NADA Used Car Guide Industry Update. December 2013

Transcription

1 NADA Used Car Guide Industry Update December 2013 Used Vehicle Depreciation Improves Considerably in November Used prices fall by 1.5%; NADA s used vehicle price index jumps 1.8 points to December Official Used Car Guide Movement Average trade-in values reduced by 3.1% Used Vehicle Prices Expected to Rise by 2% through Q Prices should mirror Q levels New Vehicle Sales Rate Surges to 16.3M Sales hit highest annualized rate since February 2007

2 TABLE OF CONTENTS New & Used Market Trends... 2 Economic Data NADAguides.com Search Trends NADA Official Used Car Guide Value Trends At NADA Used Car Guide NEW & USED MARKET TRENDS NADA s used vehicle price index hits a new high After diving by 3.5% in October, the rate of used vehicle depreciation slowed substantially in November as wholesale prices for units up to eight years in age fell by 1.5% on a prior-month basis. The month s rather strong showing pushed NADA s seasonally adjusted used vehicle price index to in November, up 1.8 points from October s figure of This is the highest point reached on NADA s index, surpassing the previous high of set back in December While the majority of November s result can be ascribed to persistently favorable market conditions, a portion of the month s strength can likely be traced back to the end of the federal government shutdown in October. Considering the rebound in consumer confidence that occurred since the end of the political impasse Gallup's Economic Confidence Index currently stands at -20, up from the -42 figure recorded in mid-october during the shutdown (the Thompson Reuters/University of Michigan Consumer Sentiment Index also rebounded last month) it s possible that a pop in pent-up demand accumulated as a result of the federal closure lent additional support to used prices in November. Wholesale used vehicle prices for units up to eight years in age fell by 1.5% in November, a two point improvement over October s 3.5% tumble. At the segment level, mid-size van prices firmed up the most in November with depreciation improving to 1.6%, up by more than three percentage points from October s steep loss of 4.7%. The stabilization in mid-van prices came despite 2013 model year volume increasing by 3 or 982 units during the month. (Continued on page 3) NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 2

3 Percent Change Percent Change Jan-95 Sep-95 May-96 Jan-97 Sep-97 May-98 Jan-99 Sep-99 May-00 Jan-01 Sep-01 May-02 Jan-03 Sep-03 May-04 Jan-05 Sep-05 May-06 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11 May-12 Jan-13 Sep-13 January 2010 = 100 Guidelines December 2013 [ NEW & USED MARKET TRENDS continued ] Although depreciation for other segments didn t contract to the degree observed on mid-size vans, improvements were impressive nonetheless. Compact and mid-size car prices fell by an average of NADA Used Vehicle Price Index Vehicles up to eight years in age. Seasonally adjusted November 2013: Index rises to 125.6, up from October's figure of % - more than two points less than October s tumble. Compact and mid-size utility prices also fell by a combined average of 1.4%, while the large pickup and SUV segments continued to exhibit above average strength with prices dipping by just 0.8% 80 apiece. 70 Luxury car depreciation moderated by nearly two Source: NADA points in November, but the segment s 1.9% drop was still roughly a half-point more than the overall ly AuctionNet Price Change - October v. November, 2013 Vehicles up to eight years in age. market average. Luxury utility prices suffered a more 0.2% severe 2.5% fall that basically matched the 2.4% drop -0.3% recorded in each of the prior two months. -0.8% -0.8% -0.8% -1.3% November s results did little to change annual -1.8% -1.5% -1.4% -1.4% -1.5% -1.6% -1.5% differences in prices. Matching October, overall -2.3% -1.9% market prices remained up by 0.5% relative to the -2.8% -2.5% same period last year, while compact utility, large -3.3% pickup, large SUV, and mid-size vans all saw their price advantage over 2012 tick up by a tenth of a -3.8% Source: NADA Source: NADA Compact Car Compact Utility Large Pickup Large SUV Luxury Car Luxury Utility Mid-Size Car Mid-Size Utility Segment Mid-Size Van Market Average point. The annual difference in price across remaining segments matched what was recorded in October. Annual AuctionNet Price Change - Year-to-Date, 2012 v Through November. Vehicles up to eight years in age. As far as auction volume was concerned, excluding the shortened Thanksgiving holiday week, the number of units up to eight model years in age grew by 3.8% relative to the last three weeks of October, with growth being led by a combined 1 rise in 2011 (off-lease) and 2013 (rental fleet) model year supply. The growth in 13MY volume was largely the product of the rise in mid-size van supply mentioned earlier, (Continued on page 4) Source: Source: NADA NADA -0.5% Compact Car -1.1% Compact Utility % -1.5% Large Pickup Large SUV Luxury Car Luxury Utility Segment -0.8% -0.7% Mid-Size Car 2.1% Mid-Size Utility 3.6% Mid-Size Van 0.5% Market Average NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 3

4 [ NEW & USED MARKET TRENDS continued ] along with increases of 19% to 22% in the number of midsize utility, large pickup, and mid-size cars entering the lanes. Notable supply growth for the 11MY was more dispersed across segments, with luxury utilities (+28%) and large cars (+27%) leading the way. December used vehicle price forecast In general, December s rate of depreciation tends to be similar to November s and this year should be no different as prices are expected to slide by 1.5%. This means that barring an unexpectedly severe drop, used vehicle prices will grow for the fifth year in a row by closing out the year slightly higher than 2012 s record high average of $15,042. Looking ahead to 2014, however, it s more likely that this long-running trend will come to an end than it is that prices will rise for a sixth straight year. Although certain market fundamentals are expected to remain supportive of auto sales (higher) home prices, (lower) unemployment, (moderating) gas prices, and (advantageous) credit conditions a continued rise in late -model used supply will increasingly apply downward pressure to used prices. In addition, manufacturer incentive spending has progressively grown throughout the course of the year and odds are Used prices are expected to fall by 1.5% in December before growing by approximately 2. through the through the first quarter of that slower new sales growth will see spending continue to trend up moderately next year; this will also negatively affect used prices. As a result, NADA believes that used vehicle prices will begin to drift lower next year, falling somewhere in the neighborhood of 2% on an annual basis by the end of As far as the first quarter of 2014 is concerned, it appears as though a repeat of October s federal government closure will be averted due to a rare showing of bipartisan collaboration that stands a good chance of setting a federal budget prior to January s deadline. With a budget deal in hand, lawmakers would be given breathing room to address raising the federal debt ceiling again, which is a threshold expected to be reached sometime in early February. Assuming these issues are proactively dealt with before depressing consumer sentiment, used vehicle prices should experience a familiar seasonal bounce in the first quarter. From a depreciation perspective (i.e., not seasonally adjusted), NADA expects that used prices in January will be essentially equal to December levels AuctionNet Auction Volume Trends The change in auction volume between the first 3 weeks of November and the last 3 weeks of October Volume by Model Year Group Period* MY MY MY MY MY Prior Period 49,083 33,893 58,065 64, ,770 Current Period 50,359 35,104 60,565 67, ,688 Difference (%) 2.6% 3.6% 4.3% 4.5% 3.8% Source: NADA Current period covers the weeks of 11/4-11/18/13. before growing by approximately 2% through March. On a seasonally adjusted basis, this would see prices a (Continued on page 5) NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 4

5 [ NEW & USED MARKET TRENDS continued ] small three-tenths of a point higher than they were in the first quarter of 2013, but nearly 1% lower than they were in the fourth quarter. December Official Used Car Guide value movement Trade-in values in December s edition of the Official Used Car Guide were reduced by an average of 3.1%. Reflecting the ongoing rise in supply, later model year values ( ) were adjusted down by an average of 3.4%, while older model year values were reduced by a smaller 2.8%. Mirroring market trends, trucks continued to outperform cars in December s edition as the group s 2.6% reduction in trade-in values was decidedly better than 3.5% drop applied to car values. Across car segments, the steepest reductions were assigned to the luxury large, luxury mid-size, and intermediate subcompact segments, where values for each were dropped by averages exceeding 4.. Values for the two most populous car segments intermediate compact and mid-size were reduced by 3.2% and 3.4%, respectively. As for trucks, mid-size utility values were cut by an average of 3.; this was the most of any other truck segment and also the fourth month in a row in which the segment carried this distinction. Values for the majority of remaining truck segments were reduced within a range of 2.2% to 2.7%, excluding pickups and luxury compact utilities where trade-in values were dropped by an average of 1.9% or less. New vehicle sales up 8.6%, SAAR climbs to 16.31M units November was another solid month for new vehicle sales, which totaled over 1.2 million units for an 8.6% lift over last year. Maintaining last month s pace, total deliveries for CY2013 remain up 8.3% with 14.2 million units. The seasonally adjusted annual rate (SAAR) rose to million units, up 6.9% over last November s million. After falling to the second-lowest level of the year last month, the SAAR jumped to a high of million, up 5.5% over last November and the highest level recorded since the beginning of November s seasonally adjusted annual rate of 16.3M was the highest new vehicle sales rate recorded since February (Continued on page 6) NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 5

6 New Vehicle SAAR (millions) Sales Volume (millions) Guidelines December 2013 [ NEW & USED MARKET TRENDS continued ] U.S. brands post biggest gains American automakers continue to flex their muscle, having sold nearly 540,000 vehicles in November, up 11.7%. For the year, the Big Three have pushed 6.41 million units and sales are up 9.8%. Chrysler Group LLC posted the greatest improvement among U.S. brands, 15.8%, by selling over 141,000 units. With the exception of Fiat, down 15%, Chrysler Group brands performed well and were led by Jeep and Ram, which were up 3 and 24%, respectively. s of delays may have marred the Jeep Cherokee s arrival, but the vehicle is now finally rolling off dealer lots and enjoyed sales of 10,169 units, a 142% increase over its Liberty New Vehicle Sales New Vehicles Sales YoY Change 2 15% 1 5% -5% -1 Percent Change predecessor. General Motors achieved another stellar month and its 212,000 deliveries, up 13.7%, represented the highest company tally in the industry. All four GM brands had similarly successful months with growth of 11.4% or more while GMC moved to the front of the pack, up 19.8%. Most notable amongst the GM family of vehicles were the GMC Acadia and Chevrolet Malibu, which combined to net 15,375 Source: Wardsauto.com New Vehicle SAAR SAAR YoY Change 14% 12% 1 8% 6% 4% Percent Change more sales than last year, good for respective gains 12 2% of 108.4% and 40.9%. 11 The Blue Oval had another positive month, with over 185,000 deliveries, but the 6.6% gain over last year was relatively modest by Ford Motor Company s Source: Wardsauto.com standards after months of growth above that of the industry. Lincoln pulled its weight with a 17% improvement and 6,727 deliveries, but the Ford brand was only able to muster up a 6. lift after selling 178,473 units. Sedans played a big role in the (Continued on page 7) NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 6

7 [ NEW & USED MARKET TRENDS continued ] company s sales increase as the Lincoln MKZ and Ford Fusion posted respective gains of 113.8% and 51%. Asians lead imports, Europeans flat Importer sales were up 6.3% with over 698,000 vehicles sold, but the group continues to lag behind domestics and again finished below the overall industry s growth. Unlike last month, Japanese brands were unable to keep pace with the industry, yet nonetheless had a respectable increase of 8. with almost 465,000 sales. The Japanese Big Three achieved over 401,000 deliveries for a 7.1% improvement, but were limited by Honda s poor month as Toyota and Nissan combined for an increase of 10.3%. As has been the case for months, Subaru remains on fire with 36,621 deliveries, up 29.8%, thanks for the Forester and XV Crosstrek, which together finished the month up 141.2%. For the year, Subaru has grown by 28.3%, which is a tremendous 20 percentage points above the industry s pace. Nissan North America enjoyed an impressive November with over 106,000 sales and a 10.7% gain, which bested its Toyota and Honda peers. The Nissan brand was up 10.8% thanks to strong sales of its Sentra and Maxima sedans, which were up 62.5% and 52.4%, respectively. Most surprisingly, however, was how successful Frontier sales were, totaling 6,003 units and 54.6% growth. Infiniti had a very solid month with over 13,000 deliveries and was up 10.5% after a great month from its Infiniti G/Q50 line, which combined for a 48.3% lift. Mainstream Brand Performance (Units Sold) Change From Nov-13 Oct-13 Nov-12 Ago Year Ago Buick 15,072 17,555 13,289-14% 13% Chevrolet 145, , ,867-7% 13% Chrysler 21,024 23,452 18, % Dodge 41,506 45,314 40,075-8% 4% Fiat 3,075 3,674 3,603-16% -15% Ford 178, , ,076-1% 6% GMC 35,727 38,841 29,832-8% 2 Honda 101, , ,334 2% -2% Hyundai 56,005 53,555 53,487 5% 5% Jeep 45,415 36,379 35,047 25% 3 Kia 45,411 39,754 41,055 14% 11% Mazda 20,754 19,738 21,691 5% -4% Mini 4,575 5,700 5, % Mitsubishi 6,071 4,752 3,574 28% 7 Nissan 93,376 81,866 84,300 14% 11% Ram 30,159 29,977 24,395 1% 24% Scion 4,968 4,940 5,606 1% -11% Smart % 36% Subaru 36,621 34,483 28,206 6% 3 Toyota 147, , ,370 4% 11% Volkswagen 30,727 28,129 36,728 9% -16% Source: Wards Auto Luxury Brand Performance (Units Sold) Change From Nov-13 Oct-13 Nov-12 Ago Year Ago Acura 14,559 14,296 12,246 2% 19% Audi 13,636 13,001 12,067 5% 13% BMW 31,752 27,574 31,213 15% 2% Cadillac 16,172 14,792 14,517 9% 11% Infiniti 13,152 9,152 11,897 44% 11% Jaguar 1,446 1, % 103% Land Rover 4,601 4,286 3,687 7% 25% Lexus 25,611 22,719 22,719 13% 13% Lincoln 6,727 7,131 5,732-6% 17% Mercedes-Benz 36,386 32,107 31,946 13% 14% Porsche 3,966 3,562 3,865 11% 3% Volvo 4,233 3,919 6,141 8% -31% Source: Wards Auto Toyota Motor Sales was up 10.1%, just behind Nissan, and tallied over 178,000 sales. Lexus had a strong month with well over 25,000 deliveries and was up 12.7% mostly due to its IS sedan and GX SUV models, which grew 99.8% and 69.8%, respectively. Toyota (Continued on page 8) NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 7

8 [ NEW & USED MARKET TRENDS continued ] pushed more than 147,000 units for a 10.6% gain on the heels of tremendous growth from its Avalon, up 346.4%, and RAV4, up 56.5%. Once again, the Scion brand struggled to keep up and sold 11.4% fewer vehicles than last year, falling short of 5,000 sales, and all of its models saw decreased sales. Similar to October, American Honda Motor Co. had a very disappointing month as its 116,507 deliveries were a 0.1% drop from last year and was well behind its Japanese Big Three counterparts. Once again, the company realized the secondworst growth of all Japanese automakers, but the blame rested solely on the shoulders of its mainstream brand. Honda sold fewer than 102,000 units and was down 2.3%, despite seven out of 10 models posting positive gains, primarily because Civic sales declined by 12.6%. On a positive note, Acura had a very good month after selling 14,559 units and growing by 18.9% thanks to the MDX and RDX combining for a 52.3% gain in addition to the new RLX flagship sedan s 674 deliveries. While Hyundai still lags behind much of the industry with growth of 4.7%, Kia Motors was certainly on the rebound in November, up 10.6%. The newest iteration of the funky Kia Soul has been well-received and jumped 77.3%, while the Sportage also had a very good month, up 106.8%. Kia made its intentions to move into luxury territory known at the L.A. Auto Show in November when it revealed its K900 flagship model, which is expected to go on sale in November marked the tenth month in row of incentive spending hikes; spending has grown by 3.1% year-to-date. the first quarter of In the meantime, the Cadenza holds the top spot in the company s product portfolio, adding 913 sales to push its total to 7,782 for the year. Sales of European makes were essentially flat, down 0.02%, but the results were mixed across the board. respectively. Swedish automaker Volvo sold 31.1% fewer vehicles, British company Jaguar Land Rover was up 37.4%, and Germany as a whole was nearly flat with a 0.2% lift. However, the German brands were also varied in their performances as Volkswagen had another slow month, down 16.3%, and BMW slipped 0.4% while Mercedes-Benz and Audi were up a healthy 13.9% and 13., Incentive spending climbs; highest level since June Total incentive spending rose for the second time on a sequential basis in as many months to reach $2,687, increasing by an average of $100 since September, per Autodata. Unlike last month, the 8.6% increase in sales outpaced the climb in incentives, which were up 8. compared to last year. However, the rise in spending is cause for concern as it was the second-highest jump recorded since May 2012, slotting in below last month s increase of 11.9%. In addition, the month was the tenth in a row in which spending grew on a prior-year basis; this trend has pushed year-to-date spending up by 3.1% (Continued on page 9) NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 8

9 Average Incentive Spending Guidelines December 2013 [ NEW & USED MARKET TRENDS continued ] compared to the same period last year. Many domestic brands increased spending significantly, but Chrysler Group LLC held back as Jeep and Dodge were down a respective 18.8% and 5.3% while Chrysler was up 8.9%. General Motors followed a different pattern and spent more aggressively as Chevrolet, Buick, and Cadillac incentives were up 26%, 29.8% and 36%, respectively. Ford was up 27% despite having a worse sales month than its peers, yet Lincoln spent 19.4% less while increasing deliveries. Adding to Nissan North America s successful month was the fact that the Nissan brand spent 2.2% less while Infiniti s incentives were down 10.7%. On the other hand, Toyota Motors Sales had a good month, but was the only one of the Japanese Big Three to increase spending as incentives for the Toyota and Lexus brands were up 8.7% and 1.8%, respectively. Incentives Average of Total $2,800 $2,700 $2,600 $2,500 $2,400 $2,300 $2,200 $2,100 Source: Autodata American Honda Motor Co. had a slow sales month, but it was not that bad considering its significant pullback in incentives with Honda and Acura spending 9.6% and 19.5% less than last year, respectively. Subaru continues to do more with less as its sales were up 29.8% even though it cut incentives by 16.3% compared to a year ago due to its inventory dropping to a mere 30- day supply. Hyundai remains the second-lowest spender, but saw its incentives jump 35.6% as it tries to generate sales. On the luxury side, Land Rover spent the least after Porsche and decreased incentives by 38.1% yet was able to grow sales by 24.8% as the brand quietly continues to flourish in After experiencing an increase last month, finance subvention was down 6.1% while lease remains up at 3.5%. Interestingly, dealer cash shot up by 34.2%, its first increase since May, while customer cash went up only 6.6% after being up 19.8% a month ago. Growth in customer cash usage has persisted since January to the extent that cash spending is now 8. higher than it was a year ago. By comparison, finance and lease subvention have both fallen by 0.8%, while dealer cash has grown by 4.7% (albeit from a low starting point). (Continued on page 10) YoY Change 14% 12% 1 8% 6% 4% 2% -2% -4% -6% -8% Percent Change NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 9

10 Days of Supply Guidelines December 2013 [ NEW & USED MARKET TRENDS continued ] New vehicle supply rises by six days versus prior year Inventory remained at 76 days for the second consecutive month, increasing by six days compared to last November. Nissan North America s positive sales month translated into a drop in days supply, as Infiniti and Nissan saw respective drops of 37 and 12 days to finish at just over 68 days for each. Mitsubishi sales were also up a significant 69.9%, which resulted in a 28-day decrease in supply, but inventory remains high at 107 days. While General Motors also had a strong sales month, Buick inventory jumped by 22 days to end at 114 days and the only brand whose inventory decreased was Cadillac, falling by six days to settle at 115 days. New Vehicle Days' Supply Days' Supply YoY Change Day Change Source: Wardsauto.com NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 10

11 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Prior- Change (thousands) Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Unemployment Rate (%) Guidelines December 2013 [ ECONOMIC TRENDS ] Another month of robust hiring follows other positive economic news. The economy expanded at an annual rate of 3.6% in the July-September quarter, the fastest rate of growth since early Still, nearly half that gain came from businesses building their stockpiles. The recent economic upturn has been surprising; many economists expected the government shutdown in October to hobble growth, yet the economy motored along without much interruption. The Federal government shutdown in the first half of October had a small impact on fourth quarter economic growth. Some Federal workers on unpaid leave put off purchases because of the uncertainty, but they resumed spending once they were paid in full after the shutdown ended. Unemployment and Labor Participation Rates Seasonally Adjusted Participation Rate Unemployment Rate Labor Participation Rate (%) Monetary policy is in a period of transition as Federal Reserve Chairman Ben Bernanke s term is set to expire at the end of January The Federal Open Market Committee (FOMC) is expected to maintain the current $85 billion per month of central bank purchases of long-term Treasuries and mortgage-backed securities until their last meeting under Chairman Bernanke in late January. At that point, the FOMC will start to gradually reduce its asset purchases, wrapping them up by the end of This will lead to a steady increase in long-term interest rates, but the underlying fundamentals of the economy should be strong enough to withstand the higher rates. Source: U.S. Bureau of Labor Statistics ly Change in Nonfarm Payrolls Seasonally Adjusted Source: U.S. Bureau of Labor Statistics Short-term rates will remain near zero for another couple of years. The FOMC has stated that it will not begin to raise the Federal funds rate at least until the unemployment rate falls below 6.5%, which will likely happen at the end of But that is a threshold, not a trigger, and the Committee has made it clear that the funds rate will remain close to zero for a while after the unemployment rate falls below 6.5%. (Continued on page 12) NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 11

12 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Index Level Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Housing Starts (thousands) Guidelines December 2013 [ ECONOMIC TRENDS continued ] A fourth straight month of solid hiring cut the U.S. unemployment rate in November to a five-year low of 7. and the gains in the job market could spur greater economic growth. The Labor Department reported that employers added 203,000 jobs, nearly matching October's revised gain of 200,000. The economy has now generated an average of 204,000 jobs from August through November. That's up from 159,000 a month from April through July. Many of the November job gains were in higherpaying industries. Manufacturers added 27,000 positions, the most since March 2012, while construction firms gained 17,000. The two industries have created a combined 113,000 jobs in the past four months. Greater hiring could support healthier spending as job growth has a dominant influence over much of the economy. If hiring continues at the current pace, a virtuous cycle starts to build with more jobs leading to higher wages, more spending and faster growth. But more higher-paying jobs are also necessary. Roughly half the jobs that were added in the six months through October were in four low-wage industries: retail; hotels, restaurants and entertainment; temp jobs; and home health care workers. Existing-home sales declined for the second consecutive month in October, while constrained inventory means home prices continue to see double-digit year-over-year gains, according to the National Association of Realtors. Total existing-home sales fell 3.2% to a seasonally adjusted annual rate of 5.12 million in October from 5.29 million in September, but are 6% higher than the 4.83 million-unit level in October Sales have remained above year-ago levels for the past 28 months. Total Housing Starts, Privately Owned Seasonally Adjusted Source: U.S. Census Bureau (Continued on page 13) S&P/Case-Shiller 20-City Composite Home Price Index Three-month moving average published with a two-month lag. Source: S&P Dow Jones NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 12

13 Average Price Average Price Guidelines December 2013 [ ECONOMIC TRENDS continued ] The national median existing-home price for all housing types was $199,500 in October, up 12.8% from October 2012, which is the 11th consecutive month of double-digit yearover-year increases. Total housing inventory at the end of October declined 1.8% to 2.13 million existing homes available for sale, which represents a 5-month supply at the current sales pace; the relative supply was 4.9 months in September. Unsold inventory is 0.9% above a year ago when there was a 5.2-month supply. Despite an increase in the U.S. average retail price of regular gasoline to $3.29 per gallon on November 25, gasoline prices remain near the lowest level of 2013 and last year at this time. Lower global crude oil prices, high profitability for diesel fuel that has been encouraging refiners to increase throughput, high inventories and the switch to less-costly winter grades of gasoline are among the factors currently driving gasoline prices. Spot prices for Brent crude oil dropped $4.66 per barrel from September 3 to November 25. West Texas Intermediate (WTI) crude prices, which are much less significant to gasoline price formation than Brent prices, fell by $14.81 per barrel over the same period. The decline in crude oil prices was partly driven by lower demand for crude oil due to seasonal refinery maintenance. EIA's November Short-Term Energy Outlook (STEO) forecasts Brent and WTI prices to decline further to $106 and less Regular Grade Gasoline Prices (all formulations) Average Price Per Gallon $ YoY Change $4.00 $3.90 $3.80 $3.70 $3.60 $3.50 $3.40 $3.30 $3.20 $3.10 Source: U.S. Energy Information Administration On-Highway Diesel Fuel Prices Average Price Per Gallon $ YoY Change $4.15 $4.10 $4.05 $4.00 $3.95 $3.90 $3.85 $3.80 $3.75 $3.70 Source: U.S. Energy Information Administration than $95 per barrel in December, respectively, and down further to $101 and $93 by the end of However, heightened uncertainties surround this forecast because of global crude oil supply disruptions. $0.40 $0.30 $0.20 $0.10 $0.00 ($0.10) ($0.20) ($0.30) ($0.40) ($0.50) $0.20 $0.15 $0.10 $0.05 $0.00 ($0.05) ($0.10) ($0.15) ($0.20) ($0.25) Price Change Price Change Fiscal policy has been a significant drag on economic growth in 2013, but that will fade in In addition to the shutdown, increases in the Federal personal income tax and (Continued on page 14) NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 13

14 [ ECONOMIC TRENDS continued ] the Social Security payroll tax have weighed on growth in disposable income and consumer spending this year. The spending cuts under the sequester that took effect in the spring have also been a drag on growth. But taxes are not expected to increase in 2014, and any spending cuts next year will be smaller than this year s. There is still the potential for another government shutdown in early 2014 the spending agreement that reopened the government only lasts until January 15 and Congress will need to raise the debt limit again in February. But current signs strongly indicate that lawmakers will settle on a budget prior to the mid-january deadline, which should allow them to raise the debt limit on time. NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 14

15 [ NADAGUIDES.COM SEARCH TRENDS ] NADAguides.com is the most comprehensive vehicle information website on the internet today, offering a broad range of information and services to help educate consumers in the market to buy, sell, trade, or simply shop for a vehicle. NADAguides is an alliance partner of NADA Services Corporation. The figures contained below are based on consumer activity on nadaguides.com and are calculated by comparing the number of unique lookups between November 2012 and Mercedes-Benz Volkswagen Chevrolet Land Rover Mitsubishi Annual Change in Consumer Activity: New Make Audi Lincoln MINI Acura Volvo Nissan Kia Buick Dodge Subaru Toyota Chrysler Mazda Honda Cadillac Ford Lexus BMW Smart Porsche Infiniti GMC Jeep Hyundai Jaguar Scion -53% Source: NADAguides.com -31% -31% -1-11% -11% -17% -17% -5% -6% -6% -6% -7% 2% 7% 6% 5% 12% 9% 18% 16% 14% Top 10 Researched New Models 22% % 67% 8 116% Percent Change Rank MY MAKE MODEL Ford F Chevrolet Silverado Ram Truck Honda CR-V Toyota Tacoma Nissan Altima Honda Accord Sdn Volkswagen Jetta Sedan Chevrolet Silverado Ram Truck 1500 Annual Change in Consumer Activity: Used Make Porsche Kia Volvo Saab Mazda GMC Saturn Mercury Audi Cadillac Lincoln Infiniti MINI Mitsubishi Volkswagen Suzuki Buick Acura Subaru Chrysler Mercedes-Benz Jeep Hyundai BMW Nissan Chevrolet Pontiac Ford Dodge Lexus Scion Honda Hummer Toyota Jaguar -16% Land Rover-18% Source: NADAguides.com -1% -2% -2% -2% -3% -3% -4% -4% -4% -5% -5% Top 10 Researched Used Models 7% 5% 5% 4% 4% 3% 3% 2% 2% 2% 2% 2% 2% 1% 1% 1% 1% 16% -2-15% -1-5% 5% 1 15% 2 Percent Change Rank MAKE MODEL 1 Ford F Chevrolet Silverado Dodge Ram Honda Accord Sdn 5 Toyota Camry 6 Ford Mustang 7 Jeep Grand Cherokee 8 BMW 3 Series 9 Chevrolet Impala 10 Nissan Altima NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 15

16 [ NADA OFFICIAL USED CAR GUIDE TRENDS ] ly Change in NADA Used Car Guide Value November 2013 v. December 2013 NADA Segment 2008MY 2009MY 2010MY 2011MY 2012MY* Compact Car -3.1% -3.3% -2.7% -2.7% -2.5% Compact Utility -2.2% -2.2% -2.3% -2.3% -2.3% Large Pickup -1.3% -1.5% -1.2% -1.1% -0.9% Large SUV -2.4% -1.8% % -1.5% Luxury Car -3.4% -2.8% -3.1% -3.5% -2.8% Luxury Utility -1.8% -1.4% -2.2% -2.2% -1.5% Mid-Size Car -2.9% -2.8% -2.6% -2.8% -2.4% Mid-Size Utility -2.6% -1.8% -1.4% -2.1% -2.1% Mid-Size Van -2.4% -2.2% -2.1% % *Value movement can be influenced by newly valued vehicles. Annual Change in NADA Used Car Guide Value December, 2012 v NADA Segment 5YR 4YR 3YR 2YR 1YR YTD Change in NADA Used Car Guide Value January December 2013 YoY Segment Change Compact Car -0.1% -1.2% 2.9% -1.2% 1.3% 2. Compact Utility 2.5% 2.4% 3.4% 1.9% 1.3% 0.2% Large Pickup % 5.7% 11.2% 5.4% 10.3% Large SUV 8.8% 3.4% 0.1% % 2.4% Luxury Car 3.8% 1.7% 4.1% 0.1% 8.2% 1.7% Luxury Utility 3.7% 9.1% 4.9% % 0.4% Mid-Size Car 0.6% -1.1% 9.7% -0.2% 2.9% 3.5% Mid-Size Utility 7.3% 5.7% 4.9% % 3.6% Mid-Size Van 18.8% 7.3% 3.5% 12.9% 4.4% 13.3% *Calculations are based on vehicle age, i.e. values for 1 year old vehicles in CY2012 are compared against values for 1 year old vehicles in CY2011. NADA Segment 2008MY 2009MY 2010MY 2011MY 2012MY* YTD Segment Change Compact Car % -14.3% -13.6% -13.8% -14.5% Compact Utility % -11.8% -10.2% -9.9% -11.6% Large Pickup -5.6% -5.1% -3.7% -1.9% -2.3% -3.6% Large SUV -12.9% -11.6% -9.7% -6.5% -7.1% -9.2% Luxury Car -16.6% -14.8% % -12.7% Luxury Utility -16.4% -13.3% -13.7% -12.7% -11.1% -13. Mid-Size Car -14.4% -13.3% -12.9% -12.3% -11.8% -12.6% Mid-Size Utility -15.9% -13.9% -11.2% -10.9% -10.7% -12.2% Mid-Size Van -16.6% -13.2% -10.9% -9.8% -8.9% -11.2% NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 16

17 AT NADA USED CAR GUIDE What s New Available on iphone, ipad and Android devices, NADA MarketValues is the fastest, easiest and most cost-efficient way to make smart vehicle decisions on the go. Subscriptions start at $50 per month and when you download NADA MarketValues from Google Play or the Apple Store for $1.99, you ll receive a FREE 30-day trial! On the Road Join us at the NADA Used Car Guide booth #3939 at the 2014 NADA Convention & Expo in New Orleans from January 24 to January 27 and learn about the enhanced NADA MarketValues, enhanced NADA AppraisalPRO and new NADA Appraisal. Exclusive to NADA and NIADA members, we have two convention promotions: a free ipad mini with an annual subscription to NADA AppraisalPRO or 60 days free of NADA MarketValues. Also at the 2014 NADA Convention & Expo, Mike Stanton, vice president and chief operating officer, will highlight the company s initiatives to kick off the NADA Used Car Guide press conference on Saturday, January 25. Jonathan Banks, executive automotive analyst, will then discuss new and used vehicle market trends, as well as how market conditions will affect used vehicle depreciation and prices in About NADA Used Car Guide Since 1933, NADA Used Car Guide has earned its reputation as the leading provider of vehicle valuation products, services and information to businesses throughout the United States and worldwide. NADA s editorial team collects and analyzes over one million combined automotive and truck wholesale and retail transactions per month. Its guidebooks, auction data, analysis, and data solutions offer automotive/truck, finance, insurance, and government professionals the timely information and reliable solutions they need to make better business decisions. Visit to learn more. Financial Industry, Accounting, Legal, OEM Captive Steve Stafford x7275 sstafford@nada.org Credit Unions, Fleet, Lease, Rental Industry, Government Doug Ott x4710 dott@nada.org Automotive Dealers, Auctions, Insurance Jim Dodd x7115 jdodd@nada.org Business Development Manager Jim Gibson x7136 jgibson@nada.org Director, Sales and Customer Service Dan Ruddy x4707 druddy@nada.org Automotive OEMs Stu Zalud x4636 szalud@nada.org PR Manager Allyson Toolan x7165 atoolan@nada.org NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 17

18 NADA CONSULTING SERVICES NADA s market intelligence team leverages a database of nearly 200 million automotive transactions and more than 100 economic and automotive market-related series to describe the factors driving current trends to help industry stakeholders make more informed decisions. Analyzing data at both wholesale and retail levels, the team continuously provides content that is both useful and usable to the automotive industry, financial institutions, businesses and consumers. Complemented by NADA s analytics team, which maintains and advances NADA s internal forecasting models and develops customized forecasting solutions for automotive clients, the market intelligence team is responsible for publishing white papers, special reports and the Used Car & Truck Blog. Throughout every piece of content, the team strives to go beyond what is happening in the automotive industry to confidently answer why it is happening and how it will impact the market in the future. Senior Director, Vehicle Analysis & Analytics Jonathan Banks x4709 jbanks@nada.org Senior Manager, Market Intelligence Larry Dixon x4713 ldixon@nada.org ADDITIONAL RESOURCES Automotive Analyst David Paris x7044 dparis@nada.org Automotive Analyst Joseph Choi x4706 jchoi@nada.org Guidelines Updated monthly with a robust data set from various industry sources and NADA s own proprietary analytical tool, Guidelines provides the insight needed to make decisions in today s market. White Papers NADA s white papers and special reports aim to inform industry stakeholders on current and expected used vehicle price movement to better maximize today s opportunities and manage tomorrow s risk. NADA Perspective Leveraging data from various industry sources and NADA s analysts, NADA Perspective takes a deep dive into a range of industry trends to determine why they are happening and what to expect in the future. Used Car & Truck Blog Written and managed by the Market Intelligence team, the Used Car & Truck Blog analyzes market data, lends insight into industry trends and highlights relevant events. Connect with NADA Read our Blog nada.com/usedcar Follow Us on Find Us on Facebook Facebook.com/NADAUsedCarGuide Watch Us on YouTube Youtube.com/NADAUsedCarGuide Disclaimer: NADA Used Car Guide makes no representations about future performance or results based on the data and the contents available in this report ( Guidelines ). Guidelines is provided for informational purposes only and is provided AS IS without warranty or guarantee of any kind. By accessing Guidelines via or the NADA website, you agree not to reprint, reproduce, or distribute Guidelines without the express written permission of NADA Used Car Guide. NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 18