May 8, 2017

“The wholesale market held steady last week with stable values across most segments. Auction consignments were reported to be low for this time of the year.”

Anil Goyal, Senior Vice President of Automotive Valuation and Analytics

Model Years: 2008-2014, Volume Weighted Wholesale Average Values, Weekly Change from 4/28/17 to 5/5/17

Values Relatively Stable Last Week x Volume-weighted, overall car segment values decreased by 0.27% last week. In comparison, the

market values had increased on average by 0.14% per week in the previous four weeks.

x In car segments, Compact Car and Mid-Size Car segments performed the worst, dropping by 0.89% and 0.44%, respectively.

x Volume-weighted, overall truck segment (including pickups, SUVs and vans) values increased by 0.10% last week, better than the average increase of 0.02% per week in the previous four weeks.

x In truck segments, Compact Vans improved the most in value by 0.89% while other segments were quite steady.

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2

May 8, 2017

Sentiment from the Auction Lanes

Our editors and personnel attend about 60 auctions every week across the country to provide key insights:

“A good sale but consignment is still down. Nice, used vehicles are scarce so the prices should remain strong on the clean and extra clean units”. Tim in IN

“Low number of consigned vehicles and a lot of high mileage or damaged vehicles. Even so prices were steady or even up slightly”. Jim in WA

“Two good auctions here this week. Cars and trucks were bringing all the money”. Frank in AZ

“Late model year trucks with average or fewer miles are doing very well. The money on those units remains strong”. Mark in MI

“Consignment was down a bit - rental returns, along with repo’s and lease returns dominated the auction. There were more bidder badges issued than normal”. Bob in PA

Black Book Used Vehicle Retention Index

Black Book’s Used Vehicle Retention Index listed at 113.1 for the month of April, a slight uptick from March's value of 113.0. April saw stronger seasonality trends than what we had been seeing during the last few spring seasons. Click here to obtain a copy of the latest index data.

Vehicle Highlight 2017 BMW M6 is available in coupe, convertible, and Gran Coupe 4 door bodystyles. Base MSRP starts at $118,690 including factory destination charge. The BMW M6 has a 4.4L V8 with 560hp and 500 lb-ft of torque. Close competitors include the Audi RS 7, Porsche Panamera, Jaguar F-Type, and Mercedes AMG SL.

This week’s report includes our Monthly Edition Supplement on Specialty Markets.

3

May 8, 2017

Late Spring Auctions Show Continued Strength “There are no lulls in the collectible vehicle auction calendar anymore, and the late Spring auctions, while not as large as Scottsdale or Amelia Island, were well attended by sellers, buyers, and spectators. Bidding was brisk, with sales approaching the $70,000,000 mark and impressive sell through rates.”

Eric Lawrence, Director of Specialty Markets

x Auctions America’s Fort Lauderdale sale celebrated its fifteenth anniversary with $17,300,000 in sales and an impressive 76% (304 of 400) sales conversion rate. One of the highlights of the three day sale was 26 historically significant vehicles from the JLG Autocrib Porsche Collection, which were sold at “no reserve”.

x Not too far away, Barrett-Jackson celebrated the fifteenth anniversary of their Palm Beach auction with $20,500,000 in sales. As their auctions are essentially all “no reserve”, the sell through rate was roughly 100% on the offering of 500 vehicles. $515,000 was raised for charities from the sale of five donated vehicles.

x Mecum had a couple of good sales, reaching $7,300,000 in Kansas City and $21,700,000 in Houston. A total of 309 vehicles were declared sold during the two days in Kansas City, while 793 traded hands over three days in Houston, with 70% finding new homes (including lots from the LaQuay and Emalee Burton collections.)

Notable Recent Auction Sales Include:

1955 Studebaker Speedster $48,400 (Auctions America) 1963 Mercedes 300SL Roadster $1,200,000 (Auctions America) 1990 Lamborghini LM002 $300,000 (Auctions America) 1961 VW 23 Window Microbus $291,500 (Barrett-Jackson) 1969 Ford Mustang Boss 429 $291,500 (Barrett-Jackson) 2010 Ferrari 599 GTB $200,000 (Barrett-Jackson) 2005 Ford GT Coupe $300,000 (Mecum KC) 1973 DeTomaso Pantera Coupe $85,000 (Mecum KC) 1970 Plymouth Hemi Cuda Coupe $180,000 (Mecum Houston) 1969 Shelby GT500 Conv $250,000 (Mecum Houston)

Photo courtesy of Auctions America

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Muscle Cars Pony Cars American Classics Sports Cars Exotic Cars Classic Trucks

Percent Change from May 2016 to May 2017

SPECIALTY MARKETS: COLLECTIBLE CARS

4

May 8, 2017

RV Values at Auction Continue to Sizzle “Warmer weather is here and the Spring market is upon us. Towable sales at auction set another record last month, and Motor Home values hit their second highest number since the summer of 2010. The overall economy is strong, consumer confidence is up, and consumers are buying RVs in record numbers. Many of these new RV sales result in a used unit coming to the market, and dealers are stocking up to handle the customers who don’t want to buy new.”

Eric Lawrence, Director of Specialty Markets

For Motor Homes (including Class A, B, and C)

x Average selling price was $44,379 up $5,534 (14.2%) from previous month x One year ago, the average selling price was $35,168 x Auction volume was up 13% from the previous month

For Towables (including Travel Trailers and Fifth Wheels)

x Average selling price was $13,397, up $162 (1.2%) from previous month x One year ago, the average selling price was $11,965 x Auction volume was up 19% from previous month

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Travel Trailer and Fifth Wheel Value Trends

SPECIALTY MARKETS: RECREATIONAL VEHICLES

5

May 8, 2017

Powersports Market Continues to Surge “The Powersports market continues to surge ahead this month with across the board increases in value as the Summer selling season is in full swing.”

Scott Yarbrough, Motorcycle & Powersports Editor

x The largest gainers this month are the Cruisers, both the domestic V-Twins and the metrics are up substantially. The metric models are up roughly 3 percent, while the domestics are up over 4 percent, leading to a total segment average increase of 4.3 percent. Within the cruiser segment, the smaller displacement models (those less than 1,000 cc) are up a bit more than the larger units. This is a good sign for the future as these models are more in demand by first time and entry level buyers who should be back in later years for bigger displacement upgrades.

x The other road going bike segments are up by much smaller amounts, with the Street and Dual

Sport bikes only up a little, and the Scooters actually dropping a bit. If you remember back to last month though, this segment was up over six percent, so its two-month average is in line with the rest of the market.

x Both the ATVs and Utility Vehicles are strong performing segments as well this month, with the ATVs outperforming the Utility Vehicles by a 2 to 1 margin. This continues a trend we have been seeing for a little while now of the Utility Vehicle market maturing and performing more in-line with the rest of the industry.

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5.0%Motorcycle & Powersports Percent Changes April to May 2017

SPECIALTY MARKETS: POWERSPORTS

6

May 8, 2017

Late Model Over the Road and Regional Tractors Continue to Drop Hard!

“Following a month with not very much depreciation, long and short haul road tractors declined much more in April than in March.” Charles Cathey, Editor – Heavy Duty Truck Data

Apparently, much of the needs for over the road and regional replacement equipment was satisfied in March. We mentioned that possibility last month as a major reason for March’s relatively low drop from February. Large number of late model vehicles in the segment is a major contributing factor leading to this result. Late model used construction/vocational trucks, new and old, held their value well while over the road and regional tractors depreciated 0.3% and 0.4%, respectively more in April than they did in March.

DATE Construction/Vocational

Over the Road Trucks & Tractors Regional Tractors MODEL

YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change 05/01/17 82,265 -426 -0.5% 66,484 -512 -0.8% 56,471 -499 -0.9% 2014-2015 04/01/17 83,019 -344 -0.4% 67,045 -318 -0.5% 56,970 -303 -0.5% 2014-2015

x 2014-2015 HD Construction/Vocational segment dropped an average of $426 (0.5%) in April compared to the average decline of $344 (0.4%) in March .

x 2014-2015 HD Over the Road Tractor segment dropped an average of $512 (0.8%) in April compared to the average drop of $318 (0.5%) in March .

x 2014-2015 HD Regional Tractor segment dropped an average of $499 (0.9%) in April compared to the average depreciation of $303 (0.5%) in March .

DATE Construction/Vocational

Over the Road Trucks & Tractors Regional Tractors MODEL

YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change 05/01/17 40,957 -280 -0.7% 30,640 -542 -1.7% 22,129 -430 -1.9% 2006-2013 04/01/17 41,195 -232 -0.6% 31,078 -164 -0.5% 22,559 -162 -0.7% 2006-2013

x 2006-2013 HD Construction/Vocational segment dropped an average of $280 (0.7%) in April compared to the $232 (0.6%) in March .

x 2006-2013 HD Over the Road Tractor segment dropped an average of $542 (1.7%) in April compared to $164 (0.5%) average depreciation in March .

x 2006-2013 HD Regional Tractor segment dropped an average of $430 (1.9%) in April compared to the average drop of $162 (0.7%) in March .

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Construction/Vocational Over the Road Trucks & Tractors Regional Tractors

SPECIALTY MARKETS: HEAVY DUTY

7

May 8, 2017

Prices Fall Slightly in April compared to March

“Medium Duty truck prices marginally dropped in April compared to March”

Josh Giles, Senior Truck Editor

Medium Duty trucks depreciated slightly more in April than they did in March based on our reports. Although prices fell marginally in April compared to March the overall market is performing quite well. Ample supply of box trucks is helping keep some downward pressure on the overall market. Late Model Medium Duty trucks dropped an average of $393 (0.9%) in April compared to the $277 (0.7%) drop in March. Depreciation also increased slightly month over month on the early model Medium Duty units. This past month the early model Medium Duty trucks dropped an average of $186 (1.0%) compared to the $129 (0.7%) we saw in March. With the housing market and GDP expected to slightly increase in 2017 we expect retail sales to slightly increase as well. Normally as these factors increase so does retail chassis sales for this market. It’s going to be interesting to watch this market over the next few years.

DATE Medium Duty MODEL

YEARS

DATE Medium Duty MODEL

YEARS Value $ Change % Change Value $ Change % Change 05/01/17 41,196 -393 -0.9% 2014-2015 05/01/17 17,970 -186 -1.0% 2006-2013 04/01/17 41,589 -277 -0.7% 2014-2015 04/01/17 18,156 -129 -0.7% 2006-2013 Fuel prices have been relatively stable so far this year. We are currently paying an average of $2.60 per gallon for diesel. This is a $0.04 increase from last month, and a $0.43 increase from this time last year. As a national average we haven’t paid this much for diesel since mid-April of 2015. At least we aren’t paying $4.76 like we were back in July of 2008. With some reports indicating that we currently have a fuel surplus we should benefit from these low fuel prices for the near future.

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+$0.5004/17/1704/10/1704/03/1703/27/1703/20/1703/13/17

Diesel Price Changes

Price Chg/Week Price Chg/Year

SPECIALTY MARKETS: MEDIUM DUTY