Guidelines. NADA Used Car Guide Industry Update. NADA Official Used Car Guide Update. January 2012 IN THIS ISSUE:

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1 Guidelines January 2012 NADA Used Car Guide Industry Update IN THIS ISSUE: NADA Official Used Car Guide Update ATD/NADA Official Commercial Truck Guide Update NADA Returning Used Supply Forecasts Retail Market Indicators Fuel Prices Economic Drivers NADAguides.com Consumer Site Trends AuctionNet Wholesale Market Trends Guidebook Value Trends At NADA Used Car Guide NADA Official Used Car Guide Update For this month s edition of Guidelines we re going to change course a bit from our normal structure so we can provide a broad recap and a bit of insight on the past year and touch on how we believe things will play out in It seems like each year brings its share of unexpected events and challenges, but 2011, like 2001 and 2008, stands apart. Clearly the devastating impact of the Japanese earthquake was the biggest industry story last year, with the event not only leaving an indelible impact on global auto sales, but also on how automotive manufacturers do business. The resulting disruptions to production led to inventory shortages, incentive reductions, and while economic concerns and low consumer confidence certainly played a role, lost new vehicle sales. Ultimately though we ended the year on high note as new sales grew by more than 10% to continue the recovery began in Speaking of economic concerns, used vehicles remained an attractive alternative to new for fiscally-wary consumers. A new price ceiling raised by lower incentives and lean inventory, along with this accentuated demand and a progressive erosion in supply, pushed used vehicle values to historically high levels last year. This was especially true for small cars whose frugality was much sought after as fuel prices roared past $3.50 for the first time since With all of this being said, let s jump into our concentrated review of industry performance over the past twelve months, and take a glimpse at what the coming year may have in store for us. NEW VEHICLE SALES December s new vehicle sales performance closed the book on yet another turbulent year for the industry, but challenges aside, the year s results left the depths of 2009 farther in the distance. Total light vehicle sales in December increased by 9% on an annual basis to reach 1.24M units. As a result, full year sales landed at 12.7M units which translated to a 10.2% increase over 2010 s tally of 11.6M. In addition, the month s SAAR of 13.5M units marked the fourth month in a row that the thirteen million unit threshold was breached. For the year, light trucks picked up another point to once again outsell cars by a score of 52% to 48%. 1

2 Official Used Car Guide Update (continued ) Top performers for the year in terms of growth included Kia (36%), Chrysler/Jeep (31%), and Volkswagen (26%), with each brand benefitting from an infusion of new product and enticing year-end incentives. Somewhat overshadowed by its larger counterparts, Mitsubishi s sales growth of 42% actually led all other non-luxury brands; however, the brand received considerable help from sales of its mid-size Galant sedan to rental fleets (on average, one out of every two Galant sales through October were to rental fleets). Sales at Hyundai grew by 20% to exceed 600k units for the first time since the brand starting doing business in the U.S. To put this achievement into perspective, Hyundai s sales came in only 55k units shy of Dodge s, and only six other brands sold more vehicles in the U.S. last year. Speaking of Dodge, sales grew by 19%, while sales for Ford and Chevrolet grew by 17% and 14% respectively. Each brand s performance was fueled in large part by well received new product (Dodge Durango, Ford Explorer, Chevy Cruze), as well as by strong demand for compact CUVs. With production stymied for a significant portion of the year to due to the disaster in Japan and massive flooding in Thailand, Honda (-7%) and Toyota (-6%) were the only two non-luxury automakers to have sales regress last year. By taking each brand s forecasted market share at the beginning of the year and applying it to actual sales, we can estimate that combined the two lost ~300,000 sales over the course of the year. After a tight year long fight, BMW was able to fend off hard-charging Mercedes to narrowly win the luxury sales crown. December sales for the brand from Bavaria rose just enough (15%) for it to capture a 2,700 unit win over its rival from Stuttgart. This being said, Mercedes recorded impressive growth of 47% and 28% over the last two months of the year, which are results that foreshadow yet another tight race in BMW s win was set up in large part by Lexus production woes. The perennial luxury champ saw sales fall by -13% to fewer than 200k units, which was the largest drop recorded by any luxury brand. Acura and Infiniti also saw sales decline for similar reasons, by -8% and -5% respectively. With growth of 25%, Volvo topped all luxury brands in terms of annual improvement due to a very well received redesign of the S60 sedan. In fact, the design was so embraced that the S60 s 31% share of total Volvo sales dwarfed the share of all other models. Sales growth for Land Rover and Audi came in just behind Volvo at 20% and 16%, which were results that helped both brands to gain one point of luxury share (3% and 8%). The year-end flourish has most prognosticators optimistic that new vehicle sales will continue to recover over the course of this year. Paul Taylor, NADA s Chief Economist, predicts that new vehicle sales will rise by 9% to 13.9M units this year, while December s Blue Chip consensus forecast pegs sales at 13.7M. Irrespective as to where things ultimately end up, a few things are clear. New product, alluring design, and fuel efficiency translate into sales success without the need of heavy incentives. Hyundai and Kia epitomize this perfectly. In addition, there are very few subpar models being built these days which speaks to the increased parity and competitiveness of the industry. 2

3 Official Used Car Guide Update (continued ) As an outcome, manufacturers will have to fight harder to maintain and grow share, but in the process consumers will benefit from a wider selection of appealing, reliable, and technologically advanced vehicles. NEW VEHICLE SUPPLY Manufacturer efforts to maintain a balanced supply of new vehicles last year were challenged by natural disasters and volatile demand. As a result, the average days supply for the year dropped to 55 days which is the lowest level seen since at least In terms of last month, December s strong showing removed ten days worth of inventory to bring the overall days supply down to 51. Out of 29 brands, only 11 started out the New Year with supply at or above the industry ideal of 60. Of mainstream OEMs, Japanese and Korean brands had the leanest supply with Subaru topping the list on an industry-low 18 days of inventory. Following behind were Hyundai and Kia at 28 days apiece, and Honda and Toyota rounded out the leanest five brands at 36 and 38 days respectively. Despite finally reaching full production capacity, clearly the latter two brands still have some work to do to achieve an adequate level of inventory. One the domestic front, Chrysler/Jeep supply dropped by -9 days to reach 58, while Ford and Chevy both saw drops in the double -digits due to the removal of a significant portion of their pickup truck inventory. In Ford s case, F150 supply dropped by -24 days, while Chevy Silverado supply dropped by -33. Supply for the brands ended up at 59 and 66 days respectively. Luxury brand supply ranged between Lexus 24 days and the now defunct Saab s 221 days. Excluding Saab, mean days supply for luxury brands ended the month at 47. The amount of inventory removed in December is certainly not unusual considering aggressive year-end promotions. In fact, the month s -16% drop in supply was an improvement over the -18% we ve seen on average over the past decade. What is unusual is how lean inventory continues to be. The current state of supply and reasonable manufacturer production plans for the first quarter should translate into a continuation of healthy new vehicle transaction prices. This will keep the threat of downward pressure to used prices to a minimum. INCENTIVES As a by-product of building to demand and the loss of inventory resulting from the natural disasters in Japan, overall incentive spending declined by -7% relative to 2010 to average $2526. This is the lowest level of total incentive spending seen in nearly a decade. 3

4 Official Used Car Guide Update (continued ) Across the major incentive types, manufacturers reduced the amount of customer cash placed directly on the hood by -16% while they increased lease subvention by 16%. We can surmise a couple of things from this. First, manufacturers understand that relative to other forms of incentive spending, direct customer cash is the most detrimental to used value retention and residuals. Second, the current strength in used vehicle values and a generally favorable outlook for values over the next few years has reduced OEM concerns regarding leasing and end-of-term residual losses. It bears noting here that on average, lease penetration is back to a pre-recession level of 15% of total new vehicle sales. This compares to 10% and 14% for 2009 and 2010 respectively. Although incentives are projected to increase in 2012 as Japanese manufacturers look to regain share lost in 2011, they will most likely be in the form of subsidized financing and leasing rather than the more used value corrosive customer cash. FUEL PRICES After a recession-fed two year depression, improving economic growth and wide-spread turmoil in the Middle East and North Africa conspired to push average fuel prices to the highest levels ever recorded last year (both nominally and adjusted for inflation). The average price of regular grade gasoline reached $3.53 per gallon last year, which was a $.75 increase over 2010 s figure of $2.78 and $1.18 greater than 2009 s average of $ was even higher than 2008, which was the year that prices spiked to over $4 per gallon in the summer. As with gasoline, diesel fuel prices also increased substantially in 2011, although demand in emerging economies saw diesel price growth outpace that of gasoline by a score of 29% to 27%. All told, the average price of on-highway diesel fuel reached $3.85, which was $.86 greater than 2010 s average of $2.99 per gallon. As it relates to 2012, the Energy Information Administration is forecasting that continued economic growth, primarily in emerging markets, will push global crude oil consumption in 2012 up by 2% relative to last year. Here in the U.S., the EIA expects that U.S. liquid fuels consumption which includes motor gasoline will increase by.6%. In terms of U.S. fuel prices, the EIA is projecting that the average price of regular grade gasoline will fall by $.08 to $3.45 per gallon this year. As is the seasonal norm, gas prices are expected to peak at $3.51 per gallon in the second quarter. On-highway diesel prices are projected to remain flat at $3.85 per gallon. 4

5 Official Used Car Guide Update (continued ) Given the volatile nature of energy prices, the EIA makes a point of acknowledging the uncertainty surrounding stated projections and they note that supply growth in non-opec countries along with additional OPEC inventory withdrawals or production most likely in the form of increased Libyan crude production will need to be realized in order for their 2012 fuel price estimates to be met. Another upside risk includes elevated turbulence in the Middle East, most notably in Syria, Yemen, the Sudan, and more recently, Iran. Conversely, slower than anticipated economic growth or a worsening of the European debt crisis could see average prices below the EIA s projections. Regardless as to where fuel prices end up, a return to sub-$3 per gallon gasoline seems highly unlikely. DEMAND Over the past year, certain demand series did a fairly good job of indicating actual consumer purchase behavior, and as one would expect based on last year s sales growth, new and used vehicle demand indicators as a collective continue to be directionally positive. Starting with the Conference Board s Plans to Buy surveys meant to measure the percentage of consumers planning to purchase a new or used vehicle within six months the number of respondents in both the new and used surveys improved by.4 and.2 percentage points respectively over 2010 s averages. CNW s measurement of floor traffic returned even stronger results, with new vehicle floor traffic improving by 4.9 points and used vehicle traffic improving by 12.8 points. Results from Federal Reserve Board s Senior Loan Officer Survey also reflected improving demand as the percentage of respondents reporting stronger demand for auto loans steadily gained ground throughout the course of the year. Positive annual results aside, the latest readings for both Plans to Buy and Floor Traffic were down slightly on a sequential basis, especially for used vehicles (the Conference Board s used survey has declined by -1.8 points since October). This said, the downward turn on the used side is a recent one that is likely attributable to a shifting of some demand over to the new vehicle market as consumers originally in the market for a late-model used vehicle decided to purchase new because of attractive year-end deals. In addition, both of the cited indicators remain well below their pre-recession levels and the return of consumer confidence (up sequentially by 9.4 points to 64.5 in December) to a level last seen in April of last year gives little indication that auto demand is going to take a precipitous slide back near-term. The advanced average age of vehicles on the road currently at 10.8 years will also mean that a growing number of consumers will be in the market to replace their current vehicle, not simply because they want to, but because they feel compelled to. Given these factors along with other macro-economic forecasts for the year, we expect to see continued albeit gradual demand growth over the coming months, especially as it relates to new vehicles. 5

6 Official Used Car Guide Update (continued ) USED SUPPLY In the past, we among others have made frequent mention of the decline in used vehicle supply, and how this is a natural byproduct of the precipitous drop-off in new vehicle sales witnessed since Looking back over 2011, NADA estimates that total used supply dropped by -5% relative to the prior year, and that off-lease supply declined by a more significant -17%. Personal supply, or the supply of vehicles originally carrying a retail registration, returning to the secondary market declined by - 5% last year. The replenishment of rental fleets in 2010 following a prolonged holding period dictated by the economy and OEM restructurings resulted in a 4% increase in the number of off-rental units added to the used supply pool in Over the course of 2012 we re estimating that used supply will deteriorate by an additional -7% and that fleet and retail supply will slide by -6% a piece. Off-lease supply, the cornerstone of manufacturer CPO programs and those vehicles most likely to be considered as a new substitute, will plummet by an additional - 22%. At a segment level, less than a half dozen all either compact utility or subcompact segments will see an uptick in supply this year. This should provide some relief for dealers given fuel price expectations. This said, used supply will continue to retreat for the twenty remaining NADA segments and over half predominantly trucks and large cars will experience supply losses in the double-digits. Considering the additional decline in used supply and demand expectations for this year especially for late-model certified units a diverse acquisition strategy will be a necessity for dealers to remain competitive, and even the smallest of dealers will have to augment traditional auction and trade-in channels with upstream wholesale ones such as Manheim s OVE and SmartAuction. In addition, dealers will have to continually explore exchanges with fellow dealers, remain aggressive in trade offers to consumers, and acquire older vehicles normally eschewed. 6

7 Official Used Car Guide Update (continued ) AUCTION ACTIVITY Last year capped off another remarkable year of AuctionNet wholesale price growth. When we look at data on a mileage and mix adjusted basis which allows us an apples-to-apples view of prices where underlying swings in age, MSRP, and mileage are mitigated prices for vehicles up to five years in age grew by 12% on a year-over-year basis in the May/June time period before settling down in December to end the year up by a healthy 4%. Relative to November, every vehicle class experienced an increase in price, with vans leading the pack at nearly 2.5%. Prices for all other classes advanced right around 1%. As has been the case for the majority of the year, annual car price appreciation was second to none in December, as prices finished the month 6% higher than they were the previous year. Likewise, van prices also finished out the year strongly by notching a 5% annual improvement, while utilities and pickups closed out the year with increases of 3% and 2% respectively. At the model year level which is a view that provides insight into price performance as vehicles age and accrue mileage (although we are still adjusting for MSRP changes) December s rate of depreciation continued the moderating trend began in November. As is seasonally appropriate, this was most true for truck and utility segments (large SUVs, pickups, mid-size utilities) where the average rate of decline was less than half of a percent. In fact, wholesale prices actually increased for later model year large SUVs which is a reflection of not only the season, but also the scarcity of supply. After rising and then falling in dramatic fashion, the downward pitch of compact and mid-size car prices eased to an average rate of -1.6% in December. Mid-size van prices fell by -1.5% last month, which was a bit more than the -1% drop experienced in November. Although prices retracted more than other segments at -2.5%, luxury vehicle depreciation was still better than what is normally expected at this time of year, which is a statement that applies to all segments. While used supply has been trending down in general, the supply at auction has been off to an even larger extent because more vehicles are being sold in an upstream channel (e.g. grounding dealer, internet auctions, etc.). In fact, the total number of vehicles up to five years old sold at auction declined by -23% last year, which is five points greater than the volume decay witnessed the year before. Compare this to the general reduction in used supply of -5% and it s easy to see why bidding over the past year has been particularly ferocious. Considering this and December s atypically strong showing, dealers should expect another highly competitive auction environment in

8 Official Used Car Guide Update (continued ) OFFICIAL USED CAR GUIDE DATA A culmination of the factors cited throughout our review new vehicle price growth, strong consumer demand, and a continued reduction in used supply combined to push NADA Official Used Car Guide values to unprecedented heights in Here are a few examples to illustrate this: The average value of a 3 year old model increased by 5% relative to The fuel efficient compact car segment, which includes models such as the Ford Focus and Honda Fit, led all other segments with a 15% year-over-year increase. Looking across other segments, performance waned as fuel efficiency deteriorated. The average value for three year old mid-size vans and cars increased by 9 and 8%, respectively, while values for large pickups increased by just 1%. Although large SUV values fell by -2%, the result most likely would have been worse had it not been for the -15% erosion in used supply witnessed over the course of the year. It s also worth noting that only 25% of all 2009MY models depreciated more than -10.5% since last January; the number depreciating more than -10.5% over the course of 2007 was closer to 55%. Price improvements are not only a result of fundamental market drivers, but also reflect the strength and quality of product brought to the market (e.g. Hyundai Sonata, Ford Focus, Jeep Grand Cherokee). January s edition of the Guide reflects recent market trends as well as our expectations that the rate of depreciation will continue to be slower than it has been at any other time in recent memory. As a result, we anticipate that improvements in used vehicle retention will be sustained over the coming months. Given our outlook on the market, value adjustments for January s edition were mild, especially by recent standards. Relative to December, half of all NADA segments had average value adjustments ranging from -1% to.1%, while reductions for the other half did not exceed -2.3%. Generally speaking, trucks and utility values changed very little one way or the other, while car values primarily higher dollar models experienced the more aggressive downward adjustments. While we ve provided some insight into the coming year throughout our review, there are still clearly many outstanding questions including an outlook for used vehicle prices. Will prices continue to rise or have they reached a plateau? Which segments will over- or underperform the market in general? We ll be putting the final touches on our used price forecast for the year over the next couple of weeks, so look for answers to these questions and more in next month s edition of Guidelines. 8

9 ATD/NADA Official Commercial Truck Guide Update Coasting into the New Year With a full eleven months of data in our database, we know that the used sleeper retail market took a bit of a breather in the September-November period. Retail pricing for the most recent 5 model years of trucks was flat to downwards in that period, as was sales volume. The wholesale market showed more strength, with average pricing rising more than expected on a minor decrease in average mileage. We consider the retail performance a seasonal break from the explosive growth in pricing that has been in place since late We expect the market to return to its general upward movement over the next couple of months, with mileage-related caveats. After leveling out in October, the retail sleeper market as a whole was down about $1200 in November. Mileage was up about 19K vs. last month, but was equal to September. Average age of these trucks, 71 months, has not changed since August. Mileage and age were therefore not the drivers of November s price reduction. See the Average Retail Price and Mileage graph for detail. The four-year-old sleeper benchmark was also off about Average Retail Price and Mileage: Sleeper Tractors $55, $50, $45, $40, $35, per. Mov. Avg. (Mileage) Source: NADA 2 per. Mov. Avg. (Price) $30,000 $4000 from its previous peak in August (see graph). November mileage was only 13k higher, so again, mileage is not the main factor. Generally, this segment s performance since Average Retail Price and Mileage: Four-Year-Old Sleeper Tractors $75,000 January has been flat to gradually declining in the face of sub $70,000 stantially higher mileage. Specifically, average mileage was $65, ,478 in January. That figure rose to 491,462 in September, $60,000 and November came in at 469,775. January s average price of $55,000 $69,519 turned out to be a bit of an anomaly, as following months saw prices fluctuate between $60,700-$65,700. As we frequently mention, buyers are finding a comfort level with what they will pay for trucks at different mileage levels. The Source: NADA 2 per. Mov. Avg. (Mileage) 2 per. Mov. Avg. (Price) $50,000 $45,000 $40,000 $35,000 current rule of thumb looks to be low-$60 s for a 2008 sleeper tractor with mileage in the mid-400 s. The wholesale sleeper market turned in an unexpectedly strong performance in November, setting a record for the year with an average of $38,228. Average mileage for this month was 624,709 not too far from the critical 650,000 mark, which we have determined to be the point at which price drops off considerably (see Average Wholesale Price and Mileage graph). Four-yearold sleepers also performed well in the wholesale environment, turning in a $3600 price increase over October on mileage 40K higher. (Continued on page 10) 9

10 Commercial Truck Guide Update (continued ) This wholesale performance is somewhat encouraging, given that auctions are a major source of inventory for the retail market. Elevated pricing on the wholesale side indicates continued confidence in the retail side. This is one reason why we are not overly concerned about the price moderation in the retail channel. Interestingly, average mileage in the retail market has risen much faster than in the wholesale market. Since late 2009, the Average Wholesale Price and Mileage: Sleeper Tractors $40,000 average wholesale truck s mileage is up 50,000, while the aver $35,000 age retail truck s increase is just about double that. One major reason for the slower increase on the wholesale side is the $30,000 $25,000 aforementioned 650,000-mile price delineator. Wholesale buyers know trucks with this mileage will soon need an overhaul if one has not already been completed, so pricing (and interest) drops off as mileage exceeds that level. On the retail side, the per. Mov. Avg. (Mileage) 2 per. Mov. Avg. (Price) $20,000 $15,000 $10,000 mileage of trucks sold is simply a function of what s available to $5,000 sell. Low-mileage trucks were cherry-picked from the marketplace early on, leaving only trucks with ever-higher mileage on dealers lots. Average Number of Sales Per Reporting Dealership (Trend) Speaking of selling, retail sales volume at the dealer level dropped considerably from October to November, down 19% (see graph). This decrease is on top of a 6.5% decrease the previous month. Retail Wholesale Sales volume is a corollary to selling price a decrease in both suggests a shift in demand. As such, November s results indicate a seasonal relaxation of activity. Reasons for this? The upcoming change in Section 179 tax incentives for 2012 likely prompted many buyers to complete their purchases before the end of the 2011 fiscal year. Source: NADA Also, fleets continue to sell used iron on their own, bypassing the dealer channel. The retail market remains at the mercy of the supply of trucks entering the secondary market, but this constraint was apparently slightly relieved in November. After weighing these factors, our bullish view of the used truck market remains. Sleepers are likely finding a retail price ceiling based on mileage, but daycabs are still trending upwards. And wholesale activity suggests continued market confidence. Fundamentally, the economic factors that have driven the new and used truck market for the past two years are still in place. We expect prices to follow a steady to upward trajectory in Stay tuned for a year-end wrapup in next month s edition of Guidelines. Also, keep an eye out for real-time updates of this data in the Commercial Truck Blog, accessible in the NADA Outlook section of 10

11 Percent change relative to January 2009 Percent change relative to January 2009 Percent change relative to January 2009 Guidelines January 2012 NADA Returning Used Supply Forecast About NADA s Returning Used Supply Forecast NADA s Returning Used Supply Forecast estimates the supply of vehicles returning to the secondary market at various points in the future. NADA s propriety methodology is predicated on actual new vehicle registration data and incorporates return period and volume estimates based on the original registration type (i.e. lease, loan, and rental fleet). The data in the following charts represents returning supply for vehicles less than six model years old. All data has been seasonally adjusted and monthly changes are relative to January % -2% Total Returning Supply -4% -6% -8% -10% -12% -14% -16% -18% -20% Return Month 10% 5% 0% -5% -10% -15% -20% -25% -30% -35% -40% Off-Lease & Personal Returning Supply Lease Personal 10% 0% -10% -20% -30% -40% -50% -60% -70% Off-Rental Returning Supply Return Month Return Month 11

12 Days' Supply Volume (Millions) Guidelines January 2012 Retail Market Indicators New Vehicle Sales Retail market indicators convey information on the performance of the new and used vehicle markets. Total vehicle sales are core indicators of consumer demand and overall industry health. Supply is a measurement used to gauge the relationship between supply and demand, and provides an indication of pricing strength in general New Vehicle Sales New Vehicle Sales YoY Change 30% 25% 1 20% % 10% 5% 0% -5% % Change 0-10% Source: WardsAuto.com Month New Vehicle Days' Supply Days' Supply YoY Change 4% 2% 0% 60-2% 50-4% % -8% -10% -12% -14% -16% -18% % Change Source: WardsAuto.com Month Seasonally Adjusted Annual Rate (Millions) Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec Source: WardsAuto.com 12

13 Price P/Gal. Price P/Gal. Guidelines January 2012 Fuel Prices Average Price of Regular Grade Gasoline: All Formulations $4.25 $4.00 $3.75 $3.50 $3.25 $3.00 $3.27 $2.75 $2.50 $2.25 $2.00 $1.75 $1.50 Source: EIA Month Average Price of On-Highway Diesel $5.00 $4.75 $4.50 $4.25 $4.00 $3.86 $3.75 $3.50 $3.25 $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 $1.50 Source: EIA Month 13

14 Index (SA) Rate (SA) Guidelines January 2012 Economic Drivers Unemployment and Consumer Confidence are two of the most important economic drivers behind both a consumer s ability and willingness to make a new or used vehicle purchase, and are provided as indicators on the future outlook for both markets. 10.5% 10.0% 9.5% 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% Unemployment Rate Source: BLS Month 120 Consumer Confidence Index Source: The Conference Board Month 14

15 NADAguides.com Consumer Site Trends New Activity About NADAguides.com 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. The figures contained below are based on consumer activity at and are calculated by measuring the number of unique lookups for a given period of time. Kia Subaru Jaguar MINI GMC Hyundai Audi Buick Chevrolet Infiniti BMW Saab Porsche Mercedes-Benz Volvo Volkswagen Jeep Scion Cadillac Land Rover Nissan Ford Suzuki Toyota Smart Honda Acura Lexus Mitsubishi Chrysler Mazda Lincoln Dodge YoY Change in Consumer Activity: NEW Make -23% Source: NADAguides.com 9% 34% 30% 43% 40% 38% 38% 56% 54% 63% 61% 73% 73% 70% 68% 87% 84% 81% 96% 92% 91% 98% 109% 106% 105% 105% 124% 116% 131% 125% 145% 177% -50% 0% 50% 100% 150% 200% Percent Change New: Top 15 Researched Models December 2011 December 2011 Rank MoM Change MY MAKE MODEL Chevrolet Cruze Ford F Chevrolet Silverado Toyota Camry Hyundai Sonata Ford F Jeep Grand Cherokee Chevrolet Impala 9 (1) 2011 Chevrolet Malibu Honda CR-V GMC Sierra (3) 2011 Toyota Tacoma Nissan Altima Chevrolet Camaro Ford Mustang New: Top 15 Researched Models December 2010 December 2010 Rank MY MAKE MODEL Ford F Chevrolet Silverado Ford Fusion Toyota Camry Chevrolet Camaro Dodge Ram Honda Accord Sdn Toyota Corolla Nissan Altima Chevrolet Malibu Ford Escape Chevrolet Equinox Chevrolet Impala Ford Mustang Hyundai Sonata 15

16 NADAguides.com Consumer Site Trends Used Activity YoY Change in Consumer Activity: USED Make Scion MINI Subaru Hyundai Toyota Kia Mercedes-Benz Honda Nissan Volkswagen Audi Mazda Hummer Dodge Lexus Chrysler Chevrolet Infiniti Ford Buick BMW Jeep Suzuki Mitsubishi Mercury GMC Cadillac Porsche Pontiac Acura Lincoln Saab Volvo Saturn Jaguar Land Rover -10% -4% -5% -6% 1% 1% 1% 5% 5% 4% 2% 6% 6% 8% 8% 13% 12% 11% 11% 11% 10% 9% 9% 17% 15% 13% 13% 23% 19% 18% 17% 28% 27% 27% 23% 23% Source: NADAguides.com -20% -10% 0% 10% 20% 30% 40% Percent Change Used: Top 15 Researched Models December 2011 Used: Top 15 Researched Models December 2010 December 2011 Rank MoM Change MAKE MODEL 1 0 Ford F Chevrolet Silverado Nissan Altima 4 2 Honda Accord Sdn 5 (1) Toyota Camry 6 (1) Chevrolet Impala 7 0 Dodge Ram Toyota Corolla 9 0 Ford Mustang 10 2 Chevrolet Tahoe 11 2 Chevrolet Silverado 2500HD 12 (1) Ford Escape 13 2 BMW 3 Series 14 4 Toyota Tacoma 15 (1) Ford Focus December 2010 Rank MAKE MODEL 1 Ford F Chevrolet Silverado Dodge Ram Honda Accord Sdn 5 Ford Super Duty F Chevrolet Impala 7 Nissan Altima 8 Chevrolet Tahoe 9 Toyota Camry 10 Chevrolet Silverado 2500HD 11 Ford Mustang 12 Jeep Grand Cherokee 13 BMW 3 Series 14 Chevrolet TrailBlazer 15 Dodge Ram

17 AuctionNet Wholesale Market Trends About AuctionNet AuctionNet is an industry-unique wholesale transaction database, available exclusively from NADA Used Car Guide, in joint partnership with the National Auto Auction Association (NAAA). Over 100 million records strong and updated weekly, it captures sales from all Manheim and ADESA, as well as participating ABC, ServNet and large independent auctions, representing over 80% of nationwide auction activity. Monthly Change in Average AuctionNet Price: Core Segments November 2011 v. December 2011 NADA Segment 2006MY 2007MY 2008MY 2009MY 2010MY Compact Utility -3.2% -0.2% -1.2% -0.4% -2.2% Intermediate Compact -2.1% -2.6% -2.9% -1.7% -0.3% Intermediate Mid-Size -2.4% -1.3% -2.2% -0.8% 0.0% Large Pickup -1.6% 0.1% -0.6% 0.5% 0.8% Large SUV -3.0% -1.5% -1.2% 2.7% 2.8% Luxury Mid-Size -4.7% -5.9% -1.4% -1.9% -1.7% Mid-Size Utility -1.3% -1.2% -2.0% -0.8% 0.4% Mid-Size Van -0.9% -3.9% -1.5% -2.4% 1.3% Near Luxury -3.4% -1.4% -1.3% -1.6% -1.7% *Underlying data has been adjusted for Mileage & Mix. See the last page of "Guidelines" for data key. 3.0% Monthly AuctionNet Price Change: 1 to 5 yr. Old Vehicles* Nov-11 vs Dec % YoY AuctionNet Price Change: 1 to 5 yr. Old Vehicles* Dec-10 vs Dec % 6.0% 5.0% 2.0% 4.0% 1.5% 3.0% 1.0% 2.0% 0.5% 1.0% 0.0% Car Pickup Utility Van 0.0% Car Pickup Utility Van *Figures have been adjusted for both Mileage & Mix *Figures have been adjusted for both Mileage & Mix 17

18 Guidebook Value Trends Month-Over-Month Monthly Change in Average Official Used Car Guide Value: NADA Segment December 2011 v. January 2012 NADA Segment 2006MY 2007MY 2008MY 2009MY 2010MY* Compact Utility -0.6% -0.9% -0.7% -0.5% -0.4% Entry Subcompact -2.2% -1.8% -2.6% -1.6% -2.4% Intermediate Compact -0.9% -1.9% -2.1% -1.7% -2.0% Intermediate Mid-Size -1.0% -2.2% -1.8% -1.4% -1.6% Intermediate Subcompact 0.0% -0.6% -1.3% -1.2% -0.7% Large Car -1.7% -1.7% -0.9% -0.8% -1.2% Large Pickup -0.3% -0.1% -0.3% 0.0% -0.1% Large SUV 0.0% -0.1% 0.0% 0.0% 0.1% Large Van -1.2% -1.7% -1.6% -3.0% -2.3% Luxury Compact Utility 0.0% 0.0% -2.4% -0.8% -0.8% Luxury Large -2.3% -2.6% -0.9% -1.6% -3.6% Luxury Large Truck 0.0% -0.3% 0.0% 0.0% -0.8% Luxury Mid-Size -2.5% -0.9% -1.8% -1.7% -2.7% Luxury Mid-Size Utility -0.4% -0.1% -0.1% -0.1% -0.2% Luxury Sport -1.0% -0.9% -1.2% -1.2% -0.8% Mid-Size Pickup -1.4% -0.8% -2.2% -0.5% -1.4% Mid-Size Utility -0.9% -0.4% -0.5% -0.3% -0.5% Mid-Size Van -1.2% -0.7% -1.3% -1.1% -0.8% Near Luxury -1.7% -1.9% -2.1% -1.3% 1.1% Premium Luxury Large -0.4% -1.4% -1.8% -2.5% -1.7% Sport -0.5% -0.4% -0.7% -0.4% -0.8% Upper Compact -2.8% -2.3% -2.8% -1.6% -1.0% Upper Mid-Size -2.3% -1.1% -2.4% -2.2% -2.3% Upper Sport -0.4% -0.2% -0.1% 0.5% 0.2% *Value movement can be influenced by newly valued vehicles. See the last page of "Guidelines" for data key. Monthly Change in Average CTG Value: NADA Segment December 2011 v. January 2012 NADA Segment 2005MY 2006MY 2007MY 2008MY 2009MY* Commercial Van 0.0% 0.0% 0.0% 0.0% 0.0% Extended Hood 0.0% 0.0% 0.0% -0.1% -1.1% Highway Aerodynamic 0.0% 0.0% 0.0% -0.1% -0.1% Highway Traditional 0.0% 0.0% 0.0% 0.0% -0.1% Local/Delivery Daycab 0.0% 0.0% 0.0% -0.1% -0.2% Medium Duty Cabover 0.0% 0.0% 0.0% 0.0% 0.0% Medium Duty Conventional 0.0% 0.0% 0.0% 0.0% 0.0% Vocational/Construction 0.0% 0.0% 0.0% 0.0% 0.0% *Value movement can be influenced by newly valued vehicles. See the last page of "Guidelines" for data key. 18

19 Guidebook Value Trends Year-Over-Year NADA Used Car Guide Value Change: January, 2011 v NADA Segment 5YR 4YR 3YR 2YR 1YR YoY Segment Change Compact Utility 20.1% 12.2% 12.2% 10.6% 9.8% 11.2% Entry Subcompact 26.5% 34.5% 32.9% 20.8% 11.5% 20.3% Intermediate Compact 23.2% 9.8% 15.3% 11.9% 15.0% 16.3% Intermediate Mid-Size 20.4% 16.7% 9.0% 3.1% 6.0% 9.1% Intermediate Subcompact 14.3% 4.5% 14.1% 10.7% 10.2% 8.1% Large Car 17.2% 10.0% 12.5% 2.3% 6.8% 8.5% Large Pickup 1.6% 9.2% 5.4% 4.0% 1.3% 1.5% Large SUV -3.1% 20.1% 7.1% 1.3% -1.7% 4.9% Large Van 14.7% 12.2% 12.1% 8.3% 7.0% 10.1% Luxury Compact Utility 14.0% 8.7% 4.7% 21.3% 11.0% 13.4% Luxury Large 18.1% 24.1% 18.7% 13.5% 5.8% 10.9% Luxury Large Truck 9.1% 12.5% 17.3% 13.5% 6.9% 8.2% Luxury Mid-Size 25.4% 16.3% 7.3% 5.8% 6.3% 10.0% Luxury Mid-Size Utility 15.7% 13.3% 13.6% 13.9% 12.1% 16.2% Luxury Sport -1.2% 26.3% 12.9% 12.7% 11.5% 11.1% Mid-Size Pickup 13.7% 8.3% 8.4% 18.0% 3.1% 9.7% Mid-Size Utility 12.4% 11.7% 8.8% 6.9% 5.8% 5.5% Mid-Size Van 15.3% 7.3% 24.3% 16.1% 10.6% 15.6% Near Luxury 17.1% 15.8% 14.0% 4.8% 19.8% 18.8% Premium Luxury Large 14.4% 24.5% 15.8% 14.9% 16.4% 15.5% Sport 14.1% 26.1% 12.1% 10.9% 9.3% 12.2% Upper Compact 18.2% 12.1% 3.5% 8.6% 5.7% 5.2% Upper Mid-Size 21.3% 10.7% 6.9% 25.0% 3.0% 7.9% Upper Sport 19.5% 22.0% 15.3% 12.8% 24.0% 23.9% *Calculations are based on vehicle age. I.e. Values for 1 year old vehicles in CY2010 are compared against values for 1 year old vehicles in CY2009. ATD/NADA Commercial Truck Guide Value Change: January, 2011 v NADA Segment 5YR 4YR 3YR 2YR YoY Segment Change Commercial Van 15.7% 26.2% 34.4% -11.8% 10.0% Extended Hood 45.2% 14.5% 33.8% 23.6% 25.4% Highway Aerodynamic 43.7% 14.4% 39.9% 22.9% 21.8% Highway Traditional 38.5% 17.8% 31.2% 20.3% 16.4% Local/Delivery Daycab 31.2% 16.3% 37.3% 18.5% 21.7% Medium Duty Cabover 34.6% 34.9% 27.3% 0.2% 14.7% Medium Duty Conventional 27.2% 31.8% 30.4% 15.7% 18.1% Vocational/Construction 18.8% 20.3% 48.2% 12.6% 17.0% *Calculations are based on vehicle age. I.e. Values for 1 year old vehicles in CY2010 are compared against values for 1 year old vehicles in CY

20 Guidebook Value Trends Year-To-Date NADA Used Car Guide Value Change: January December 2011 YTD Segment NADA Segment 2006MY 2007MY 2008MY 2009MY 2010MY* Change Compact Utility -6.7% -5.9% -4.0% -3.4% -6.4% -4.5% Entry Subcompact 6.8% 5.1% 1.0% 1.1% -12.7% 2.2% Intermediate Compact -3.3% -3.0% -1.8% -1.6% -11.1% -2.2% Intermediate Mid-Size -4.0% -4.1% -5.1% -8.3% -14.5% -5.7% Intermediate Subcompact -4.3% -1.5% -4.0% -3.9% -13.0% -3.5% Large Car -3.6% -5.0% -7.5% -9.5% -14.0% -6.4% Large Pickup -11.0% -10.2% -8.5% -7.9% -4.4% -9.2% Large SUV -15.3% -14.0% -10.4% -11.1% -10.0% -12.1% Large Van -5.3% -4.0% -5.3% -6.2% -8.4% -5.3% Luxury Compact Utility -6.4% -7.5% -8.2% 0.7% -1.9% -1.3% Luxury Large -6.4% -3.4% -9.8% -11.5% -11.3% -8.7% Luxury Large Truck -11.4% -10.7% -8.2% -8.6% -5.9% -9.2% Luxury Mid-Size -7.3% -8.9% -9.8% -10.3% -9.7% -9.4% Luxury Mid-Size Utility -10.0% -9.3% -9.4% -8.3% -3.4% -8.2% Luxury Sport -7.4% -5.6% -9.7% -9.4% -7.1% -8.5% Mid-Size Pickup -3.9% -4.9% -4.9% -3.3% -5.6% -4.3% Mid-Size Utility -12.3% -12.1% -9.1% -8.6% -7.5% -10.1% Mid-Size Van -11.2% -9.3% -7.0% -4.7% -6.3% -8.6% Near Luxury -8.7% -8.7% -9.6% -8.9% -8.6% -9.1% Premium Luxury Large -10.4% -10.5% -10.9% -13.9% -8.4% -11.8% Sport -4.1% -4.3% -3.5% -3.6% -9.9% -3.8% Upper Compact -4.5% -8.0% -6.0% -9.9% -5.6% -7.6% Upper Mid-Size -7.8% -13.0% -4.7% -7.1% -9.7% -8.6% Upper Sport -5.1% -4.6% -4.6% -9.2% -8.8% -6.5% *May 2011 through current period. ATD/NADA Commercial Truck Guide Value Change: January December 2011 YTD Segment NADA Segment 2005MY 2006MY 2007MY 2008MY 2009MY Change Commercial Van -3.1% -1.3% -4.5% -3.1% -7.1% -3.1% Extended Hood 6.2% -1.5% -7.5% -1.2% -5.0% 2.0% Highway Aerodynamic 7.7% -0.5% -10.6% -5.4% -8.6% -5.6% Highway Traditional 8.3% -1.6% -8.0% -3.9% -7.7% -4.2% Local/Delivery Daycab 3.8% -0.5% -4.7% -0.8% -6.3% -0.4% Medium Duty Cabover 10.9% 6.1% 6.8% 0.0% N/A 4.6% Medium Duty Conventional 3.0% 2.5% -0.1% -0.4% 4.5% 0.2% Vocational/Construction 0.1% 0.2% -0.1% 0.5% 0.0% 5.0% 20

21 At NADA Used Car Guide This year s NADA & ATD Convention & Expo will be held together for the first time in exhilarating Las Vegas, NV! Both will be held at the Las Vegas Convention Center from February 3-6. Take your 1st step to a better appraisal. Stop by NADA Used Car Guide booth #2551 and let one of our staff members review with you NADA AppraisalPRO. This tool has all the bells and whistles. Our convention special gives you a FREE i Pad2 with a NADA AppraisalPRO annual subscription. Additionally, at the booth, we will be represented by VP & COO, Mike Stanton as well as Executive Automotive Analyst, Jonathan Banks. Mike, Jonathan, and the editorial staff will be available to answer your Used Car Guide questions. Next, a press conference addressing the state of the used car industry will be held by Jonathan Banks and NADA Chief Economist, Paul Taylor, PhD on Saturday February 4 at 10 a.m. As a final point, NADA s Commercial Truck Senior Analyst, Chris Visser will be hosting the ATD booth #4111. Stop by to visit Chris to get the latest on the commercial truck industry, used truck values and to see our latest NADA VIN Scanner in action. We look forward to seeing you at the convention in Las Vegas! CONTACTS: 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 Automotive OEMs Stu Zalud x4636 szalud@nada.org Business Development Manager Jim Gibson x7136 jgibson@nada.org Director Sales and Customer Service Dan Ruddy x4707 druddy@nada.org About NADA Used Car Guide Over a 79-year history, NADA Used Car Guide has earned its reputation as the leading provider of market-reflective vehicle valuation products, services and information to businesses throughout the U.S. and worldwide. NADA s editorial team collects and analyzes over one million combined wholesale and retail automotive-related transaction prices per month. Its guidebooks, auction data, analysis, and data solutions offer automotive, financial, insurance, and government professionals the timely information and reliable solutions they need to make better business decisions. Visit Director Public Relations Charles Cyrill (mobile) ccyrill@nada.org 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. 21