2011 NIADA USED CAR INDUSTRY REPORT 1.

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1 211 NIADA USED CAR INDUSTRY REPORT 1

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5 INTRODUCTION Table of Contents 5 INTRODUCTION By Michael R. Linn, President, NIADA Services 6 SECTION ONE NIADA Membership Data 16 SECTION TWO Used Vehicle Industry Data from CNW Research 26 SECTION THREE Buy Here Pay Here Industry Benchmarks 3 SECTION FOUR The Role of the Internet in the New and Used Vehicle Purchase Process (furnished by AutoTrader.com and R.L. Polk) 34 SECTION FIVE AutoZone/NIADA Parts and Service Analysis 38 SECTION SIX Independent Dealers and Vehicle History (furnished by CARFAX) 4 SECTION SEVEN Auto Transport Analysis (furnished by uship) 42 SECTION EIGHT Auction/Remarketing Commentary by Tom Webb of Manheim and Tom Kontos of ADESA 44 SECTION NINE The Effective Use of GPS in the Industry 48 SECTION TEN NIADA Membership Survey A PUBLICATION OF THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION AND USED CAR DEALER MAGAZINE Used Car Dealer (ISSN X) is published monthly with one additional special issue, Used Car Industry Report, that is published in May by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX ; phone (817) Annual subscription rates for NIADA members: $8 Periodicals postage paid at Arlington, TX, and at additional offices. POSTMASTER: Send address changes to Used Car Dealer, 2521 Brown Blvd., Arlington, TX The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Used Car Dealer or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as member of NIADA, does not constitute an endorsement of the products or services featured. Copyright 211 by NIADA Services, Inc. All rights reserved. Download and view the 211 Used Car Industry Report at / publications The used motor vehicle industry is alive and well, and news of independent dealer sales eclipsing franchise dealer sales of used cars over the last few months is even more encouraging. This 13th edition of NIADA s Used Car Industry Report brings you a snapshot of all of this activity and provides valuable insight in all aspects of dealer operations. We are very proud of this annual report, and are amazed at how many calls and s we get referencing the data in this publication. We at NIADA find it to be one of our most frequently used tools as we interact with those businesses and individuals who are involved in the automotive industry. We hope that you will find the statistics and narrative just as valuable for your own needs. In this edition, you will find familiar categories of statistics from previous years in addition to several new studies and analysis provided to us this year by NIADA s National Corporate Partners. The Used Car Industry Report is divided into a record ten sections of data this year and is our largest and most comprehensive report we have ever published for our dealer members. Section One is traditionally a survey of NIA DA members. We cannot stress enough the importance for our dealer members to take a brief five minutes out of the year to complete and return these surveys to us. They can be found in your new and renewing member packets, in certain issues of Used Car Dealer Magazine, at various NIADA events, and by an survey coming your way later in the year. Your answers allow us to accumulate the very valuable data for this section, which also allows you to compare your dealership operations to those dealer member averages. This survey also allows us to develop new programs, services and benefits and it ensures we re providing the right kind of services to our members. Another familiar standard in Section Two is the work of Art Spinella of CNW Marketing Research in Oregon. His name is synonymous with comprehensive, indepth statistical data about the used motor vehicle industry. Somehow, he understands one of the most sophisticated industries with its complex operations which survived within an environment of economic chaos. Having his materials in our report each year is a little like working alongside the guru of statistical research. Not only are we impressed with his analysis, we are also honored. Art s work appeared in the very first Used Car Industry Report and has been included in every edition since. Section Three features Buy Here Pay Here benchmarks provided by Ken Shilson of Sub Prime Analytics and the National Alliance of Buy Here Pay Here dealers along with NCM Associates. Although this segment of the used car industry has been growing for some time, Buy Here Pay Here took on special interest this past year as dealers started reexamining their operations and reviewing opportunities after the recession in. Prospective and current BHPH business owners can use these Benchmarks to determine where they should be in comparison to others and how they can more successfully build their operations. Sections Four through Seven are new this year from our generous partners, Autotrader. com, AutoZone, CARFAX and uship. Section Four of the report is a special study recently completed by AutoTrader.com and R.L. Polk entitled The Role of the Internet in the New & Used Vehicle Purchase Process. The data analyzes how much time consumers spend online during the vehicle purchase process, why shoppers use the internet, and what types of information consumers are looking for that could lead to a sale. Interestingly enough, the report indicates that despite heavy internet usage, initial contact with the dealer still occurs most often offline and at the actual dealership. Section Five is a valuable new section for those that profit from parts, service work, reconditioning and aftermarket products. One of our newest corporate partners, AutoZone, captures perhaps some of the best partner data we have ever seen on what NIADA members spend online ordering, and even details information on what products dealers are purchasing most. For those dealers with service bays, this is one section you should especially study. And for those looking to start up a service bay(s) and profit from parts and service, this section is a great tool for you to use in getting started. For the second straight year, CARFAX has provided some very interesting data for our report. This year, Section Six focuses on a very hot topic: Rising wholesale prices and competition in the wholesale market. This section focuses on impact of different tactics independent dealers can use in the wholesale market to acquire the best inventory at the most competitive prices and looks at how these tactics impact a dealers gross and turn. This section also formulates a wholesale strategy to assist our dealers. Section Seven, a new section this year, brings you transportation data, courtesy of our industry partner uship. The two charts included in this section show the most popular origins & destinations with their respective mileage bands, and the mileage breakdown nationwide with the respective average shipping price for that mileage range. Section Eight is familiar and highly valuable as a highlevel picture of our industry. It includes overviews provided by highlyrespected automotive economists Tom Kontos of ADESA and Tom Webb of Manheim. As economists, they both understand the synergy between independent dealers and the auction industry they represent. They analyze past activities which impacted the used motor vehicle marketplace. Then they draw in economic factors, try to peer into the future, and share their economic insight with us. Their commentary is the tie that brings all of these sections into a coherent pattern. The final portion of the Used Car Industry Report is the NIADA member survey for next year. It is a keystone in our communications with dealers. NIADA is an organization dedicated to improving the used motor vehicle industry. Please take a few moments to start the crucial communication process designed to help us fulfill your needs. BY MICHAEL R. LINN, PRESIDENT, NIADA SERVICES, INC. 211 NIADA USED CAR INDUSTRY REPORT 5

6 SECTION ONE NIADA MEMBERSHIP DATA NIADA MEMBERSHIP DATA NIADA MEMBERSHIP DATA NIADA MEMBERSHIP DATA NIADA MEMBERSHIP NIADA MEMBERSHIP DATA TYPES OF BUSINESSES YOU OPERATE 8% NIADA MEMBERSHIP DATA CMD 6% RETAIL BHPH 54 One of the best ways to gauge the success of your dealership and it s operations is to compare your situation and your dealer data to those of other NIADA members around the country. Each year NIADA surveys a variety of topics which cover demographic and business data. This section provides a two year history of every question on our member survey. This year s NIADA Member Data section also includes a third reference for each question from the surveys collected of our NIADA Certified Master Dealers (CMD). In many instances, there is a vast difference in the analysis from a regular NIADA Dealer Member compared to our members who have completed and passed the NIADA Certified Master Dealer course. This added reference for each question proves without a doubt the true value in the Certified Master Dealer course. For a list of upcoming CMD classes, go to /certifiedmasterdealer.php Our survey is included in Section Ten of this report. Surveys are also included in your new and renewing member packets as well as in a few issues of Used Car Dealer Magazine shortly. Please take a moment to complete and mail back your updated surveys so that we may continue to provide you with this very valuable report and reference source. WHOLE SALE NUMBER OF YEARS IN BUSINESS 3% 1% CMD.6 LESS THAN 1 YEAR IN BUSINESS 17. NUMBER OF EMPLOYEES 6% 5% 3% 1% CMD EMPLOYEE YEARS IN BUSINESS RENTAL EMPLOYEES LEASING YEARS IN BUSINESS SERVICE DEPT YEARS IN BUSINESS EMPLOYEES PARTS DEPT BODY SHOP YEARS IN BUSINESS EMPLOYEES OTHER NIADA USED CAR INDUSTRY REPORT

7 DATA NIADA MEMBERSHIP DATA NIADA MEMBERSHIP DATA NIADA MEMBERSHIP DATA WHERE YOU BUY YOUR CARS WHERE YOU SELL YOUR CARS 8% 6% % 6% CMD WHOLESALE AUCTIONS 91.5 OTHER DEALERS 61.7 ONLINE/ OTHER 44.7 CMD WHOLESALE AUCTIONS 73.5 OTHER DEALERS 59.2 ONLINE 26.6 DEALERSHIP LOT SIZE 5% SPECIALIZE IN 8% % 3% UNDER 1, SQ. FT ,1 25, SQ. FT ,1 5, SQ. FT OVER 5,1 SQ. FT CARS ONLY TRUCKS ONLY OFFER BOTH 26.9 HEAVY DUTY POWER SPORTS 26.5 RV S CMD CMD NUMBER OF LOCATIONS AUCTIONS ATTENDED PER MONTH 8% 6% % % CMD CMD NIADA USED CAR INDUSTRY REPORT 7

8 SECTION ONE NIADA MEMBERSHIP DATA AVERAGE RETAIL PRICE AGE OF VEHICLES SOLD 5% % 6% % % , 5,1 1, 1,1 15, 15,1 2, 2,1+ 12 YEARS 35 YEARS CMD CMD AVERAGE MONTHLY INVENTORY HOW YOU FINANCE FLOORPLAN INVENTORY 5% % % 1% CMD BANKS AUCTION FLOORPLAN CASH OTHER CMD TE: Numbers won t necessarily add to 1% because dealers finance multiple ways NUMBER OF SERVICE BAYS HOW YOU FINANCE CUSTOMERS NIADA MEMBERSHIP DATA 3% 1% CMD % 1% CMD BHPH 62.5 FINANCE COMPANY 45.8 BANKS OTHER 14.6 TE: Numbers won t necessarily add to 1% because dealers finance multiple ways NIADA USED CAR INDUSTRY REPORT

9 PAVED LOT CMD INDOOR SHOWROOM CMD 14.7% 14.4% 2.3% 2.6% 85.3% 85.6% 79.7% 79.4% 97.8% 2.2% 23.9% 76.1% OUTSIDE LIGHTING 6.6% CMD 6.4% SELL AFTERMARKET PRODUCTS CMD 93.4% 93.6% 63.4% 36.6% 64.3% 35.7% 1% 5% 5% FENCING ON PROPERTY CMD DO RECONDITIONING OR DETAILWORK CMD 52.% 48.% 47.6% 52.4% 7.% 3.% 29.4% 7.6% 45.7% 54.3% 73.9% 26.1% 211 NIADA USED CAR INDUSTRY REPORT 9

10 SECTION ONE NIADA MEMBERSHIP DATA HAVE WORKERS COMP CMD SEPARATE F&I DEPARTMENT CMD 67.7% 32.3% 19.6% 32.3% 67.7% 21.1% 78.9% 78.8% 21.2% 8.8% 8.4% 41.3% 58.7% FULLY INSURED INVENTORY CMD USE PAYMENT PROTECTION DEVICE CMD 83.% 17.% 16.% 84.% 79.9% 2.1% 78.1% 21.9% 84.8% 15.2% 41.3% 58.7% HAVE COMMERCIAL INSURANCE 8.8% CMD 8.6% DEALERSHIP WEBSITE 18.8% CMD 19.% NIADA MEMBERSHIP DATA 91.2% 97.8% 91.4% 2.2% 81.2% 91.4% 81.% 8.6% NIADA USED CAR INDUSTRY REPORT

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12 SECTION ONE NIADA MEMBERSHIP DATA SELL WARRANTIES OR SERVICE CONTRACTS WARRANTY/SERVICE CONTRACTS SOLD PER MONTH 5% % 38.2% 78.3% 61.6% 21.7% 38.4% 3% 1% CMD RENTAL CAR TYPE OF RENTAL CAR OPERATION 12.6% 87.4% 84.8% 12.4% 87.6% 15.2% 9% 8% 6% CMD 81.5 INDEPENDENT FRANCHISE 28.6 NIADA MEMBERSHIP DATA NIADA USED CAR INDUSTRY REPORT

13 SM nada AppraisalPro auction transactions retail, tradein & loan values + auction values retail transactions used vehicle days supply asking prices vehicle history reports When you re In The LAneS, you Ve GoT 3 SECONDS TO DECIDE

14 SECTION ONE NIADA MEMBERSHIP DATA ANNUAL RETAIL SALES 3% Dealers chose a wide variety of advertising mediums in. Surprisingly, a large number of respondents dropped TV and radio from their advertising mix in favor of the more traditional newspaper ads as well as a continued strong online presence. 1% 1 vehicles 1125 vehicles 2514 vehicles 4155 vehicles vehicles vehicles , vehicles ,1+ vehicles ADVERTISING MEDIA USED CMD % % ANNUAL WHOLESALE SALES 5% % % 3% vehicles CMD vehicles vehicles vehicles 5517 vehicles vehicles 8511, vehicles 1,1+ vehicles 2.3 1% TV NEWSPAPERS RADIO SPECIALTY ONLINE OTHER MAGAZINE PUBLICATIONS CMD TE: Numbers won t necessarily add to 1% because dealers advertise multiple ways NIADA MEMBERSHIP DATA PERCENTAGE OF SALES TO WOMEN BUYERS* % 2.9 1% % 618% 811% * Annual comparative data not available HOW DO YOU USE THE INTERNET AT YOUR BUSINESS 8% 6% DEALERSHIP WEBSITE CMD INDUSTRY RESEARCH 83.3 ONLINE BUYING AND SELLING ONLINE AUCTIONS ONLINE FINANCING OTHER NIADA USED CAR INDUSTRY REPORT

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16 SECTION TWO USED VEHICLE INDUSTRY DATA from cnw marketing research USED CAR INDUSTRY DATA FROM CNW MARKETING RESEARCH USED CAR INDUSTRY DATA FROM CNW M USED VEHICLE INDUSTRY DATA FROM CNW MARKETING RESEARCH TOTAL USED VEHICLES SOLD % USED CAR INDUSTRY DATA FROM CNW MARKETING RESEARCH The following used vehicle market data presented in this section by CNW Research shows great promise and an upward positive swing in many important independent dealer data categories for, with forecasts for even greater improvements in 211. For the first time in over five years, the number of independent dealers in the U.S. finally increased from a prior year. In, CNW Research indicates there are 37,717 used dealers successfully operating, up over 1,299 dealers from. Of even greater significance is the huge increase in the average number of units sold by independent dealers in, up to 351 units sold yearly per dealer. This represents the highest average units sold per dealer in 1plus years. Also, for the first time in many years, independent dealer market share surpassed franchise market shares. The high demand for used vehicles and the dwindling supply of quality inventory continue to be problematic for dealers. However, this issue has been a positive for dealers in a few areas. Quality used vehicles are selling fast, leading to a large decrease in Inventory Days Supply. The high demand and short supply has also justified higher asking prices for the better quality and certified inventory. The average asking price per vehicle and the average prices of vehicles actually sold were both the highest they have been in over five years. As noted on page 18, the average asking price rose to an average of $9,428, and the average selling price per unit was $8,875 in. The Internet continues to play a significant role in sales. 44 percent of all units are now offered on the internet, and over 11 percent of all units are now sold directly over the internet, the highest percentage seen in recent years. Finally, for the first time in this report, CNW Research presents on page 24 a most valuable chart of BHPH dealer counts by state. The chart astonishingly indicates that 31,384 independent dealers participate in some form of BHPH in their daily operations. Consumer credit issues surely play a factor in many of these dealers taking the risk in financing certain customers. 1% INDEPENDENT DEALERS NUMBER OF VEHICLES SOLD PER INDEPENDENT DEALER (Average per year per independent dealer) This profile includes all active dealerships with an actual place of business and multiple sales of the same vehicle (post repossession, etc.) SALES VOLUME BY INDEPENDENT DEALERS (in millions) FRANCHISE DEALERS CASUAL SALES NUMBER OF INDEPENDENT DEALERS IN THE U.S. 6K 4K 2K 42,791 38,662 Source: CNW Research, Inc. 36,418 37, NIADA USED CAR INDUSTRY REPORT

17 ARKETING RESEARCH USED CAR INDUSTRY DATA FROM CNW MARKETING RESEARCH TOTAL USED VEHICLE SALES PER MONTH (In millions, independent and franchise dealers) TOTAL SALES : 35.5 TOTAL SALES : JAN FEB MAR APR MAY JUN JUL AUG SEP OCT V DEC TOTAL USED VEHICLE SALES PER MONTH, PER OUTLET INDEPENDENT DEALERS (in millions) For example, in January, independent dealers sold 668,3 vehicles from 36,125 locations. That results in 18.5 units per outlet JAN FEB MAR APR MAY JUN JUL AUG SEP OCT V DEC USED VEHICLE INVENTORY DAYS SUPPLY (in days) INTERNET USED VEHICLE SALES (in millions) SEPT V HIGH JAN FEB 5.8 SEPT APRIL LOW 4.21 OCT JUNE UNITS OFFERED ON INTERNET UNITS SOLD THROUGH INTERNET 211 NIADA USED CAR INDUSTRY REPORT 17

18 SECTION TWO USED CAR INDUSTRY DATA from cnw marketing research CNW MARKETING RESEARCH USED VEHICLE ADVERTISING DISTRIBUTION INDEPENDENT DEALERS WHO ADVERTISE (Listed by percentage of money used for particular type of advertising; note that many dealers advertised more than one way, so percentages won t necessarily add to 1) NEW AND USED VEHICLE SALES (in millions) NEW VEHICLES USED VEHICLES TOTAL SALES CATEGORY Classified Ads Radio Television Internet PURCHASE OF EXTENDED WARRANTIES FOR USED CARS 15 AVERAGE PRICE OF USED VEHICLES SOLD BY INDEPENDENT DEALERS $1K $8,65 $8,358 $8,459 $8, $7.5K $5K $2.5K NEW 24 YEAR OLD 57 YEAR OLD 81 YEAR OLD OVER 1 YEARS PURCHASE OF EXTENDED WARRANTIES FOR NEW CARS USED CAR INDUSTRY DATA FROM CNW MARKETING RESEARCH AVERAGE INDEPENDENT DEALERS ASKING PRICE VS. TRANSACTION PRICE 9.5K 9K 8.5K 8K 7.5K 7K 6.5K 6K 5.5K ASKING PRICE $8,937 $8,314 TRANSACTION PRICE $9,428 $8, NEW YEAR OLD YEAR OLD 81 YEAR OLD PAYMENT PROTECTION DEVICES REDUCING LATE PAYMENT AND REPOSSESSIONS (Dealers with devices) REDUCTION OF LATE PAYMENT OVER 1 YEARS REDUCTION OF REPOSSESSIONS NIADA USED CAR INDUSTRY REPORT

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20 SECTION TWO USED CAR INDUSTRY DATA from cnw marketing research INDEPENDENT USED VEHICLE INCOME USED VEHICLE SALES (As percent of total sales) SERVICE AND PARTS (As percent of total sales) $2.5M $2M $1.5M $1M $1,894, % $1,476,694 $1,428, % 37.17% $1,197, % $1.3M $1.2M $1.1M $1,281, % $1,169, % $1,132, % $1,88, % F&I INCOME (As percent of total sales) OTHER INCOME (As percent of total sales) USED CAR INDUSTRY DATA FROM CNW MARKETING RESEARCH $1.25M $1.2M $1.15M $1.1M $1.5M $1M $1,216, % $1,97, % $1,61, % $1,34, % TOTAL SALES (Averages all departments) $5M $4,519,223 $4M $3,972,812 $3M $2M $1M $25K $2K $15K $127, % $1K $5K 27 $3,844,62 $228,834 $221, % 5.76% 28 $3,492,443 $171, % NIADA USED CAR INDUSTRY REPORT

21 DEALER PROFILE EXPENSES ADVERTISING EXPENSES ($ per vehicle) $8K $6K $4K $76,57 $253 per vehicle $66,269 $234 per vehicle $82,459 $267 $75,859 per vehicle $216 per vehicle $2K 27 RENT AND EQUIVALENT ($ per vehicle) $125K $1K $75K $5K $25K $115,214 $381 per vehicle 27 FLOOR PLAN INTEREST ($ per vehicle) $45K $4K $35K $3K $25K $35,986 $119 per vehicle $94,589 $334 per vehicle 28 $37,382 $132 per vehicle 28 $16,856 $346 per vehicle $39,222 $127 per vehicle $122,569 $349 per vehicle $42,495 $121 per vehicle While dealers were selling many more units in compared to the previous 1plus years (an average of 351 units per dealer), ADVERTISING EXPENSES PER VEHICLE ACTUALLY DECREASED to its lowest levels since 23. One could say this decrease in advertising per vehicle was due to HIGH DEMAND OF QUALITY USED INVENTORY, resulting in much shorter inventory turns for most vehicles, equating to less time having to advertise each unit. 211 NIADA USED CAR INDUSTRY REPORT 21

22 SECTION TWO USED CAR INDUSTRY DATA from cnw marketing research INDEPENDENT USED VEHICLE DEALER PROFILE TOTALS TOTAL GROSS (As percent of total sales per independent dealer) NET PROFIT BEFORE TAXES (As percent of total sales per independent dealer) $1,K $75K $5K $25K $645, % $51, % $462, % $389, % $1.5K $1K $.5K $1,227 $1, This profile includes all active dealerships with an actual place of business and multiple sales of the same vehicle (post repossession, etc.) RETAIL GROSS PROFIT (Percent of retail selling price) TOTAL EXPENSES (As percent of total sales per independent dealer) $125K $1K $75K $5K $86, % $71, % $45 $4 $35 $3 $25 $2 $ % 27 $ $ % 3.92% 28 $ % USED CAR INDUSTRY DATA FROM CNW MARKETING RESEARCH $25K USED VEHICLE SALES FINANCED VS. CASH (Franchised dealers) ,819,759 12,816, % 56.62% 12 (Financed) (Financed) % 43.38% 4 (Cash) (Cash) USED VEHICLE SALES FINANCED VS. CASH (Independent dealers) 11,721, % (Financed) 55.6% (Cash) 13,1, % (Financed) 56.3% (Cash) As units sold per year reached a TENYEAR HIGH, retail gross profits per vehicle unfortunately continued to decline, due to a large decrease in overall total sales volume from every income department, as referenced on page NIADA USED CAR INDUSTRY REPORT

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24 SECTION TWO USED CAR INDUSTRY DATA from cnw marketing research BUY HERE PAY HERE CHART BY STATE The following information includes dealerships that sell more than 5 percent Buy Here, Pay Here. Franchised Dealers BHPH lots are those located off site. That is, these BHPH lots are T on the same property as the franchised newcar dealership or the newcar dealership s used car lot. How to read: In, there were a total of 31,384 Buy Here Pay Here usedvehicle stores in the U.S. that had at least half of their finance contracts as BHPH notes. Among franchised newvehicle dealers, there were another 2,446 BHPH lots located away from the dealership s property. Not shown are franchised newcar dealerships with BHPH operations at their dealership site. CNW MR believes there are few such BHPH locations performing at least half of their business on a newvehicle dealership site even though many dealers might offer BHPH notes at that location. USED CAR INDUSTRY DATA FROM CNW MARKETING RESEARCH CY 9 Franchised CY 9 Licensed Total Dealers CY 1 Franchised CY 1 Licensed Total Dealers State Off Site BHPH Independent BHPH Selling BHPH Off Site BHPH Independent BHPH Selling BHPH Alabama Alaska Arizona Arkansas California 47 1,124 1, ,588 Colorado Connecticut Delaware Florida 77 2,191 2, ,34 Georgia Hawaii Idaho Illinois 42 1,321 1, ,369 Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hamp New Jersey 193 1,648 1, ,88 New Mexico New York 194 1,858 2, ,75 North Carolina North Dakota Ohio 73 2,623 2, ,734 Oklahoma Oregon Pennsylvania 113 2,198 2, ,328 Rhode Island South Carolina South Dakota Tennessee 14 1,3 1, ,59 Texas 12 3,82 3, ,26 Utah Vermont Virginia Washington Washington D.C West Virginia Wisconsin Wyoming Totals 2,355 3,912 33,267 2,446 31,384 33, NIADA USED CAR INDUSTRY REPORT

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26 SECTION THREE BUY HEREPAY HERE Industry Benchmarks BUY HEREPAY HERE INDUSTRY BENCHMARKS BUY HEREPAY HERE INDUSTRY BENCHMARKS BUY HEREP BUY HEREPAY HERE INDUSTRY BENCHMARKS BUY HERE PAY HERE INDUSTRY BENCHMARKS Annually, NABD, with the help of Shilson, Goldberg & Cheung CPAs, compiles Buy HerePay Here financial benchmarks from a database of more than 5 operations nationwide NABD benchmarks also include operating information on sales, collections and recoveries, and inventory management which were developed and supplied by NCM Twenty Groups, based upon a composite of all of their BHPH 2 Group members. The attached NABD benchmarks also include portfolio performance metrics which were compiled electronically by Subprime Analytics, who performed computerized portfolio analysis of approximately 91, subprime loans aggregating approximately $8 billion to identify loss rates and patterns. These statistics provide a comprehensive look at the financial and operating performance of the BHPH industry for the last three years and some interesting trend information for earlier periods. BUY HEREPAY HERE INDUSTRY BENCHMARKS / TRENDS The table below compares the resultant changes in gross profit from 28 (The numbers below are compiled from our best performing dealers and are not industry averages.): Note: All percentages are expressed as a percentage of sales. Unit sales in were generally lower versus the year ended although some operators offset these lower unit sales volumes with sales price increases. Only where operations expanded their operations and added additional lots did unit sales increase significantly. The inventory shortages explained above constrained growth, particularly for those who had capital limitations and who were unable to compete in the rising vehicle acquisition cost environment. Many operators controlled vehicle acquisition costs by purchasing higher mileage vehicles. They increased their reconditioning costs in order to make ready these higher mileage vehicles for resale. Average reconditioning costs increased almost $25 per unit in! Even the most profitable operators could not cover bad debt losses with finance income (where income equals or exceeds bad debt expense). This was largely because interest income was reduced as the average age of receivable portfolios increased due to a lower number of originations. (Interest revenue declines when the average age of the portfolio matures.) Bad debt defaults remained relatively constant with levels. Collections were strong where consumers had enough income to continue making payments in lieu of purchasing another vehicle. GROSS PROFIT COMPARISON: 28 SALES COST OF VEHICLE SALES SUBTOTAL FINANCING INCOME BAD DEBT GROSS PROFIT 1% (59%) 41% 15% (18%) 38% 1% (59%) 41% 16% () 37% AVERAGE CUSTOMER DOWNPAYMENT: 26 $1, $8 $6 $4 $2 $9 $1,18 $1,89 $1,4 28 1% (6%) 18% (21%) 37% $1, NIADA USED CAR INDUSTRY REPORT

27 AY HERE INDUSTRY BENCHMARKS BUY HEREPAY HERE INDUSTRY BENCHMARKS COST OF GOODS SOLD AND OPERATING EXPENSE DETAIL NABD BY SHILSON, GOLDBERG, CHEUNG AND ASSOCIATES, LLP According to the research, Buy HerePay Here dealers spent more money in on reconditioning vehicles and spent more for the vehicles themselves than they did in. BHPH FINANCIAL TRENDS 24 BAD DEBTS 15% 17% 19% 19% % OF SALES 21% 18% COST OF VEHICLE SALES % OF VEHICLE SALES % OF VEHICLE SALES 28 % OF VEHICLE SALES 1% COST OF VEHICLES RECONDITIONING COSTS OTHER 48.13% 7.17% 3.21% 49.3% 6.68% 2.85% 51.3% 4.12% 4.52% 5% TOTAL COST OF VEHICLE SALES 58.51% 58.56% 59.67% Source: NABD ADVERTISING BANK CHARGES CONTRIBUTIONS DEPRECIATION DUES AND SUBSCRIPTIONS INSURANCE LEGAL AND ACCOUNTING OUTSIDE SERVICES OFFICE EXPENSE RENT REPAIRS AND MAINTENANCE SALARIES (NOWNERS) TAXES GENERAL OTHER OPERATING EXPENSE TAXES PAYROLL UTILITIES AND TELEPHONE TRAVEL / TRAINING TOTAL OPERATING EXPENSE 2.5%.27%.3%.45%.1%.27%.35%.5%.65% 2.33%.41% 1.26%.11%.3%.49%.5%.26% 19.78% 2..21%.1%..8%.45%.51%.13%.58% 2.18%.22% 1.59%.26%.94%.77%.7%.27% 2.5% 1.55%.24%.1%.54%.2%.99%.5%.3% 1.31% 1.62%.27% 1.81%.3%.6% 1.11%.79%.38% 21.35% BHPH FINANCIAL TRENDS AVERAGE WEEKLY PAYMENT AMOUNT 27 $86 $84 $82 $8 $85 27 Source: NABD (for 2325) NCM (for 26) $84 $84 28 $85 LOSS STATISTICS (Statistics supplied by Subprime Analytics) SUBPRIME ANALYTICS BENCHMARKS SUBPRIME ANALYTICS BENCHMARKS AVERAGE GROSS DOLLAR LOSS (BEFORE RECOVERIES) $7,49 $7,72 AVERAGE NET DOLLAR LOSS (AFTER RECOVERIES) $5,9 $4,526 AVERAGE DEFAULT RATE (% OF LOANS WRITTEN OFF) 3.11% 3.39% AVERAGE GROSS DOLLAR LOSS RATE (% OF PRINCIPAL) 37.51% 39.18% AVERAGE NET DOLLAR LOSS RATE (% OF PRINCIPAL) 26.6% 26.52% AVERAGE RECOVERY (% OF PRINCIPAL CHARGED OFF) 29.8% 35.5% HIGHEST CUMULATIVE DEFAULT MONTH AFTER ORIGINATION 21ST MONTH 25TH MONTH HIGHEST FREQUENCY OF DEFAULT (MONTH AFTER ORIGINATION) 4TH MONTH 4TH MONTH WORST PERIODIC LOSS MONTH AFTER ORIGINATION FEBRUARY FEBRUARY THE ABOVE REFERENCED LOSS DATA WAS DETERMINED BY ELECTRONICALLY ANALYZING APPROXIMATELY 613, LOANS, AGGREGATING APPROXIMATELY $5.3 BILLION TO IDENTIFY LOSS RATES AND TO UNDERSTAND WHY THEY OCCURRED. 211 NIADA USED CAR INDUSTRY REPORT 27

28 SECTION THREE BUY HEREPAY HERE Industry Benchmarks While BHPH dealers sold many less units in than previous year, the 543 average yearly units sold per BHPH dealer are still much higher than the overall independent dealer average of 351 yearly units sold, noted in Section Two of this report. Also of note in this dealer operating chart is the large spike in reconditioning cost per vehicle in compared to. DEALER OPERATING INFORMATION Statistics supplied by NCM Associates, Inc. SALES AVERAGE UNITS SOLD PER DEALER (BHPH DEALS ONLY) AVERAGE CASH IN DEAL PER VEHICLE SOLD AVERAGE ACV PER VEHICLE SOLD (INCLUDES RECON) AVERAGE RECONDITIONING COST PER VEHICLE SOLD AVERAGE GROSS PER VEHICLE SOLD AVERAGE CASH DOWN PAYMENT AVERAGE AMOUNT FINANCED AVERAGE TERM OF LOAN (IN WEEKS) COLLECTIONS / RECOVERIES AVERAGE WEEKLY PAYMENT AMOUNT AVERAGE # OF ACCOUNTS PAST DUE AVERAGE # OF PAST DUE ACCOUNTS PER COLLECTOR AVERAGE LOSS PER CHARGE OFF AVERAGE PORTFOLIO DELINQUENCY CURRENT 1 DAYS 1129 DAYS 359 DAYS 689 DAYS 9+ DAYS INVENTORY MANAGEMENT AVERAGE NUMBER OF UNITS IN STOCK AVERAGE INVENTORY AGING 3 DAYS 316 DAYS 619 DAYS 91+ DAYS NCM BENCHMARKS 728 $4,865 $5,534 $556 $4,149 $1,272 $9, $ $4, % 7.8% 3.6% 1.7% 2. 1.% % 19.3% 12.8% 27.1% 1.% NCM BENCHMARKS 543 $4,85 $5,458 $798 $4,314 $1,152 $9, $ $4, % 1.3% 7.3% 2.9% 1.3% 1.7% 1.% % 21.1% % 1.% BUY HEREPAY HERE INDUSTRY BENCHMARKS BHPH FINANCIAL TRENDS AVERAGE CASH IN DEAL 27 Average cash in deal per unit sold $5, $4,5 $4, $3,5 $3, $2,5 $2, $1,5 $1, $5 $ $4, Source: NABD/NCM $4, $4,865 $4,85 BHPH FINANCIAL TRENDS 24 COSTS/EXPENSES 7% 6% 5% 3% 1% % COST OF VEHICLES 62% 22% 24 64% 64% 63% 18% 18% 19% OPERATING EXPENSES 6% 59% 59% 21% 21% $ Source: Shilson, Goldberg, Cheung & Associates, LLP AVERAGE TOTAL ACTUAL COST PER VEHICLE SOLD 27 Average total avg per vehicle sold (including recon) $6, $5, $4, $3, $2, $5,111 Source: NABD/NCM $5,284 $5,534 $5, NIADA USED CAR INDUSTRY REPORT

29 RATIO COMPARISONS. BUY HERE PAY HERE INDUSTRY BENCHMARKS PREPARED FOR NABD BY SHILSON, GOLDBERG, CHEUNG AND ASSOCIATES, LLP The NABD results combined dealer and finance affiliate numbers break down balance sheets and income statements into 16 categories. It also compares to the past two years so dealers can examine industry trends. RATIO COMPARISONS, COMBINED BUY HERE PAY HERE COMBINED BUY HEREPAY HERE BALANCE SHEET AVG. AVG. 28 AVG. (INVENTORY X DAYS) / COST OF VEHICLE SALES 63.4 DAYS DAYS DAYS COST OF VEHICLE SALES /AVERAGE INVENTORY DOLLARS 6.4 X 5.98 X 5.96 X VEHICLE SALES / AVERAGE INVENTORY DOLLARS X X 9.98 X VEHICLE SALES / TOTAL ASSETS.97 X.95 X.96 X TOTAL ASSETS / TOTAL LIABILITIES 1.93 X 1.82 X 1.61 X ALLOWANCE FOR BAD DEBTS / FINANCE RECEIVABLES* 22% 21% 18% FINANCE RECEIVABLES* / TOTAL ASSETS 96% 93% 89% TOTAL DEBT / TOTAL ASSETS 52% 55% 62% * FINANCE RECEIVABLES ARE NET OF UNEARNED FINANCE CHARGES INCOME STATEMENT BAD DEBTS / VEHICLE SALES 18% 21% COST OF VEHICLE SALES / VEHICLE SALES 59% 59% 6% GROSS PROFIT*** / VEHICLE SALES 38% 37% 37% OPERATING EXPENSE / VEHICLE SALES 21% 21% INTEREST EXPENSE / FINANCING INCOME 17% 18% 23% OPERATING INCOME / VEHICLE SALES 18% 16% 16% FINANCING INCOME / VEHICLE SALES 15% 16% 18% COMPENSATION** / VEHICLE SALES 1% 11% 11% RECONDITIONING COST / VEHICLE SALES 7% 7% 4% TES TO RATIO COMPARISONS: **Compensation excludes those of the owners ***Gross Profit is net of bad debts and financing income x = times Sell Inventory FAST & REV UP YOUR PROFITS with NIADA Certified! Administered by TM Get the best of all attributes solid, reputable administration from NAC, a warranty that incorporates a comprehensive inspection, online training, and the nationally recognized NIADA brand and the high performance tools, expert support and speed you need to leave your competitors in the dust with NIADA Certified! Get the GREEN LIGHT to start selling top quality NIADA Certified vehicles today! INVATIVE ONLINE TOOLS MAKE IT FAST & EASY TO: CERTIFY VEHICLES GENERATE COMPLIANT BUYER GUIDES EXPORT CERTIFIED INVENTORY TO THIRD PARTY PORTALS INCLUDING EBAY MOTORS GET AUTOCHECK VEHICLE HISTORY REPORTS AND, INSTANTLY PROCESS WARRANTIES! 211 NIADA USED CAR INDUSTRY REPORT 29

30 SECTION FOUR ROLE OF THE INTERNET in the New and Used Vehicle Purchase Process ROLE OF THE INTERNET IN THE NEW AND USED VEHICLE PURCHASE PROCESS ROLE OF THE INTERNET IN THE NEW AND USED V ROLE OF THE INTERNET IN THE NEW AND USED VEHICLE PURCHASE PROCESS The Internet is the preferred information source among vehicle buyers. In fact, 71 percent of both New & Used Vehicle Buyers said they used the Internet during the car shopping process. Furthermore, the chart below indicates 58 percent of Used Vehicle Buyers said that the Internet was the predominant source that led them to the dealers they bought from more than twice that of any other source cited in the study. As a result, effective online automotive advertising not only influences what makes and models consumers buy, but also influences which dealers they buy from. The Internet has become an increasingly important component of the vehicle purchase process. Consumers MOST USED SOURCE DURING SHOPPING PROCESS NEW BUYERS USED BUYERS 8% 71% 71% 6% Internet shopping for new and used vehicles can find a wealth of information and MOST INFLUENTIAL SOURCES LEADING TO THE DEALER tools on auto manufacturer, dealer and thirdparty websites. USED BUYERS 65% How much time do consumers ROLE OF THE INTERNET IN THE NEW AND USED VEHICLE PURCHASE PROCESS NEW BUYERS 58% spend online during the vehicle 55% purchase process? How does the 5% 45% Internet compare to other channels in 35% terms of influencing purchase? Why do shoppers use the Internet? 25% To answer these and related 16% 19% 15% questions, Polk and AutoTrader.com 7% recently teamed up to conduct 5% a study of recent car buyers: % INTERNET 4,5 U.S. consumers who had purchased a new or used vehicle 5% REFERRAL NEWSPAPER FROM FRIEND/FAMILY 4% 2% DIRECT MAIL 2% 2% OUTDOOR ADS 4% 2% 2% 1% 1% 1% TELEVISION MAGAZINE RADIO from a dealership within the prior six months. The findings provide insights into the role, usage and perceived NEW & USED VEHICLE BUYERS SPEND 6% OF THE SHOPPING PROCESS ONLINE For the first time ever, we now know the total amount of time that consumers spend on the car shopping process. According to the study, New Vehicle Buyers who use the Internet to shop for cars spend an average of 19 total hours shopping, while Used Vehicle Buyers spend an average of 18 total hours. Of that time, New and Used Vehicle Buyers spend the majority of their time online 11.5 and 11 hours, respectively, actively choosing to engage with the medium. Throughout the process, they are seeking content and being exposed to multiple brand impressions a big opportunity for automotive marketers to influence shoppers. Effectively engaging consumers at each point in their shopping process can dramatically improve the chances of turning a shopper into an actual buyer. helpfulness of the Internet in the vehicle purchase process. NEW VEHICLE BUYERS 7.5 HOURS OFFLINE 11.5 HOURS ONLINE UCIR_211.indd 3 NIADA USED CAR INDUSTRY REPORT 19 TOTAL HOURS SHOPPING TIME USED VEHICLE BUYERS 7 HOURS OFFLINE 11 HOURS ONLINE 18 TOTAL HOURS SHOPPING TIME 5/25/11 3:27 PM

31 ED VEHICLE PURCHASE PROCESS ROLE OF THE INTERNET IN THE NEW AND USED VEHICLE PURCHASE PROCESS HOW DO VEHICLE BUYERS INITIALLY CONTACT THE DEALERSHIP? 7 out of 1 of all vehicle buyers walk into the dealership without establishing contact with the dealer prior to their initial visit. Therefore, it has become increasingly important for automotive marketers to put methods into place to track advertising effectiveness (e.g., dealership walkin traffic). Understanding the influence that online advertising has on car shoppers can help automotive marketers determine the true value of their advertising spend, as well as how and where they can more effectively invest their marketing dollars. NEW & USED VEHICLE BUYERS SPEND MORE TIME ON THIRDPARTY SITES While both New & Used Buyers shop online in a variety of places, they spend the most time on thirdparty sites. This information is important because it reveals that vehicle buyers find value shopping on manufacturer sites, dealer sites, and thirdparty sites alike. These sites serve as complements to each other during the shopping process. Knowing where car shoppers spend their time online also demonstrates the need for automotive marketers to have a broad Internet strategy. To effectively reach and influence vehicle buyers online, a defined marketing message must be in front of as many inmarket shoppers as possible, as often as possible. NEW VEHICLE BUYERS USED VEHICLE BUYERS THIRD PARTY SITES 3.25 HR 6.5 HR DEALER SITES 2.25 HR 2.25 HR OEM SITES 2.75 HR 1 HR SEARCH 2 HR 1.5 HR MOST INFLUENTIAL SOURCES LEADING TO VEHICLE PURCHASE New & Used Vehicle Buyers both use the Internet to research car prices, compare makes & models, look at photos, and locate a vehicle. While Special Offers, Dealer Rebates and Incentives are important to Used Vehicle Buyers, they are significantly more important to New Vehicle Buyers, who rank it the third most important reason to shop online. In order to effectively target their marketing messages as well as ad spend, it is important that automotive marketers understand how and why consumers use the Internet during the vehicle shopping process. These insights can help ensure that dealers and manufacturers deliver the right marketing message and content to the right shoppers at the right time. 55% 45% 35% 5% 58% 25% 15% 5% 19% 16% 7% 5% 27% 18% NEW BUYERS USED BUYERS % INTERNET REFERRAL FROM FRIEND/FAMILY NEWSPAPER (Printed or online) ALL OTHER MEDIA SOURCES 211 NIADA USED CAR INDUSTRY REPORT 31

32 SECTION FOUR ROLE OF THE INTERNET in the New and Used Vehicle Purchase Process DO SEARCH AND SOCIAL NETWORKING SITES INFLUENCE VEHICLE BUYERS? According to the research, New & Used Vehicle Buyers are often using search engines like Google as a Yellow Pages type service a convenient way of getting to sites and businesses they are already aware of. For example, of the Used Vehicle Buyers who used search, the most common reasons they used it were to access a dealer s website, find a dealer s phone number and/or address, access a manufacturer s website, and to access thirdparty sites. USED VEHICLE BUYER SEARCH ENGINE USE ACCESS OEM SITE ACCESS A DEALER WEBSITE FIND DEALER PHONE NUMBER AND/OR ADDRESS ACCESS THIRD PARTY SITES OTHER/NE 41% 63% 51% 45% 16% SOCIAL NETWORKING SITE INFLUENCE ONLY 3% OF VEHICLE BUYERS SAID A SOCIAL NETWORKING SITE INFLUENCED THEIR PURCHASE. 97% Regarding social media, an overwhelming 97% of New & Used Vehicle Buyers stated that their most recent vehicle purchases were not influenced by social networking sites. Vehicle buyers typically do not go to Facebook to search inventory, for example. However, social networking can still be an important relationship and customer retention tool. It can provide an opportunity for automotive marketers to stay engaged with their customer base and even generate postpurchase revenue. ROLE OF THE INTERNET IN THE NEW AND USED VEHICLE PURCHASE PROCESS NIADA USED CAR INDUSTRY REPORT

33 Help get the right loan for each customer with Custom Finance * Chase offers fullspectrum financing to meet the needs of a diverse customer base. Our Custom Finance program places an emphasis on deal structure, enabling us to better match the right loan to the right customer. Flexible financing options to help you meet the needs of deserving borrowers with lessthanperfect credit Knowledgeable sales and credit team dedicated to your dealership Fast decisions and efficient funding Local presence with more than 42 business centers nationwide Plus, you can begin building customer loyalty and improving your bottom line when you help good customers establish better credit with Custom Finance. Call or visit chasedealer.com/custom to sign up with Custom Finance today. *Subject to credit approval by JPMorgan Chase Bank, N.A. Additional terms and conditions apply. 211 JPMorgan Chase Bank, N.A. Member FDIC. All rights reserved. (1115) 2/11

34 SECTION FIVE AUTOZONE/NIADA Parts and Service Analysis AUTOZONE/NIADA PARTS AND SERVICE ANALYSIS AUTOZONE/NIADA PARTS AND SERVICE ANALYSIS AU AUTOZONE/NIADA PARTS AND SERVICE ANALYSIS AUTOZONE/NIADA PARTS AND SERVICE ANALYSIS For the first time in our 16year history of the Used Car Industry Report, NIADA has teamed up with AutoZone to provide detailed auto parts and service data. Over the past year, many of our dealer members have successfully taken advantage of the great parts discounts and quick and free delivery that AutoZone offers through its National Corporate Partnership with NIADA. The following charts and data provide valuable insight into the auto parts business. In addition to parts discounts and free delivery through the AutoZone HotShot Delivery program, dealers have also recently found the ease of ordering AutoZone parts online. The chart at the bottom of this page shows a tremendous spike in online ordering over the first quarter of 211. The data on page 35 detailing the demographics of NIADA s TOP 1 Auto Parts buyer proves that these dealers are profiting heavily from auto parts and service, and they all have two common factors: they all have multiple service bays and have their own service technicians. Finally, the pie chart on page 36 details the most common categories of parts ordered by NIADA members, and shows the corresponding auto parts sales volume generated by NIADA members in each category. This parts breakdown gives the typical dealer a clear indication of the types of parts that can be easily purchased and delivered free of charge to maximize your service and aftermarket business percent yearly increase in AutoZone/NIADA parts sales volume in. PARTS SALES VOLUME The following chart represents the sales volume NIADA members have spent with AutoZone in &. In, TOTAL SALES VOLUME WAS AT $17,111,56, AN INCREASE OF 33.84% OVER. The data reinforces the success that AutoZone has had with their NIADA Partnership and suggests that more and more dealers are using parts, service and accessories as an additional profit center. 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, 92,128 1,148, ,468,839 vs Last Year AVERAGE WEEKLY SALES PER DEALER MEMBER CUSTOMER The following chart indicates that dealer member customers of AutoZone have been gradually increasing their weekly spend on AutoZone parts and accessories each month. As of the date of this analysis in February 211, NIADA dealer members spent an average of $258 per week on parts JAN FEB MAR APR MAY JUN JUL AUG SEP OCT V DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT V DEC % 1,16,83 1,264,75 1,551, % 1,79,697 1,474, % 1,52,972 1,436, % 967,799 1,358, % 1,19,842 1,47, % 1,136,57 1,513, % 1,98,63 1,568, % 1,121,965 1,54, % 1,185,443 1,488, % 1,19,853 1,418,924 ELECTRONIC ORDERING SALES BY MONTH Electronic Ordering of parts through the AutoZone portal has really taken off over the first three months of 211. Dealer Members are encouraged to order online for an even quicker free delivery of their part via AutoZone s Hot Shot Delivery Program, provided exclusively for NIADA Members. 12, 1, 8, 6, 4, 2, 23, ,742 vs Last Year % 1,74,852 1,462,948 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT V DEC 287.5% 539 3,74 79, % 19 45,848 12, % 97 35, % 4,441 42, % 7,456 53, % 9,22 6, % 1,878 64, % 14,94 69, % 21,196 71, % 16,299 73, % 17,665 77, NIADA USED CAR INDUSTRY REPORT

35 TOZONE/NIADA PARTS AND SERVICE ANALYSIS AUTOZONE/NIADA PARTS AND SERVICE ANALYSIS TOP 1 DEALER MEMBER PARTS VOLUME SALES The chart to the right details combined monthly sales volume from the TOP 1 NIADA Dealer Members who purchased parts with AutoZone in. Total parts purchases made by the TOP 1 dealers eclipsed $1,49,27. One can assume these Top 1 dealers have multiple service bays and do a majority of their parts, service and accessories work directly at the dealership. Below are the common demographic characteristics of these TOP 1 dealers to give you a comparison of their dealership operation to your own. Top Ten Dealer Member Parts Sales Volume: $1,49,27 16, 14, 12, 1, 8, 6, 4, 2, JAN FEB MAR APR MAY JUN JUL AUG SEP OCT V DEC DEMOGRAPHICS OF A TOP 1 AUTOZONE/NIADA PARTS BUYER Service Technicians All Top 1 AutoZone Parts Dealers have service technicians on staff, and 5% have at least 3 or more service technicians. Service Bays All Top 1 AutoZone Parts Dealers have service bays, and 6% have at least three or more service bays. Service Hours 7% of the Top 1 AutoZone Parts Dealers have their service departments open for business on Saturdays. 3% 1% 1% 7% Online Orders 5% of the Top 1 AutoZone Parts Dealers order their parts online. 5% 5% Average Weekly Parts Sales The Top 1 AutoZone Parts Dealers purchase an average of $2,883 worth of parts weekly. (percentage breakdown is a percentage of the Top 1 Dealers above) 6% 3% 3% 45% Purchase Frequency (Weekly Basis) The Top 1 AutoZone Parts Dealers place an average of 84 orders weekly. (percentage breakdown is a percentage of the Top 1 Dealers above) 6% 3% 1% 1% 1% 1% 15% 1% 1% $ $1,1 $2,1 $3,1 $4,1 $1, $2, $3, $4, $5, 5 orders 511 orders 1115 orders 1512 orders PARTS SALES BY STATE Below are the states with the highest overall sales volume in : Below are the states with the highest sales volume percentage increase from to : 1. TEXAS $2,343,16 2. GEORGIA $1,815, OHIO $1,434, RTH CAROLINA $1,49, ARIZONA $871,11 6. PENNSYLVANIA $734, FLORIDA $689, OKLAHOMA $689, ALABAMA $67, VIRGINIA $669,84 1. NEW YORK +693% 2. MARYLAND +321.% 3. NEBRASKA +153% 4. NEW JERSEY +114% 5. WASHINGTON +19% 6. WEST VIRGINIA +11% 7. IDAHO +74% 8. ILLIIS +71% 9. KANSAS +67% 1. MASSACHUSETTS +65% 211 NIADA USED CAR INDUSTRY REPORT 35

36 SECTION FIVE AUTOZONE/NIADA Parts and Service Analysis PARTS BY CATEGORY BREAKDOWN The pie chart below indicates the top Categories of parts purchased by NIADA Members in. The bar chart to the right indicates total dealer member expenditures by Category in. Below are the category descriptions for a more detailed description of each part included in that category. 3% OUTSIDE 4% BUYS MIR REPAIR 2% P&P $5,, 5% CHEMICALS 1% UNDERCAR 12% COMMODITY & SEASONAL 16% BRAKE SYSTEMS 25% STARTING & CHARGING 23% TUNE UP & FUEL $4,, $3,, $2,, $1,, $2,862,786 BRAKE SYSTEMS $887,221 CHEMICALS $2,93,97 COMMODITY & SEASONAL $771,421 MIR REPAIR $413,942 P&P $4,196,473 $3,918,76 STARTING & CHARGING TUNE UP & FUEL $1,757,654 UNDERCAR $555,26 OUTSIDE BUYS AUTOZONE/NIADA PARTS AND SERVICE ANALYSIS CATEGORY DESCRIPTIONS BRAKES: Rotors, pads, calipers, bearings and seals COMMODITY & SEASONAL: Antifreeze, A/C chemicals, filters CHEMICALS: Performance chemicals, wipers, wash and wax MIR REPAIR: Electrical, lighting, tire and wheel P&P: Accessories, truck and towing, covers and mats STARTING & CHARGING: Alternators, starters, batteries, cooling system TUNEUP & FUEL: A/C and heating, belts and hoses, fuel systems, engine management UNDERCAR: Chassis, drive train, exhaust, shocks and struts, steering OUTSIDE BUYS: Parts, accessories, chemicals, etc., which AutoZone does not regularly stock Almost half of all auto parts purchased by NIADA were classified in the Starting & Charging and TuneUp & Fuel categories. Batteries were the number one seller overall, with over $1,288,156 in NIADA member parts sales volume. Brake system parts, engine oil, and engine management and ignition parts were among the other highest volume sales items purchased by NIADA Members NIADA USED CAR INDUSTRY REPORT

37

38 SECTION SIX CARFAX/NIADA Independent Dealers and Vehicle History C A R F A X / NI A DA I N D EPEN D EN T D EA LERS A N D V EH ICLE HIS TOR Y CAR F AX/NIADA INDE PE NDE NT DE ALE R S AND VE HICL E H IST OR Y CARFAX/NIADA INDEPENDENT DEALERS AND VEHICLE HISTORY CARFAX/NIADA INDEPENDENT DEALERS AND VEHICLE HISTORY Build Consumer Confidence. Confident Consumers Buy Cars. Independent Dealers Sell More Cars. Here s a look at the average independent dealer s inventory.* This snapshot, based on joint research by NIADA and CARFAX, shows how vehicle history helps impact key areas of your used car business from acquisition to retail. ACQUISITION ADVERTISING RETAIL Know before you buy Build consumer confidence online Build confidence at the deal table 19% 15 of your vehicles listed online last month had a vehicle history report run prior to you buying them. fewer days online for your vehicles listed with a CARFAX Report shoppers wanted the history of cars in your inventory, but it wasn t available to them. vehicle you listed online had a branded title. 8 vehicles you listed online have an accident. 211 UCIR_211.indd 38 NIADA USED CAR vehicles listed online as of the 1st of the month had open recalls. of your inventory is CARFAX 1Owner. 136 times shoppers viewed CARFAX Reports for vehicles on your website and other sites such as cars.com and AutoTrader.com. * Analysis of online inventory, November April 211 Data April 211 Data 38 3 INDUSTRY REPORT OPN_MN Independent Dealers 211 CARFAX, Inc. All rights reserved. 5/25/11 3:28 PM

39 211 NIADA USED CAR INDUSTRY REPORT 39

40 SECTION SEVEN AUTO TRANSPORT Analysis USHIP AUTO TRANSPORT ANALYSIS USHIP AUTO TRANSPORT ANALYSIS USHIP AUTO TRANSPORT ANALYSIS AUTO TRANSPORT ANALYSIS AUTO TRANSPORT ANALYSIS For the first time this year, NIADA brings you vehicle transport data, courtesy of our National Member Benefit Partner uship. The following charts provide valuable insight into the transport logistics business, and will provide dealers a great reference to compare your current shipping distances and costs to these national averages. The charts included in this section were devised from combining all of the all auto shipment listings on uship in calendar year. The destination chart at the top indicates that shipped vehicles traveling to California, Washington and Oregon have by far the longest shipping distances to travel (of course other than the obvious in Hawaii and Alaska). Coinciding with the far West states, the far Northeast section of the country also had long destination shipping distances. The mileage and shipping costs chart indicates that 56 percent of all vehicles shipped have destination mileages of 1, or less miles. This chart also indicated that 22 percent of all auto shipment listings on UShip travel from 1,1,5 miles. Surprisingly 16 percent of all auto shipment listings on uship had mileage interval requests of 2,5 or more miles, but only 7 percent of actual shipments in this same mileage category. This would suggest that either dealers weren t wanting to pay the large costs associated with shipments of such a long distance, or that there aren t enough transport carriers in the marketplace that cater to these very high shipping distances. The last chart indicates a breakdown of auto shipments by the model year. It is no surprise that just over 7 percent of all autos shipped through uship are less than ten years old. For more information on auto transport through uship, visit SHIPPING DEMAND BREAKDOWN BASED UPON DESTINATION US REGION DESTINATION # OF AVG. LISTING LISTINGS AVG. SHIPMENT SHIPMENTS STATES DISTANCE % DISTANCE % ME, MA, RI, NH, VT 5 1,648 3% 1,245 3% VA, WV, PA, MD, DE, NY, CT, DC, NJ 9 1,273 18% 845 NC, SC, GA, TN, AL, MS 6 1,147 11% % FLORIDA 1 1,414 9% 1,132 9% MN, MI, IN, IL, KY, OH, WI 7 1,148 14% % NE, KS, MO, IA 4 1,66 4% 938 4% TX, OK, AR, LA 4 1,249 11% 1,18 12% NM, AZ 2 1,595 3% 1,39 3% ID, WY, MT, ND, SD 5 1,47 2% 1,272 2% WA, OR 2 1,993 5% 1,669 4% CALIFORNIA 1 1,94 12% 1,5 12% NV, UT, CO 3 1,495 4% 1,24 4% HI, AK 2 3,319 2% 3,618 % SHIPPING MILEAGE AND AVERAGE SHIPPING COST BREAKDOWN MILEAGE INTERVAL AVG. MATCH PRICE LISTINGS % SHIPMENTS USD$ % 25 MILES $ % 11% 2515 MILES $384. 1% 18% 5175 MILES $ % 14% 7511, MILES $ % 13% 1,11,5 MILES $ % 21% 1,512, MILES $ % 9% 2,12,5 MILES $1, % 7% 2,51+ MILES $1, % 7% LOCAL $ % % SHIPPING BREAKDOWN BASED UPON MODEL YEAR YEAR % OF LISTINGS % OF SHIPMENTS % 4.34% % 66.3% % 23.56% % 6.7% NIADA USED CAR INDUSTRY REPORT

41 DEALER EDUCATION 24/7 ONLY ON NIADA.TV Watch where you want......when you want Sales Operations F&I Remarketing Compliance Legal/Regulatory Special Features Industry Events PLUS: Automotive Industry News & Special Monthly Programs

42 SECTION EIGHT AUCTION PERSPECTIVES By Tom Webb of Manheim and Tom Kontos of Adesa AUCTION PERSPECTIVES AUCTION PERSPECTIVES AUCTION PERSPECTIVES AUCTION PERSPECTIVES MANHEIM AUCTION PERSPECTIVE by Tom Webb ADESA AUCTION PERSPECTIVE by Tom Kontos AUCTION PERSPECTIVES BY TOM WEBB OF MANHEIM AND TOM KONTOS OF ADESA NUMEROUS ECOMIC INDICATORS ARE POINTING TOWARD A POSITIVE 211 & 212 We began forecasting that the economic recovery would be an upwardslanted W more than 18 months ago, and that description remains valid. Recent events such as the Japanese earthquake and tsunami, Middle East unrest, European sovereign debt issues and domestic gas price spikes are clearly drags on the economy. However, numerous other economic indicators (most notably employment and new and used vehicle sales) are pointing positive for 211 and 212. We remain optimistic about economic progress this year and next, but recognize that there will be steps backwards along the way. The total number of vehicles remarketed via NAAAmember auctions declined for the third consecutive year in as a result of fewer repossessions, program vehicles and offlease units (the last of which will lose close to 3, units in both 211 and 212). Dealer consignment increased to 45 percent of auction volume in, up from 39 percent in and 42 percent in 28. Looking ahead, we anticipate auction volumes will increase as new and used vehicle sales rise and auctions employ operational efficiencies to provide new processes that support the changing needs of dealers It is hard to imagine how dealers would have coped with rising used vehicle demand and restricted used vehicle supplies without the services of the auction industry. The ability to search and buy both in live auction and Buy Now formats expanded used vehicle showrooms and helped make a just in time inventory model possible for dealers struggling to find used inventory. Tight supply has driven used prices up, and many dealers who in the past may have bought from auctions by the truckload are turning to online channels to buy only what they need right away. More than 2 percent of all Manheim volume was sold online in. Manheim features more than 1, vehicles available for preview (more than 25, of which are available for sale) at any time via its online channels. Mobile is the next frontier for dealers and auctions, with apps becoming the norm and buying, selling and other auction services becoming more common via mobile devices. In recent years, we have seen improved inspection reliability enhance buyer confidence (particularly online) and operational efficiencies decrease days to sale. Auction process investments are paying off for both buyers and sellers. As a result, the auction industry is in a strong position to take advantage of the economic rebound. Although the economic recovery has been and will continue to be uneven, the upwardslanted W suggests more positive than negative. We encourage a job market focus on the doughnut (employment) rather than the hole (unemployment), as it is the employed who purchase new and used vehicles. Even modest job growth boosts customer confidence, which in turn drives more retail sales. The availability of retail financing improved consistently throughout and the first part of 211. So too, has wholesale inventory financing for used vehicle dealers. We don t expect either trend to reverse over the next year. Gas prices and international affairs will remain key variables impacting retail spending, but most data and forecasting suggest that the economic rebound should continue throughout 211 and into 212 although not as steadily or as quickly as many would like. Tom Webb is chief economist for Manheim Consulting. For more indepth and ongoing industry updates, visit the Manheim Consulting blog at www. manheimconsulting.typepad.com or follow Tom on Twitter at TomWebb_Manheim. INDEPENDENT DEALERS ENJOYING ENCOURAGING GROWTH IN THEIR RETAIL USED VEHICLE SALES! Throughout much of, the choppy nature of the economic recovery appeared to be generating more uncertainty than confidence. As a result, fears of a doubledip recession were prevalent. At this juncture, however, most of the economic indicators we track are tilted towards the positive and a return to recessionary conditions appears to have been averted. GDP growth rates accelerated from the second through the fourth quarter. The unemployment rate dropped considerably in through the addition of nearly one million jobs. Manufacturing continued to expand and has resulted in increased exports. Consumer and business spending grew at a solid clip. To be sure, the housing market remains depressed and fuel prices are on the rise, but the former is to be expected to correct for past excesses and the latter is a reflection of an improving global economy. New vehicle sales began a rebound that can be expected to continue in 211. Independent dealers enjoyed encouraging growth in their retail used vehicle sales after several years of declines. A more rightsized automotive industry has encouraged inventory and incentive discipline that benefits new vehicle resale values and sales. In addition to the growth in tradein volume fostered by rising new vehicle sales, the past year also saw more lease originations and rental and commercial fleet sales, all of which could eventually help relieve the current tight vehicle supplies. Wholesale used vehicle prices reached record levels in April and rose by almost four percent for the year. Although yearoveryear price growth appears to be diminishing, prices are expected to follow typical seasonal patterns. The Canadian economy saw a bit of a slowdown in its recovery as progressed, but to some degree this was expected as a result of a cooling housing market. Nevertheless, Canada appears to have avoided the need for the degree of correction in its housing market that was required in the U.S. and should enjoy faster growth rates as its exports improve, including those to the U.S. Wholesale used vehicle prices in Canada have risen as supplies have tightened, creating market conditions similar to those in the U.S. Class 8 truck sales were up during all of. Most classes of mediumduty truck sales were also up for the year. Growth in truck sales and truck tonnage are good coincident indicators, reflecting the improving economy. The percentage of insurance claims that are declared total losses remains high. Miles driven will likely increase as the economic recovery continues. Salvage recovery values are benefiting from the strong wholesale used vehicle market NIADA USED CAR INDUSTRY REPORT

43 WE SPEAK DEALER FLUENTLY Whether you re a buyer or a seller, we speak your language. We know that it s all about service before, during and after the sale. And our dedicated, experienced staff is ready to assist in every way. Contact the Dealer Sales and Services team at your local ADESA auction, or visit us online at ADESA.com/sell. 211 ADESA, INC.

44 SECTION NINE THE EFFECTIVE USE OF GPS in the Industry THE EFFECTIVE USE OF GPS IN THE INDUSTRY THE EFFECTIVE USE OF GPS IN THE INDUSTRY THE EFFECTIVE USE OF GPS IN THE INDUSTRY THE EFFECTIVE USE OF GPS IN THE INDUSTRY The following data regarding dealer use and opinions of GPS and their effects on reduction of delinquency are detailed in this section. This brand new data is the result of a survey collected by Ken Shilson of The National Alliance of Buy Here, Pay Here Dealers (NABD) and was just released at the 211 NABD Conference in May 211. The data was collected from a survey of dealers in 3 states, and these dealers collectively have over 15, GPS/Starter Interrupt units deployed nationwide. The dealers surveyed had very high regard and very positive and strong opinions about the effective use of GPS devices, as showcased in the very first chart. The second set of charts show the number of devices in use per dealer, and the length of time that dealers have been using GPS. It is assumed that those dealers who have been using GPS for 7+ years were mostly using starter interrupt devices prior to using the newer GPS technology. The final set of pie charts and graphs at the bottom show the dealer s cost savings with the use of GPS devices. It is clear from the survey that the decrease in the amount of delinquencies using GPS proves the high effectiveness of such devices. GPS devices more significantly reduce default rates, according to our study, but don t seem to affect customer repayment behavior like CBS systems. GPS devices reduce bad debt losses by improving recoveries and reducing recovery costs. GPS devices also deter customers from walking away from the deal, Shilson indicated. However, GPS technology is newer in usage to the industry so more data is needed to fully measure its impact on collections and recoveries. NABD also found that operators activate these devices differently in their application which impacts results. In summary, GPS devices seem to increase recoveries more than they impact delinquencies, Shilson explained. Special thanks to STARS GPS, NIADA s exclusive National Corporate Partner of GPS Devices, for gathering and summarizing this data for our report. For more information about STARS GPS, and to get started using GPS devices in your dealership, visit DEALER FACTS/OPINIONS TOWARD GPS DEVICES 9% 85% 8% 75% 7% 87% CUSTOMER RESPONSE TO PAYMENT REMINDER DEALERS WITH DEVICES IN USE 6% 59% 3% 5% 25% 3% 29% 15% 1% 1% 5% 6% 5% % % 5 5 2, COST SAVINGS WITH THE USE OF GPS CAN T MEASURE OVER $75 $51 $75 8% DISABLE FEATURE AS A PROACTIVE TOOL 2, 5, < $3 $31 $5 5,+ 77% REDUCES THE NUMBER OF COLLECTORS NEEDED 5% 3% 1% % I WOULD DECIDE AGAIN TO INSTALL THEM ON ALL VEHICLES I SELL 28% 2 YEARS 22% < 5% 78% 29% 24 YEARS 13% 51% I WOULD RECOMMEND THESE DEVICES TO OTHER OPERATORS 27% 57 YEARS 88% DEALERS LENGTH OF TIME USING GPS/STARTER INTERRUPT GPS REDUCTION IN AVERAGE DELINQUENCIES 18% 7+ YEARS 41% > 1% NIADA USED CAR INDUSTRY REPORT

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46 NEW NIADA MOBILE SERVICE FOR SMART PHONES PUTS KEY APPRAISAL DATA, MEMBER NEWS AT YOUR FINGERTIPS BY SCOTT LILJA, VICE PRESIDENT, NIADA MEMBER SERVICES This spring, NIADA members will have access to a new mobile application tool from NIADA that will enhance their productivity and profitability and stay up to date on the latest developments impacting their dealership. This new tool, NIADA Mobile Service, is accessible by Apple iphones, Androidtype phones and other select models. It puts at members fingertips a wealth of critical data to help them make better vehicle appraisal, purchase and retail sales decisions. Now, members can access their subscriptions to appraisal services from NADA Guidebook, Kelley Blue Book, Black Book, and Galves Auto Price List. They also will access run lists from participating auctions. Furthermore, NIADA Mobile Service links them by smart phone to select content on NIADA.com. Here s how NIADA Mobile Service will streamline your operations: On the lot or on line: More quickly appraise a vehicle, for customers at your lot or those selling online through sites such as Craigslist. Access your guide book vehicle appraisal service or a market report or your subscription vehicle history report service on the specific unit. Have at your fingertips the right current facts to pencil your best deal. Buying from auction: You can access the auction s presale run list while at the auction or sitting in your office. You may view the inventory then, once you land on a unit you like, press on the appropriate smart phone icons to pop up auctionsupplied information about the unit, its appraisal data, and a vehicle history report. Continual and timely updates ensure you have the freshest available data. During a moment of downtime: Activity suddenly slows its hectic pace for a few minutes, so you use the time to access the NIADA website. There you check some key association information or watch a NIADA.TV video you d put off. The service also alerts you to urgent messages that might require immediate action. Designed for NIADA NIADA Mobile Service was developed by leading automotive mobile applications developer and NIADA technology partner and advisor GigglePop.com Inc. The company is importing NIADA web content and coupling it with existing GigglePop software mobile applications. GigglePop s technology is known for speed, accuracy and, of course, mobility. Its fatfinger icon or button designs are a special value when searching for key information when working in distracting environments like auctions. These large icon designs help users easily find and stroke with their fingers the right icons or buttons they want, reducing keystroking errors. As NIADA s technical partner, GigglePop will continue to support Mobile Service and be an industry liaison for NIADA Mobile. Accessible subscription guidebook data and features through Mobile Service include: s Customizable software settings s All guidebook regions or states include s VIN lookup decoder s Stores booked vehicles, recall in an instant s Enter personal notes on booked vehicles s Lists and sorts appraised vehicles s Revalues saved vehicles with each new update s Automatically updates wirelessly s Barcode scanning capability s Seamless integration with all GigglePop valuation tools, including vehicle history report subscription services and auction run lists s SmartBid Market Report s Large easytoread fonts NIADA Mobile Service also makes your day at the auction simple, easy and productive. Accessible auction run list data from participating auctions includes: s Search by lane or run number to view auction vehicle data s Barcode scanning capability s Continual auction run list updates even while auction is in progress s View those late arrivals s Save target vehicle data for future reference s Enter personal notes and bid pricing on specific vehicle records s Lists and sorts saved target vehicles s Seamless integration with all GigglePop valuation tools, including Guide Books, Vehicle History and participating Market Reports In addition to providing mobile access to these key services, NIADA Mobile Service also connects members to select NIADA content on the NIADA site. Wherever you are, you can stay on top of moving legislative decisions, regulatory compliance issues, new NIADA member services and educational programs. Especially in today s market, still recovering from the recession, this mobile service will help members operate more profitably. It puts at hand the insight needed to buy and sell more profitably and keep abreast of industry news and events influencing the used vehicle retail market. The more competitive dealers today are clearly adapting to our changing industry by using mobile technologies and solutions to help them better manage their used vehicle operations, inventories, vehicle sourcing and retail sales processes. DELIVERS TANGIBLE MEMBER BENEFITS Members use of the NIADA Mobile Service tool will help them: s Identify quality, retailready inventory: Mobile accessibility to auction inventory as well as vehicle valuation guides can help dealers meet challenges presented by the economic fallout from the last three years depressed vehicle sales, drop in leasing activity and reduced stream of fleet rentals into the remarketing stream. s Source the rightpriced vehicle for the customer: Reduced levels of wholesale units flowing into remarketing channels have made it more difficult to source and match the right vehicle to customers ability to pay. NIADA Mobile Service helps dealers locate those vehicles at an acquisition price the customer can afford and finance, while providing enhanced profit for the dealer. Often spread thin by needing to be in the office, on the lot and at the auction seemingly simultaneously, the independent used auto dealer must use time and resources wisely. By adding this new Mobile Service tool to the NIADA portfolio of member services, the association helps its members access critical association information and related vehicle valuation, history reports and auction run list services right from their smart phone. As market needs continue to change and dealers seek new ways to remain competitive, like purchasing inventory outside their local market areas and using webbased competitive vehicle analysis and pricing tools, GigglePop and NIADA will continue to enhance Mobile Service to help dealers make the most informed and profitable business decisions NIADA USED CAR INDUSTRY REPORT

47 the NEXT generation of NIADA try NIADA S new MOBILE APP ACCESS GUIDEBOOK VEHICLE APPRAISAL SERVICES GET INSTANT VEHICLE HISTORY REPORTS ACCESS AUCTION PRE SALE RUN LISTS NATIONWIDE STAY INFORMED WITH NIADA EVENTS & PROGRAMS Get Started with NIADA s Mobile App Today! For Details & Instructions Visit: or Call 1855MYNIADA ( )

48 SECTION TEN NIADA MEMBERSHIP SURVEY NIADA NEEDS YOUR DATA!!! SO HELP US HELP YOU!!! YOU VE W REACHED THE BACK OF THIS REPORT, MEANING YOU JUST CAN T GET EUGH DATA. If you are like most of our dealer members, this data is extremely important in comparing your dealership to nationwide industry standards. Please assist us in providing the most comprehensive and accurate dealership statistics by taking just five minutes to complete and fax back this NIADA Membership Survey to FREE NADA GUIDEBOOK SUBSCRIPTION OR NIADA ACCOUNTING MANUALS The NIADA membership data is based on results from this survey. Your dealership demographic is important to us. We use the results from this survey to gather statistics for the NIADA Used Car IndustryReport. The results will allow us to show trends in the industry over the past few years. YOUR EFFORTS WILL T GO UNTICED. BY COMPLETING THIS SURVEY, YOUR NAME WILL BE ENTERED INTO A DRAWING TO RECEIVE ONE OF THESE ITEMS FOR FREE NADA GUIDEBOOK SUBSCRIPTION (1 year, $9 value) OR NIADA STANDARDIZED ACCOUNTING MANUALS on CD ($125 value) Please assist us in providing the most comprehensive and accurate dealership statistics by taking just five minutes to complete and fax back this NIADA Membership Survey to All surveys must be completed and mailed or faxed back to us by December 31, 211 to be eligible for the drawing. The survey can also be filled out online at. BY COMPLETING THIS SURVEY, YOU ALSO AUTOMATICALLY QUALIFY FOR A DRAWING FOR NIADA MEMBERSHIP SURVEY TWO COMPLIMENTARY REGISTRATIONS TO THE 212 NIADA CONVENTION & EXPO, TO BE HELD AT THE CAESARS PALACE IN LAS VEGAS, NEVADA ON JUNE 1721, NIADA USED CAR INDUSTRY REPORT

49 DEALER MEMBER QUESTIONNAIRE 212 This survey is being used to gather statistical information from NIADA dealers for our 212 Annual Used Car Industry Report. Please take a moment to complete the information in this questionnaire and fax to us at This information is proprietary and will not be seen by anyone outside of NIADA. Thank You. Dealer name Company name address* City & state * Certain NIADA Member Benefits are delivered via and by providing your address, you are consenting to and giving NIADA, it's subsidiaries and affiliates, your permission to contact you at this address. 1. What is the nature of your business? (check all that apply) Retail BHPH Wholesale Rental Leasing Service Dept Parts Dept Body Shop Other 2. How long has your business been in operation? 3. How many vehicles do you sell per year? Retail: Wholesale: 4. What is the monthly average total number of vehicles in your inventory? 5. What type of vehicles do you sell? (check all that apply) Cars Trucks Heavyduty vehicles Power Sports vehicles RV s 6. What is the average retail price of most of the vehicles you sell? 7. How many employees do you have (including yourself)? 8. Which of the following mediums, do you spend your advertising dollars? (check all that apply) TV Newspaper Radio Magazines Specialty pubs Online Other 9. What percentage of your retail sales are to women buyers? 1. Do you have a website for your dealership? Yes No 11. How do you use internet access at your dealership? (check all that apply) Dealership Website /Communication Industry Research NIADA.TV Online Buying/Selling Online Auctions Online Financing Other 12. How do you finance/floorplan your inventory? Banks Auction floorplanning Cash Other 13. How do you finance vehicles for your customers? BHPH Finance companies Banks Other 14. How old are most of the vehicles you sell? 12 yrs old 35 yrs old More than 6yrs old 15. Where do you buy your vehicles? (check all that apply) Wholesale auctions Other dealers Online Other 16. How do you wholesale your vehicles? Wholesale auctions Other dealers Online Other 17. How often does your dealership attend auctions per month? None 14 times per 57 times 8 or more times 18. Do you have multiple locations? Yes No If yes, how many locations? 19. If you have a body shop, parts and/or service dept. on site, how many service bays do you operate? 2. Do you have a rental car operation? Yes No If yes, please check: Franchise or Independent 21. What is the square footage of your dealership? Up to 1, 1,1 25, 25,1 5, 5, Do you sell warranties and/or service contracts? Yes No If yes, how many on average do you sell per month? 23. Do you have outside lighting? Yes No 24. Do you have outside fencing? Yes No 25. Do you have a paved lot? Yes No 26. Is 1% of your inventory insured? Yes No 27. Do you have an indoor showroom? Yes No 28. Do you use payment protection devices? Yes No 29. Do you have a separate F&I department? Yes No 3. Do you sell aftermarket products to customers? Yes No 31. Do you do your own reconditioning and detailing work? Yes No 32. Do you carry workers compensation? Yes No 33. Do you carry commercial insurance on your building? Yes No THANK YOU! ucd Your efforts will not go unnoticed By filling out this survey and returning it to us by February 29, 212, your name will be entered into a drawing to receive one of these items, FREE! NADA Guidebook Subscription 1Yr ($9. value) NIADA s Standardized Accounting Manuals on CD ($125. value) Mail to: NIADA, 2521 Brown Blvd., Arlington, TX 766 Fax to: NIADA USED CAR INDUSTRY REPORT 49

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52 THERE S WAY I COULD REACH THE CUSTOMERS I DO WITHOUT AUTOTRADER.COM. THEY PUT US ON THE MAP. Joe Mallette Owner American Auto Brokers San Antonio, TX Jeff Ravlin Advertising Consultant AutoTrader.com When it comes to shoppers, our net casts far and wide, and there is no way I could reach those customers without AutoTrader.com. With their Premium listings, and most recently, video, we have seen a tremendous spike in business. Bottom line is without AutoTrader.com, we would struggle. To hear Joe s inspiring story, visit WeWorkForYou.com/Joe. 211 AutoTrader.com, Inc. All Rights Reserved. AutoTrader.com is a registered trademark of TPI Holdings, Inc. used under exclusive license.