SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

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EXHIBIT 10.18

SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

This Senior Executive Employment Agreement (the "Agreement") is

entered into as of this 26th day of May, 2005 (the "Effective Date") by and

between Eric D. Jacobs ("Executive") and DealerTrack Holdings, Inc., a Delaware

corporation ("Employer") with principal offices at 1111 Marcus Avenue, Suite

M04, Lake Success, NY 11042.

Section 1. Term

Employer shall continue to employ Executive and Executive agrees to

continue such employment, upon the terms and conditions hereinafter set forth,

from the Effective Date through and including June 30, 2007 (the "Initial

Term"). This Agreement shall renew automatically for successive one year periods

(each, a "Renewal Term") unless one party gives notice to the other party, in

writing, at least sixty (60) days prior to the expiration of this Agreement (or

any renewal) of its desire to terminate the Agreement. The term of this

Agreement, including the Initial Term and any Renewal Term, shall be referred to

herein as the "Term".

Section 2. Executive's Duties

(a) Executive shall be Senior Vice President, General Counsel and

Secretary and shall report directly to Employer's Chief Executive Officer or his

designee. Executive shall faithfully and diligently perform his duties at the

direction of Employer's Chief Executive Officer, or his designee, to the best of

Executive's ability. Executive shall (i) devote his best efforts, skill, and

ability and full business time and attention to the performance of the services

customarily incident to such office, subject to vacations and sick leave as

provided herein and in accordance with Employer policy, (ii) carry out his

duties in a competent and professional manner; and (iii) generally promote the

interests of Employer. Subject to applicable law, Executive shall not knowingly

participate in any activity that is detrimental to the interests of Employer or

any of its affiliates, including, without limitation, any public criticism or

disparagement of any type by Executive, through the media or otherwise, of

Employer or any of its affiliates or employees, except in connection with the

exercise of Executive's rights against Employer or any of its affiliates.

(b) Executive agrees to abide by all policies applicable to senior

executive officers of Employer promulgated from time to time by Employer which

policies are enforced uniformly and applicable to all similar executives of

Employer.

(c) Except for such business travel as may be incident to his duties

hereunder, Executive shall perform his duties at Employer's offices at the

address set forth in the preamble to this Agreement or at such other location as

may be approved by Employer.

Section 3. Compensation for Executive's Services

In consideration of the duties and services to be performed by

Executive pursuant to Sections 1 and 2 hereof, Executive shall receive:

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(a) Salary. Executive shall earn salary (the "Salary") at the annual

rate of Two Hundred Fifty Thousand Dollars ($250,000.00) (the "Minimum Salary"),

less all applicable federal, state, and local tax withholdings. Such Salary

shall be earned and shall be payable in periodic installments in accordance with

Employer's payroll practices. During the Term, the Board of Directors of

Employer (the "Parent Board") or the Compensation Committee of the Parent Board

(the "Compensation Committee") will review the Salary annually and may in its

discretion increase the Salary, but may not reduce it during the Term unless

Employer institutes salary reductions across the board; provided, however, that

in no event shall the Salary be reduced below the Minimum Salary without

Executive's written consent.

(b) Bonus. For each fiscal year of Employer (each, a "Fiscal Year"),

Executive shall be entitled to receive a cash performance bonus (a "Bonus")

which shall be based on the achievement of certain performance benchmarks by

Employer during such Fiscal Year which shall be determined by the Parent Board.

The Parent Board shall review the target Bonus on an annual basis and, in its

sole discretion, may increase such target Bonus for any Fiscal Year. The target

Bonus shall not be decreased except in connection with company-wide bonus

reductions. The target Bonus for any Fiscal Year shall be at least Forty-Five

percent (45%) of the Salary for such Fiscal Year. The Bonus for each Fiscal Year

shall be paid, if at all, to Executive on a schedule consistent with Employer's

bonus payments to its other similarly situated senior executive officers by no

later than two and one half (2 1/2) months following the end of such Fiscal

Year. Executive understands and agrees that the Bonus is established in part as

an inducement for Executive to remain employed by Employer and except as

provided in Section 5(c) of this Agreement, or in the Employer's sole

discretion, in the event that Executive's employment is terminated prior to the

end of any Fiscal Year during the Term, then Executive shall not receive payment

of any Bonus for such year.

(c) Equity. In connection with Executive's employment, Executive has

been and may continue to be granted stock options ("Stock Options") to purchase

equity securities of Employer pursuant to the terms of DealerTrack Holdings,

Inc. 2001 Stock Option Plan, effective as of August 10, 2001, as amended ("Stock

Option Plan") or may be granted Stock Options or other equity based awards

pursuant to the terms of the DealerTrack Holdings, Inc. 2005 Incentive Award

Plan, effective as of May 26, 2005, as amended (the "2005 Incentive Award

Plan"), or any other successor equity incentive plans (collectively, the "Stock

Incentive Plans"). Except as otherwise provided herein, the terms of the Stock

Options shall be governed by the Stock Incentive Plans. Executive shall be

credited with twenty-four (24) months accelerated vesting of his Stock Options

upon termination of Executive's employment by: (1) Employer without Cause (as

defined below); or (2) Executive for Good Reason (as defined below). Executive

shall be credited with thirty-six (36) months accelerated vesting of his Stock

Options upon a Change of Control (defined below). Executive shall be credited

with full acceleration and vesting of his Stock Options upon the earlier of: (1)

the elimination of Executive's position or a termination of Executive's

employment, in either event, within twelve (12) months after a Change of

Control; (2) a material negative change in Executive's compensation or

responsibilities within twelve (12) months after a Change of Control; or (3) the

requirement that Executive be based at a location which is more than fifty (50)

miles from Employer's offices at the address set forth in the preamble to this

Agreement within twelve (12) months after a Change of Control. Anything in the

Stock Incentive Plans to the contrary notwithstanding, if Executive's employment

is terminated by Executive with Good Reason or by Employer without Cause, or

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under circumstances described above which would result in certain accelerated

vesting of any unvested Stock Options held by Executive, the unexercised portion

of any Stock Options held by Executive will not terminate until the twelve (12)

month anniversary of the date of termination of Executive's employment. In the

event Employer elects to grant equity based awards other than Options, such

grants shall, where appropriate, be subject to equivalent acceleration

provisions as set forth in this Section 3(c). For purposes hereof, a "Change of

Control" shall mean and includes each of the following:

(i) A transaction or series of transactions (other than an offering

of shares of Employer to the general public through a registration

statement filed with the Securities and Exchange Commission) whereby any

"person" or related "group" of "persons" (as such terms are used in

Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as

amended) (other than the Employer, any of its subsidiaries, an employee

benefit plan maintained by the Employer or any of its subsidiaries or a

"person" that, prior to such transaction, directly or indirectly controls,

is controlled by, or is under common control with, the Employer) directly

or indirectly acquires beneficial ownership (within the meaning of Rule

13d-3 under the Securities Exchange Act of 1934, as amended) of securities

of the Employer possessing more than 50% of the total combined voting

power of the Employer's securities outstanding immediately after such

acquisition; or

(ii) During any period of two consecutive years, individuals who, at

the beginning of such period, constitute the Parent Board together with

any new director(s) (other than a director designated by a person who

shall have entered into an agreement with the Company to effect a

transaction described in Section 3(c)(i) or Section 3(c)(iii)) whose

election by the Parent Board or nomination for election by the Employer's

stockholders was approved by a vote of at least two-thirds of the

directors then still in office who either were directors at the beginning

of the two-year period or whose election or nomination for election was

previously so approved, cease for any reason to constitute a majority

thereof; or

(iii) The consummation by the Employer (whether directly involving

the Employer or indirectly involving the Employer through one or more

intermediaries) of (x) a merger, consolidation, reorganization, or

business combination or (y) a sale or other disposition of all or

substantially all of the Employer's assets in any single transaction or

series of related transactions or (z) the acquisition of assets or stock

of another entity, in each case other than a transaction:

(A) Which results in the Employer's voting securities

outstanding immediately before the transaction continuing to

represent (either by remaining outstanding or by being converted

into voting securities of the Employer or the person that, as a

result of the transaction, controls, directly or indirectly, the

Employer or owns, directly or indirectly, all or substantially all

of the Employer's assets or otherwise succeeds to the business of

the Employer (the Employer or such person, the "Successor Entity"))

directly or indirectly, at least a majority of the combined voting

power of the Successor Entity's outstanding voting securities

immediately after the transaction, and

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(B) After which no person or group beneficially owns voting

securities representing 50% or more of the combined voting power of

the Successor Entity; provided, however, that no person or group

shall be treated for purposes of this Section 3(c)(iii) as

beneficially owning 50% or more of combined voting power of the

Successor Entity solely as a result of the voting power held in the

Employer prior to the consummation of the transaction; or

(iv) The Employer's stockholders approve a liquidation or

dissolution of the Employer.

The Parent Board or its designee shall have full and final authority, which

shall be exercised in its discretion, to determine conclusively whether a Change

of Control of the Employer has occurred, and the date of the occurrence of such

Change of Control and any incidental matters relating thereto.

(d) Benefits. Employer shall provide Executive with the right to

participate in and receive benefits from all life, accident, disability, medical

and pension plans, and all similar benefits as are from time to time in effect

and are generally made available to similar situated senior executive officers

of Employer. The amount and extent of benefits to which Executive is entitled

shall be governed by the specific benefit plan, as it may be amended from time

to time.

(e) Expenses. Employer shall promptly reimburse Executive for

reasonable expenses for cellular telephone usage, entertainment, travel, meals,

lodging and similar items incurred in the conduct of Employer's business. Such

expenses shall be reimbursed in accordance with Employer's expense reimbursement

policies and guidelines.

(f) Vacation; Sick Leave. During the Term, Executive shall be

entitled to four weeks (4) weeks vacation per year, paid holidays, sick leave,

and similar benefits, to be earned and used in accordance with Employer's policy

and procedure for other similarly situated senior executive officers.

(g) Modification. Employer reserves the right to modify, suspend or

discontinue any and all of the above plans, practices, policies and programs

referenced in Sections 3(d) and (e) at any time in its discretion without

recourse by Executive so long as such action is taken generally with respect to

other similarly situated senior executive officers. Any such modification,

suspension or discontinuance of the plans, practices and policies referenced in

Section 3(e) will not apply to otherwise reimbursable expenses incurred by

Executive prior to any such modification, suspension or discontinuance.

Section 4. Termination of Employment

(a) Resignation. Executive may voluntarily terminate his employment

with Employer, at any time, with or without Good Reason, upon written notice to

Employer.

(b) Termination. Employer may terminate Executive's employment at

any time, with or without Cause, upon written notice to Executive.

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(c) Death or Disability. Executive's employment shall terminate

immediately upon Executive's death. In the event Employer, in good faith,

determines that Executive is unable to perform the functions of his position due

to a Disability (as defined below), it may notify Executive in writing of its

intention to terminate Executive's employment and Executive's employment with

Employer shall terminate effective on the thirtieth (30th) day after receipt of

such notice by Executive. For the purposes of this Agreement, "Disability" shall

mean a physical or mental impairment that substantially limits a major life

activity of Executive and renders Executive unable to perform the essential

functions of his position even with reasonable accommodation (that does not

impose an undue hardship on Employer), and which has lasted at least (i) sixty

(60) consecutive days, (ii) the balance of Executive's entitlement to leave, if

any, under the Family and Medical Leave Act, or other similar statute or (iii)

the balance of any election period under the Employer's long term disability

program (without regard to whether Executive is awarded benefits under such

program), whichever is longer.

(d) Cause. Employer may immediately terminate Executive's employment

for "Cause" by giving written notice to Executive. For purposes of this

Agreement, "Cause" shall mean:

(1) Executive's commission of an act of fraud or

embezzlement upon Employer or any of its affiliates; or

(2) Executive's commission of any willful act intended to

injure the reputation, business, or any business

relationship of Employer or any of its affiliates; or

(3) Executive is found by a court of competent jurisdiction

to have committed a felony; or

(4) the refusal or failure of Executive to perform

Executive's duties with Employer in a competent and

professional manner that is not cured by Executive

within ten (10) business days after a written demand

therefor is delivered to Executive by the Parent Board

which specifically identifies the manner in which the

Parent Board believes that Executive has not

substantially performed Executive's duties; provided,

further, however, that if the Parent Board, in good

faith, determines that the refusal or failure by

Executive is egregious in nature or is not susceptible

of cure, then no cure period shall be required

hereunder; or

(5) the refusal or failure of Executive to comply with any

of his material obligations under this Agreement

(including any exhibit hereto) that is not cured by

Executive within ten (10) business days after a written

demand therefor is delivered to Executive by the Parent

Board which specifically identifies the manner in which

the Parent Board believes Executive has materially

breached this Agreement; provided, further, however,

that if the Parent Board, in good faith, determines that

the refusal or failure by Executive is

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egregious in nature or is not susceptible of cure, then

no cure period shall be required hereunder.

(e) Good Reason. Executive may terminate his employment for "Good

Reason," by delivering written notice of such termination ("Employer Default

Notice") to Employer within sixty (60) days of the occurrence of any of the

following events, each of which shall constitute Good Reason: (i) Employer's

material breach of any provision of this Agreement, the Stock Incentive Plans or

any agreements thereunder, which has not been cured within the allotted time;

(ii) a material reduction of Executive's then current title, status, authority,

responsibility or duties or the assignment to Executive of any duties materially

inconsistent with Executive's then current position; (iii) any material

reduction in Executive's salary or benefits; (iv) the failure of any successor

entity to assume the terms of this Agreement upon any Change of Control; (v) the

relocation of Executive to a facility or location more than fifty (50) miles

from Employer's principal offices at the address set forth in the preamble to

this Agreement; or (vi) the failure of Employer to renew this Agreement upon the

expiration of the Initial Term or any Renewal Term. The Employer Default Notice

shall specify the reason for Executive's belief that an event constituting Good

Reason has occurred. Notwithstanding the foregoing, any material breach of this

Agreement by Employer, or other event constituting Good Reason, shall not

constitute Good Reason if any such breach or other event is cured or corrected

by Employer within thirty (30) days following delivery to Employer of the

Employer Default Notice.

(f) Continuing Obligations. Executive acknowledges and agrees that

any termination under this Section 4 is not intended, and shall not be deemed or

construed, to affect in any way any of Executive's covenants and obligations

contained in Sections 6, 7, and 8 hereof, which shall continue in full force and

effect beyond such termination for any reason.

Section 5. Termination Obligations

(a) Resignation. If Executive's employment is terminated voluntarily

by Executive without Good Reason, Executive's employment shall terminate without

further obligations to Executive other than for payment of the sum of any unpaid

Salary determined by the Parent Board and reimbursable expenses and vacation

accrued and owing to Executive prior to the termination. The sum