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1 WEEKLY CHANGE WEEKLY CHANGE In the first week of the new year, values of used vehicles continued to decline on pace with the trend seen in ember. The previous year ended with the lowest depreciation rate in three years. Anil Goyal, Executive Vice President, Operations 0% -0.2% -0.6% -0.8% -1.0% -1.2% -1.4% -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$70 CARS -0.69% 0% -0.2% -0.6% -0.8% -1.0% -1.2% -1.4% -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$ % -$84 TRUCKS -0.54% Model Years: , Volume Weighted Wholesale Average Values, Weekly Change from 12/28/18 to 1/4/19 Used Vehicle Values Continue to line at a Faster Clip Volume-weighted, overall car segment values decreased by 0.69% last week. In comparison, the market values decreased by 0.64% on average during the prior 4-week period. In car segments, the Full-Size Car, Sub-Compact Car, and Luxury Car experienced the biggest drops. Volume-weighted, overall truck segment (including pickups, SUVs, and vans) values decreased by 0.54% last week. In comparison, the market values decreased by 0.55% on average during the prior 4- week period. In truck segments, the Sub-Compact Luxury Crossover and Full-Size Luxury Crossover/SUV segments performed the worst.

2 Sentiment from the Industry Key comments from industry observers: Cautious optimism is the theme for me. I believe things will ramp up a bit right away, while slowly gaining momentum will be better than last year for used vehicles. The tax season feeding frenzy is now more of a myth than a reality. Auction owner in Pacific Northwest Bought several vehicles online and the floors have definitely been adjusted. On some $40,000 vehicles they were down close to $1,000 from the mid-ember floors. I buy for several new car stores and I can tell you that retail is flat here in the Southwest. I am buying mostly trucks and SUVs as the low fuel prices have kept them hot. Wholesale buyer in TX Annual Used Vehicle Depreciation 2-6 Year Old Vehicles % -10.4% -13.3% -11.8% -13.2% -13.2% -12.4% -17.3% Source: Black Book Visual Analytics The depreciation rate in 2018 was significantly better than expected as tax cuts, strong economic and job growth contributed to high demand for used vehicles. The annual depreciation of used vehicles was only 12.4% in Vehicle Highlight The 2019 Nissan Kicks is equipped with an inline 4-cylinder engine capable of producing 122 hp and 114 lb-ft of torque. Standard features for the Kicks include a 7 touch-screen display, Siri Eyes Free, and a Bluetooth hands-free system. MSRP for the Sub-Compact Crossover SUV starts at $19,585 (destination fees included). The vehicle s main competitors are the Ford EcoSport, Toyota C-HR, and Honda HR-V. This week s report includes our Monthly Edition Supplement on Specialty kets. 2

3 SPECIALTY MARKETS: COLLECTIBLE CARS Mecum s Kissimmee Auction Kicks off 2019 Although most enthusiasts are anxiously awaiting the collectible car super week that happens in Scottsdale, Arizona in mid-january, don t forget that Mecum is hosting a major auction in Kissimmee, Florida January 3 rd -13 th. It s a huge event, with over 3,500 collectible cars expected to cross the block, including a 1965 Ford GT Roadster, two LaFerraris, and a pair of mid-year Corvettes owned by Bill Mitchell and Harley Earl. Eric Lawrence, Director of Specialty kets American Muscle Car Values Mecum s Kansas City auction did well, bringing in almost $9,000,000, a slight increase over last year s final numbers. Chevrolet products, especially Corvettes, were some of the biggest sellers. RM Sotheby s Petersen Automotive Museum auction generated nearly $40,000,000 in sales, with an 88% sell through rate. The sale of the Ferrari 290 MM ranks within the top ten most expensive cars sold at auction. McCormick s Palm Springs, California auction brought in $5,600,000 and achieved a 64% sell through rate. The top ten sales were spread over all types of vehicles, and most cars were affordable for the average collector. Ferrari 290 MM. Courtesy of RM Sotheby s. Notable Recent Auction Sales Include: 1956 Ferrari 290 MM Race Car $22,000,000 (RM Sotheby s) 1971 Lamborghini Miura SV $2,200,000 (RM Sotheby s) 1989 Ferrari F40 Coupe $1,550,000 (RM Sotheby s) 2015 McLaren P1 Coupe $1,500,000 (RM Sotheby s) 1964 Porsche 356 SC $98,000 (McCormick) 1953 Buick Roadmaster Convertible $65,000 (McCormick) 1988 Ferrari 328 GTS Targa $61,500 (McCormick) 2006 Ford GT Coupe $310,000 (Mecum) 1967 Chevrolet Corvette Conv 327/350 $70,000 (Mecum) 2009 Bentley GT Coupe $67,000 (Mecum) 3

4 Jan-14 Jun Jul Jan-15 Jan-16 Jan-17 Jan-18 Jan-14 Jun Jul Jan-15 Jan-16 Jan-17 Jan-18 SPECIALTY MARKETS: RECREATIONAL VEHICLES RV Values Dip Slightly As Winter Arrives As we move further into winter, RVs are continuing to exhibit typical seasonal behavior. Both towables and motorized units are down slightly this month, but their rate of decline has slowed. This is the time of year that many dealers take a step back from active buying and selling and focus on completing any improvements to their stores so that they can be up and running when the first spring customers come through their doors. Eric Lawrence, Director of Specialty kets Motor Home Value Trends For Motor Homes (including Class A, B, and C) Average selling price was $43,132, down $597 (1.3%) from the previous month One year ago, the average selling price was $46,718 Auction volume was down 9% from the previous month. The average model year was Travel Trailer and Fifth Wheel Value Trends For Towables (including Travel Trailers and Fifth Wheels) Average selling price was $12,593, down $459 (3.5%) from the previous month One year ago, the average selling price was $13,325 Auction volume was down 5% from the previous month. The average model year was

5 SPECIALTY MARKETS: POWERSPORTS Powersports ket Drops As Winter Arrives The Powersports market is down as we enter the New Year. Nearly all segments see declines in value, with the Off-Road bikes taking the biggest hit this month. Scott Yarbrough, Motorcycle & Powersports Editor 3.0% Motorcycle & Powersports Percent Change 2018 to Jan % 2.0% 1.0% 0.0% -1.0% -0.3% -2.0% -3.0% -4.0% -5.0% -2.9% -2.7% -2.4% -3.2% -4.2% -2.0% -1.3% -2.4% This is the second month in a row where the off-road segments as a group (ATV, Off-Road, and Utility), and the Off-Road Bikes in particular, are down by fairly substantial amounts. The drop of 4.2% for the Off-Road Bike segment is one of the larger declines we have seen in a while. Scooters continue to outperform the market as a whole, with a tiny drop of 0.3%. Although the auction volumes are not high for these bikes right now, they have been relatively strong value-wise since earlier in the fall, and the trend has unexpectedly continued as we enter the winter months. Among the street bikes, the Cruisers have taken a bigger hit than the standard/sport bikes once again. The heavy cruisers in particular continue to see their overall marker soften in relation to the rest of the road going bikes. They are still top performers as a group in retained value, but the gap between the rest of the street bikes is narrowing little by little with each passing month. 5

6 Monthly Change SPECIALTY MARKETS: HEAVY DUTY Used Truck Values Continue to be Strong Trucks are moving in and out of service faster and we will be watching to see how much wholesale values are affected. Charles Cathey Heavy-Duty Truck and Commercial Trailer Editor $0 Average Wholesale Value Changes (ket) -$200 -$400 -$600 -$800 Construction/Vocational Over the Road Trucks & Tractors Regional Tractors DATE The increase of new truck deliveries will most likely raise depreciation of the units they are replacing. Traditional new truck customers could not get timely delivery of inventory for months and have been relying on late model used trucks to fill their needs, which held used truck values higher than normal. Going forward, this group of buyers will likely switch back to new trucks; increasing the amount of used inventory. The pace of this potential yet very probable increase in depreciation is uncertain but will be monitored and reported by Black Book. Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL Value $ Change % Change Value $ Change % Change Value $ Change % Change YEARS 01/01/19 96, % 77, % 69, % /01/18 96, % 77, % 69, HD Construction/Vocational segment increased an average of $ 4 (0.0%) in ember, compared to the average decline of $141 (0.1%) in ember HD Over the Road Tractor segment dropped an average of $82 (0.1%) in ember, compared to the average drop of $243 (0.3%) in ember HD Regional Tractor segment dropped an average of $8 (0.0%) in ember, compared to the average depreciation of $276 (0.4%) in ember. DATE Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL Value $ Change % Change Value $ Change % Change Value $ Change % Change YEARS 01/01/19 49, % 33, % 26, % /01/18 49, % 33, , % HD Construction/Vocational segment dropped an average of $6 (0.0%) in ember, compared to the $74 (0.1%) in ember HD Over the Road Tractor segment dropped an average of $72 (0.2%) in ember, compared to $131 (0.4%) average depreciation in ember HD Regional Tractor segment dropped an average of $27 (0.1%) in ember, compared to the average drop of $128 (0.5%) in ember. 6

7 SPECIALTY MARKETS: MEDIUM DUTY Medium Duty Truck Demand Continues to Increase Wholesale prices continue to stabilize as demand grows for units in these segments to satisfy regional delivery and construction needs. Josh Giles - Senior Truck Editor Medium Duty MODEL Medium Duty MODEL DATE Value $ Change % Change YEARS DATE Value $ Change % Change YEARS 01/01/19 49, % /01/19 21, % /01/18 49, % /01/18 21, Late Models ( ) dropped an overall weighted average of $132 in ember. This is a slight improvement over the $157 drop witnessed in ember. Older Models ( ) dropped an overall weighted average of $37 (0.2%) in ember. This is also an improvement over last month s depreciation of $87 (0.4%). CHANGES IN WHOLESALE VALUE MODEL YEARS 2014 TO $200 +$100 $0 -$100 -$200 -$300 -$400 -$500 -$600 -$700 '17 '18 '18 '18 '18 CLASS 4 CAB/CHASSIS CLASS 5 CAB/CHASSIS CLASS 6 CAB/CHASSIS CLASS 7 CAB/CHASSIS LIGHT-DUTY PICKUP TRUCKS This is the fourth consecutive month of improved wholesale prices on most units in classes 4 through 7. The outlook for new truck orders remains strong; however, an increase in orders for units in this segment doesn t always translate into an increase in used supply. Operators in these segments are not always replacing their trucks. Companies are finding second and third uses for these units to get as much life out of each unit as possible. Demand of units in these segments will continue to increase as construction and delivery businesses thrive. Diesel Price Changes 11/12/18 +$0.40 -$ /19/18 +$0.37 -$ /26/18 +$0.34 -$ /03/18 +$0.29 -$ /10/18 +$0.25 -$ /17/18 +$0.22 -$0.04 +$0.50 +$0.40 +$0.30 +$0.20 +$0.10 +$0.00 -$0.10 Price Chg/Week Price Chg/Year 1745 N. Brown Rd., Suite 130, Lawrenceville, GA info@blackbook.com Opt-in to receive reports from Black Book at 7