(5,757
)


(8,510
)State and local


(913
)


179



(471
)Canada


644



947



(2,619
)Total deferred tax


(2,052
)


(4,631
)


(11,600
)Provision for income taxes, net

$
3,961


$
13,034


$
6,797       December 31,2008


2007Deferred tax assets:Net operating loss carryforwards

$
4,465


$
8,092Depreciation and amortization






143Deferred compensation


11,053



7,543Acquired intangibles


5,650



1,230Tax credits






511Impairment loss


2,171



Other


2,021



2,94025,360



20,459Deferred tax liabilities:Acquired Intangibles


(1,299
)


(2,795
)Capitalized software and web site development


(2,076
)


(2,264
)Depreciation and amortization


(864
)


Tax credits


(100
)


Other


(1,144
)


(733
)19,877



14,667Deferred tax asset valuation allowance


(3,322
)


(954
)Total Deferred tax assets, net

$
16,555


$
13,713      78




---



##### Table of Contents



Year Ended December 31,2008


2007


2006Pre-tax book income


35.0
%


35.0
%


35.0
%State taxes


(2.7
)


3.5



6.0Foreign rate differential


18.8



2.8



0.2Deferred tax rate adjustment


(7.9
)


1.5



2.3Valuation allowance and other


26.3



(3.1
)


(17.5
)Total


69.5
%


39.7
%


26.0
%        79




---



##### Table of Contents



Balance January 1, 2008

$
0.1Additions


0.4Payments


Balance December 31, 2008

$
0.5Balance January 1, 2007

$
0.4Additions


Payments


(0.3
)Balance December 31, 2007

$
0.1     13.
    Stock
    Option and Deferred Compensation Plans  2001
    Stock Option Plan
    Second
    Amended and Restated 2005 Incentive Award Plan
    
    any shares underlying grants that are forfeited, cancelled or
    are terminated are added back for issuance;
    shares tendered or held for taxes will not be added to the
    reserved pool;
    upon the exercise of a stock appreciation rights, or SAR, the
    gross number of shares will be reduced from the pool;
    we may grant non-qualified stock options, restricted common
    stock, SARs, performance shares, performance stock units,
    dividend equivalent units, stock payment awards, deferred stock
    awards, restricted stock units performance-based awards payable
    in either cash or in shares to our employees, directors or
    consultants, and additionally, we may grant incentive stock
    options to our employees;
    the option term for new stock options is now limited to seven
    years;
    the maximum number of shares of common stock that may be awarded
    to any one person during any one year is 750,000 shares and
    the maximum amount payable with respect to cash performance
    bonus awards during any fiscal year is limited to $3,000,000; 80




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##### Table of Contents




    to ensure that certain awards granted as performance-based
    compensation under section 162(m) of the Internal
    Revenue Code of 1986, the compensation committee may require
    that the vesting of such awards be conditioned on the
    satisfaction of performance criteria; and
    the term of the Restated 2005 Plan is now extended to
    April 29, 2018.      Number of


Weighted-AverageShares


Exercise PriceBalance as of January 1, 2008


3,918,595


$
14.2141Options Granted


1,041,900


$
23.6416Options Exercised


(102,182
)

$
9.3085Options Cancelled


(124,964
)

$
27.3064Balance as of December 31, 2008


4,733,349


$
16.0616Vested and unvested expected to vest as of December 31, 2008


4,610,656


$
15.8334       Options Outstanding


Options ExercisableWeighted-











Weighted-Average


Weighted-


Aggregate





Average


Weighted-


AggregateNumber of


Remaining


Average


Intrinsic





Remaining


Average


IntrinsicShares


Contractual


Exercise


Value


Number


Contractual


Exercise


ValueExercise Price Range

Outstanding


Life in Years


Price


(000)


Exercisable


Life in Years


Price


(000)$2.80-$47.98


4,733,349



5.5863


$
16.0616


$
14,617



3,024,306



5.3634


$
10.7873


$
14,555      81




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##### Table of Contents



Restricted Common StockWeightedNumber of


Average GrantShares


Date Fair ValueNon-vested as of January 1, 2008


983,129


$
16.0433Awards granted


49,357


$
19.9127Awards vested


(141,510
)

$
27.1847Awards canceled/expired/forfeited


(7,801
)

$
28.8505Non-vested as of December 31, 2008


883,175


$
14.3609     Employee
    Stock Purchase Plan
    Employees
    Deferred Compensation Plan
    Directors
    Deferred Compensation Plan
   82




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##### Table of Contents



Long
    Term Incentive Equity Awards
        July 21,

November 2,

August 2,2007

2006

2006Expected volatility


47.00
%


40.00
%


40.00
%Expected dividend yield


0.00
%


0.00
%


0.00
%Expected life (in years)


2.37



3.16



3.42Risk-free interest rate


4.43
%


4.91
%


4.99
%Weighted-average fair value of EBITDA Performance Award

$
38.01


$
25.39


$
18.95     July 21,


November 2,


August 2,2007


2006


2006Expected volatility


47.00
%


40.00
%


40.00
%Expected dividend yield


0.00
%


0.00
%


0.00
%Expected life (in years)


2.37



1.16-3.16



1.41-3.42Risk-free interest rate


4.43
%


4.55-4.91
%


4.83-4.99
%Weighted-average fair value of Market Value Award

$
29.77


$
15.86


$
7.49  83




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##### Table of Contents



14.
    Stock
    Repurchase Program    15.
    Commitments
    and Contingencies  Operating
    Leases
      Years Ending December 31,2009

$
4,7202010


3,7562011


3,1862012


3,0622013


2,861Thereafter


11,883$
29,468   Capital
    Leases
    As of December 31,2008


2007Computer equipment

$
1,486


$
1,486Furniture and fixtures


203



2031,689



1,689Less: Accumulated depreciation


(870
)


(274
)$
819


$
1,415  84




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##### Table of Contents



Years Ending December 31,2009

$
4172010


3492011


115Total minimum lease payments


881Less: Amount representing taxes, included in total minimum lease
    payments


(50
)Net minimum lease payments


831Less: Amount representing interest


(67
)Present value of net minimum lease payments

$
764   Retail
    Sales Tax
           85




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##### Table of Contents



Commitments
  gross-up
  and/or and/or
    Legal
    Proceedings
    DealerTrack
    Inc. v. RouteOne LLC
  04-322
    DealerTrack,
    Inc. v. Finance Express et al., CV-06-2335;
  DealerTrack
    Inc. v. RouteOne and Finance Express et al., CV-06-6864;
    and
  DealerTrack
    Inc. v. RouteOne and Finance Express et al.,
    CV-07-215
  No. CV-06-2335 patents-in-suit.
 86




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##### Table of Contents



No. CV-06-6864 patents-in-suit.
  No. CV-07-215
  Markman
                    16.
    Segment
    Information  Disclosures about
    Segments of an Enterprise and Related Information
 87




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##### Table of Contents



Year Ended December 31,2008


2007


2006Transaction services revenue

$
132,419


$
147,312


$
112,752Subscription services revenue


94,690



75,061



53,352Other


15,597



11,472



7,168Total net revenue

$
242,706


$
233,845


$
173,272   17.
    Credit
    Facility    18.
    Subsequent
    Events  Realignment
    of Workforce and Business
    AAX
    Asset Acquisition
  ® Business Combinations
  Exit
    from SCS Business
   88




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##### Table of Contents



DEALERTRACK
    HOLDINGS, INC.
 SCHEDULE II



VALUATION AND QUALIFYING ACCOUNTS  Balance at


Additions








Balance atBeginning of


Charged to





Other


End ofDescription

Period


Expenses


Deductions


Adjustments


Period(In thousands)As of December 31, 2008:Allowance for doubtful accounts

$
1,730


$
4,225


$
(5,007
)

$



$
948Allowance for sales credits


885



5,414



(5,399
)






900Deferred tax valuation allowance


954



141







2,227
(1)


3,322As of December 31, 2007:Allowance for doubtful accounts

$
1,884


$
3,620


$
(3,883
)

$
109


$
1,730Allowance for sales credits


2,523



3,147



(4,785
)






885Deferred tax valuation allowance


214



109







631
(2)


954As of December 31, 2006:Allowance for doubtful accounts

$
1,531


$
1,527


$
(1,174
)

$



$
1,884Allowance for sales credits


1,133



3,311



(1,921
)






2,523Deferred tax valuation allowance


4,245



214



(4,245
)(3)






214     (1)
    
    For the year ended December 31, 2008, the deferred tax
    valuation allowance was increased by $2.2 million primarily
    due to an impairment loss on auction rate securities and was
    further increased by expenses in various states.(2)
    
    For the year ended December 31, 2007, the deferred tax
    valuation allowance was increased by $0.6 million primarily
    due to acquisitions during 2007 and was further increased by
    expenses in various states.(3)
    
    For the year ended December 31, 2006, the deferred tax
    asset valuation was reversed by $4.2 million. Included in
    this reversal is a $0.7 million adjustment to goodwill
    relating to the net operating loss acquired but not recognized
    at the date of acquisition of DealerAccess in January 2004.  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
  Rules 13a- 15d- Form 10-K,
  Changes
    in Internal Control Over Financial Reporting
   89




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##### Table of Contents



Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
      Item 9B.
    Other
    Information    PART III
    Item 10.
    Directors,
    Executive Officers of Corporate Governance    Item 11.
    Executive
    Compensation  Form 10-K
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Form 10-K
 90




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  Form 10-K
  Item 14.
    Principal
    Accountant Fees and Services  Form 10-K
 91




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##### Table of Contents



PART IV
  Item 15.
    Exhibits,
    Financial Statement Schedule  Form 10-K:
                    Number

Description3.1(4)

Form of Fifth Amended and Restated Certificate of Incorporation
    of DealerTrack Holdings, Inc.3.2(4)

Form of Amended and Restated By-laws of DealerTrack Holdings,
    Inc.4.1(1)

Fourth Amended and Restated Registration Rights Agreement, dated
    as of March 19, 2003, among DealerTrack Holdings, Inc. and the
    stockholders of DealerTrack Holdings, Inc. party thereto.4.2(3)

Form of Certificate of Common Stock.10.1(2)

Transition Services Agreement, dated as of March 19, 2003, by
    and among DealerTrack Holdings, Inc., Credit Online, Inc.,
    DealerTrack, Inc., First American Credit Management Solutions,
    Inc. and First American Real Estate Solutions, LLC.10.2(2)

Joint Marketing Agreement, dated as of March 19, 2003, by and
    among DealerTrack Holdings, Inc., DealerTrack, Inc., Credit
    Online, Inc. and First American CREDCO, a division of First
    American Real Estate Solutions, LLC.10.3(2)

First Amendment to the Joint Marketing Agreement by and among
    DealerTrack Holdings, Inc., DealerTrack, Inc., Credit Online,
    Inc. and First American CREDCO, a division of First American
    Real Estate Solutions, LLC, dated as of December 1, 2004.10.4(2)

Agreement between DealerTrack, Inc. and CreditReportPlus, LLC,
    dated as of December 1, 2004.10.5(2)

Application Service Provider Contract, dated as of April 15,
    2005, between First American Credit Management Solutions, Inc.
    and DealerTrack, Inc.10.6(2)

Non-Competition Agreement, dated as of March 19, 2003, by and
    among DealerTrack Holdings, Inc., Credit Online, Inc., First
    American Credit Management Solutions, Inc. and The First
    American Corporation.10.7(2)

License Agreement, made and entered into as of February 1, 2001,
    by and between The Chase Manhattan Bank and J.P. Morgan
    Partners (23A SBIC Manager), Inc.10.8(2)

Asset Purchase Agreement, dated as of May 25, 2005, by and among
    Santa Acquisition Corporation, Automotive Lease Guide (alg),
    LLC, Automotive Lease Guide (alg) Canada, Inc., Douglas W.
    Aiken, John A. Blair and Raj Sundaram.10.9(11)

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between Mark F. ONeil
    and DealerTrack Holdings, Inc.10.10*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and between
    Mark F. ONeil and DealerTrack Holdings, Inc. 92




---



##### Table of Contents



Number

Description10.11*

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between David Trinder and
    DealerTrack Holdings, Inc.10.12*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and
    between David Trinder and DealerTrack Holdings, Inc.10.13(11)

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between Eric D. Jacobs and
    DealerTrack Holdings, Inc.10.14*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and between
    Eric D. Jacobs and DealerTrack Holdings, Inc.10.15(11)

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between Raj Sundaram and
    DealerTrack Holdings, Inc.10.16*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and between
    Raj Sundaram and DealerTrack Holdings, Inc.10.17(9)

Letter Agreement, dated October 23, 2006, from DealerTrack, Inc.
    to Raj Sundaram regarding relocation.10.18(9)

Unfair Competition and Nonsolicitation Agreement, dated as of
    May 25, 2005, by and between Raj Sundaram and Automotive Lease
    Guide (alg), Inc.10.19(9)

Amendment No. 1 to Unfair Competition and Nonsoliciation
    Agreement, made as of August 21, 2006, by and between Automotive
    Lease Guide (alg), Inc. and Raj Sundaram.10.20(11)

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between Robert Cox and
    DealerTrack Holdings, Inc.10.21*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and between
    Robert Cox and DealerTrack Holdings, Inc.10.22(1)

2001 Stock Option Plan of DealerTrack Holdings, Inc., effective
    as of August 10, 2001.10.23(1)

First Amendment to 2001 Stock Option Plan of DealerTrack
    Holdings, Inc., effective as of December 28, 2001.10.24(1)

Second Amendment to 2001 Stock Option Plan of DealerTrack
    Holdings, Inc., effective as of March 19, 2003.10.25(1)

Third Amendment to 2001 Stock Option Plan of DealerTrack
    Holdings, Inc., effective as of January 30, 2004.10.26(6)

Fourth Amendment to 2001 Stock Option Plan of DealerTrack
    Holdings, Inc. effective as of February 10, 2006.10.27(10)

Second Amended and Restated 2005 Incentive Award Plan, effective
    as of June 3, 2008.10.28(8)

Amendment to Asset Purchase Agreement, dated October 18, 2006,
    by and among Santa Acquisition Corporation, Automotive Lease
    Guide (alg), LLC, Automotive Lease Guide (alg) Canada, Inc.,
    Douglas W. Aiken, John A. Blair and Raj Sundaram.10.29(5)

Form of Stock Option Agreement.10.30(5)

Form of Restricted Stock Agreement.10.31*

Form of Restricted Stock Unit Agreement.10.32(1)

Senior Executive Incentive Bonus Plan, effective as of May 26,
    2005.10.33(9)

Stock Ownership and Retention Program, adopted May 26, 2005.10.34(1)

Employee Stock Purchase Plan, adopted May 26, 2005.10.35(1)

Directors Deferred Compensation Plan, effective as of June
    30, 2005.10.36(11)

First Amendment to DealerTrack Holdings, Inc. Directors
    Deferred Compensation Plan effective as of January 1, 2007.10.37(1)

Employees Deferred Compensation Plan, effective as of June
    30, 2005.10.38(11)

First Amendment to DealerTrack Holdings, Inc. Employees
    Deferred Compensation Plan effective as of January 1, 2007.10.39(1)

401(k) Plan, effective as of January 1, 2001, as amended.10.40(2)

Lease Agreement, dated as of August 5, 2004, between iPark Lake
    Success, LLC and DealerTrack, Inc. 93




---



##### Table of Contents



Number

Description10.41(4)

Lender Integration Support Agreement, dated as of September 1,
    2005, between First American CMSI Inc. and DealerTrack, Inc.10.42(7)

Shares Purchase Agreement, made as of January 16, 2007, among
    certain shareholders of Curomax Corporation and all of the
    shareholders of 2044904 Ontario Inc., 2044903 Ontario Inc. and
    2044905 Ontario Inc. and 6680968 Canada Inc.14.1(6)

Code of Business Conduct and Ethics.21.1*

List of Subsidiaries.23.1*

Consent of PricewaterhouseCoopers LLP.31.1*

Certification of Mark F. ONeil pursuant to Rule 13a-14(a)
    and 15d-14(a), as adopted pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.31.2*

Certification of Robert J. Cox III pursuant to Rule
    13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of
    the Sarbanes-Oxley Act of 2002.32.1*

Certification of Mark F. ONeil and Robert J. Cox III
    pursuant 18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.(1)
    
    Incorporated by reference to our Registration Statement on
    Form S-1
    (File
    No. 333-126944)
    filed July 28, 2005.(2)
    
    Incorporated by reference to Amendment No. 1 to our
    Registration Statement on
    Form S-1
    (File
    No. 333-126944)
    filed September 22, 2005.(3)
    
    Incorporated by reference to Amendment No. 2 to our
    Registration Statement on
    Form S-1
    (File
    No. 333-126944)
    filed October 12, 2005.(4)
    
    Incorporated by reference to Amendment No. 3 to our
    Registration Statement on
    Form S-1
    (File
    No. 333-126944)
    filed October 24, 2005.(5)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    filed May 12, 2006.(6)
    
    Incorporated by reference to our Annual Report on
    Form 10-K
    filed March 30, 2006.(7)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    dated January 16, 2007 filed January 18, 2007.(8)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    filed November 14, 2006.(9)
    
    Incorporated by reference to our Annual Report on
    Form 10-K
    filed March 16, 2007.  (10)
    
    Incorporated by reference to Exhibit I to our Definitive
    Proxy Statement, filed on April 29, 2008.(11)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    filed August 9, 2007 .  Form 10-K 1-800-SEC-0330 http://www.sec.gov.
 94




---



##### Table of Contents



SIGNATURE
      
  By:
    /s/  Robert
    J. Cox III        SIGNATURES
  Pursuant to the requirements of the Securities Exchange Act
    of 1934, as amended, this report has been signed below by the
    following persons on behalf of the registrant and in the
    capacities and on the dates indicated.
  Signature

Title

Date/s/  Mark
    F. ONeilMark
    F. ONeil

Chairman of the Board, President and Chief Executive Officer
    (principal executive officer)

February 24, 2009/s/  Robert
    J. Cox IIIRobert
    J. Cox III

Senior Vice President, Chief Financial Officer and Treasurer
    (principal financial and accounting officer)

February 24, 2009/s/  Mary
    Cirillo-GoldbergMary
    Cirillo-Goldberg

Director

February 24, 2009/s/  Ann
    B. LaneAnn
    B. Lane

Director

February 24, 2009/s/  John
    J. McDonnell, Jr.John
    J. McDonnell, Jr.

Director

February 24, 2009/s/  James
    David Power IIIJames
    David Power III

Director

February 24, 2009/s/  Howard
    L. TischlerHoward
    L. Tischler

Director

February 24, 2009/s/  Barry
    ZwarensteinBarry
    Zwarenstein

Director

February 24, 2009/s/  James
    FoyJames
    Foy

Director

February 24, 2009  95




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##### Table of Contents



EXHIBIT INDEX
    TO ANNUAL REPORT ON
    FORM 10-K
  FOR
    FISCAL YEAR ENDED DECEMBER 31, 2008
  Number

Description3.1(4)

Form of Fifth Amended and Restated Certificate of Incorporation
    of DealerTrack Holdings, Inc.3.2(4)

Form of Amended and Restated By-laws of DealerTrack Holdings,
    Inc.4.1(1)

Fourth Amended and Restated Registration Rights Agreement, dated
    as of March 19, 2003, among DealerTrack Holdings, Inc. and
    the stockholders of DealerTrack Holdings, Inc. party thereto.4.2(3)

Form of Certificate of Common Stock.10.1(2)

Transition Services Agreement, dated as of March 19, 2003,
    by and among DealerTrack Holdings, Inc., Credit Online, Inc.,
    DealerTrack, Inc., First American Credit Management Solutions,
    Inc. and First American Real Estate Solutions, LLC.10.2(2)

Joint Marketing Agreement, dated as of March 19, 2003, by
    and among DealerTrack Holdings, Inc., DealerTrack, Inc., Credit
    Online, Inc. and First American CREDCO, a division of First
    American Real Estate Solutions, LLC.10.3(2)

First Amendment to the Joint Marketing Agreement by and among
    DealerTrack Holdings, Inc., DealerTrack, Inc., Credit Online,
    Inc. and First American CREDCO, a division of First American
    Real Estate Solutions, LLC, dated as of December 1, 2004.10.4(2)

Agreement between DealerTrack, Inc. and CreditReportPlus, LLC,
    dated as of December 1, 2004.10.5(2)

Application Service Provider Contract, dated as of
    April 15, 2005, between First American Credit Management
    Solutions, Inc. and DealerTrack, Inc.10.6(2)

Non-Competition Agreement, dated as of March 19, 2003, by
    and among DealerTrack Holdings, Inc., Credit Online, Inc., First
    American Credit Management Solutions, Inc. and The First
    American Corporation.10.7(2)

License Agreement, made and entered into as of February 1,
    2001, by and between The Chase Manhattan Bank and
    J.P. Morgan Partners (23A SBIC Manager), Inc.10.8(2)

Asset Purchase Agreement, dated as of May 25, 2005, by and
    among Santa Acquisition Corporation, Automotive Lease Guide
    (alg), LLC, Automotive Lease Guide (alg) Canada, Inc., Douglas
    W. Aiken, John A. Blair and Raj Sundaram.10.9(11)

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between Mark F.
    ONeil and DealerTrack Holdings, Inc.10.10*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and
    between Mark F. ONeil and DealerTrack Holdings, Inc.10.11*

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between David Trinder
    and DealerTrack Holdings, Inc.10.12*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and
    between David Trinder and DealerTrack Holdings, Inc.10.13(11)

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between Eric D. Jacobs
    and DealerTrack Holdings, Inc.10.14*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and
    between Eric D. Jacobs and DealerTrack Holdings, Inc.10.15(11)

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between Raj Sundaram and
    DealerTrack Holdings, Inc.10.16*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and
    between Raj Sundaram and DealerTrack Holdings, Inc.10.17(9)

Second Amendment to 2001 Stock Option Plan of DealerTrack
    Holdings, Inc., effective as of March 19, 2003.10.18(9)

Unfair Competition and Nonsolicitation Agreement, dated as of
    May 25, 2005, by and between Raj Sundaram and Automotive
    Lease Guide (alg), Inc.10.19(9)

Amendment No. 1 to Unfair Competition and Nonsoliciation
    Agreement, made as of August 21, 2006, by and between
    Automotive Lease Guide (alg), Inc. and Raj Sundaram.10.20(11)

Amended and Restated Senior Executive Employment Agreement,
    dated as of August 8, 2007, by and between Robert Cox and
    DealerTrack Holdings, Inc.




---



##### Table of Contents



Number

Description10.21*

Amendment No. 1 To Amended and Restated Senior Executive
    Employment Agreement, dated December 31, 2008, by and
    between Robert Cox and DealerTrack Holdings, Inc.10.22(1)

2001 Stock Option Plan of DealerTrack Holdings, Inc., effective
    as of August 10, 2001.10.23(1)

First Amendment to 2001 Stock Option Plan of DealerTrack
    Holdings, Inc., effective as of December 28, 2001.10.24(1)

Second Amendment to 2001 Stock Option Plan of DealerTrack
    Holdings, Inc., effective as of March 19, 2003.10.25(1)

Third Amendment to 2001 Stock Option Plan of DealerTrack
    Holdings, Inc., effective as of January 30, 2004.10.26(6)

Fourth Amendment to 2001 Stock Option Plan of DealerTrack
    Holdings, Inc. effective as of February 10, 2006.10.27(10)

Second Amended and Restated 2005 Incentive Award Plan, effective
    as of June 3, 2008.10.28(8)

Amendment to Asset Purchase Agreement, dated October 18,
    2006, by and among Santa Acquisition Corporation, Automotive
    Lease Guide (alg), LLC, Automotive Lease Guide (alg) Canada,
    Inc., Douglas W. Aiken, John A. Blair and Raj Sundaram.10.29(5)

Form of Stock Option Agreement.10.30(5)

Form of Restricted Stock Agreement.10.31*

Form of Restricted Stock Unit Agreement.10.32(1)

Senior Executive Incentive Bonus Plan, effective as of
    May 26, 2005.10.33(9)

Stock Ownership and Retention Program, adopted May 26, 2005.10.34(1)

Employee Stock Purchase Plan, adopted May 26, 2005.10.35(1)

Directors Deferred Compensation Plan, effective as of
    June 30, 2005.10.36(11)

First Amendment to DealerTrack Holdings, Inc. Directors
    Deferred Compensation Plan effective as of January 1, 2007.10.37(1)

Employees Deferred Compensation Plan, effective as of
    June 30, 2005.10.38(11)

First Amendment to DealerTrack Holdings, Inc. Employees
    Deferred Compensation Plan effective as of January 1, 2007.10.39(1)

401 (k) Plan, effective as of January 1, 2001, as amended.10.40(2)

Lease Agreement, dated as of August 5, 2004, between iPark
    Lake Success, LLC and DealerTrack, Inc.10.41(4)

Lender Integration Support Agreement, dated as of
    September 1, 2005, between First American CMSI Inc. and
    DealerTrack, Inc.10.42(7)

Shares Purchase Agreement, made as of January 16, 2007,
    among certain shareholders of Curomax Corporation and all of the
    shareholders of 2044904 Ontario Inc., 2044903 Ontario Inc. and
    2044905 Ontario Inc. and 6680968 Canada Inc.14.1(6)

Code of Business Conduct and Ethics.21.1*

List of Subsidiaries.23.1*

Consent of PricewaterhouseCoopers LLP.31.1*

Certification of Mark F. ONeil pursuant to
    Rule 13a-14(a)
    and 15d-14(a), as adopted pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.31.2*

Certification of Robert J. Cox III pursuant to
    Rule 13a-14(a)
    and 15d-14(a), as adopted pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.32.1*

Certification of Mark F. ONeil and Robert J. Cox III
    pursuant 18 U.S.C. Section 1350, as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.(1)
    
    Incorporated by reference to our Registration Statement on
    Form S-1
    (File
    No. 333-126944)
    filed July 28, 2005.(2)
    
    Incorporated by reference to Amendment No. 1 to our
    Registration Statement on
    Form S-1
    (File No. 333-126944)
    filed September 22, 2005.(3)
    
    Incorporated by reference to Amendment No. 2 to our
    Registration Statement on
    Form S-1
    (File No. 333-126944)
    filed October 12, 2005.




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##### Table of Contents



(4)
    
    Incorporated by reference to Amendment No. 3 to our
    Registration Statement on
    Form S-1
    (File No. 333-126944)
    filed October 24, 2005.(5)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    filed May 12, 2006.(6)
    
    Incorporated by reference to our Annual Report on
    Form 10-K
    filed March 30, 2006.(7)
    
    Incorporated by reference to our Current Report on
    Form 8-K
    dated January 16, 2007 filed January 18, 2007.(8)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    filed November 14, 2006.(9)
    
    Incorporated by reference to our Annual Report on
    Form 10-K
    filed March 16, 2007.(10)
    
    Incorporated by reference to Exhibit I to our Definitive
    Proxy Statement, filed on April 29, 2008.(11)
    
    Incorporated by reference to our Quarterly Report on
    Form 10-Q
    filed August 9, 2007 .