NADA Used Car Guide Industry Update

Transcription

1 NADA Used Car Guide Industry Update February 2014 Used Vehicle Prices Flat in January Prices tick up by 0.1%; NADA s used vehicle price index remains unchanged at Used Prices Expected to Climb by 2.1% in February Prices to climb marginally in March before falling the remainder of the year February Official Used Car Guide Movement Trade-in values raised by an average of 1%; car and truck values increase by 1.2% and 0.8%, respectively Weather Stalls New Vehicle Sales Growth Sales drop by 3%; Seasonally Adjusted Annual Rate reaches 15.2M

2 January 2010 = 100 TABLE OF CONTENTS New & Used Market Trends... 2 Economic Data NADA Official Used Car Guide Value Trends At NADA Used Car Guide NEW & USED MARKET TRENDS The continuous blasts of arctic weather that affected large swaths of the country did little to push used vehicle prices off of their expected course in January, as the month s essentially flat increase of just 0.1% relative to December was in line with NADA s forecast for the period. NADA s seasonally adjusted used vehicle price index was unchanged at in January, tied with two other months (August 2013 and December 2013) as the third highest figure ever recorded. Price movement for the majority of segments fell between a tight range of -0.3% to 0.4%, with compact utility, large SUV and mid-size van prices dropping slightly, while compact car, large pickup and midsize utility prices inched up; mid-size car prices were flat over the month. NADA s used vehicle price index remains unchanged at 124.6, tied with August 2013 and December 2013 as the third highest ever recorded. Per the seasonal norm, luxury car and utility prices continued to fall in January, dropping by respective figures of 1.1% and 0.9%. Luxury car losses were a notable one percentage point improvement over December s 2.1% drop, while luxury utility depreciation matched December s figure; declines for both segments also essentially equaled what was recorded for the month last year. NADA Used Vehicle Price Index Vehicles up to eight years in age. Seasonally adjusted January 2014: Index unchanged at On an annual basis, wholesale prices ended the month a scant 0.3% higher than they were in January For the eighth month in a row, large pickup prices were at least 10% higher than they Source: NADA Used Car Guide NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 2

3 Percent Change Percent Change [ NEW & USED MARKET TRENDS continued ] were on a prior-year basis and January marked an incredible 59th straight month of annual price growth for the segment the longest streak of growth recorded for any group of vehicles. Exhibiting similar strength, large SUV prices were 6.2% higher on a prior-year basis last month; however, this is the lowest annual improvement recorded since January 2012 s figure of 5.9%. At 2% and 3%, respectively, mid-size utilities and vans rounded out the list of segments whose prices remained in the green compared to last year. As for declines, compact car, mid-size car and luxury utility prices were on average 0.8% lower relative to last year, while compact utility prices were down by 1.4%. Bringing up the rear was the luxury car segment, whose 2.8% fall extended the group s monthly year-over-year losses to 13 straight. AuctionNet Volume Trends The average number of weekly AuctionNet sales was 6% higher in January than it was in the preceding four-week period (excluding holiday weeks), with growth led by a combined 16.2% jump in the number of 2011 and 2012 model year transactions (the 2014 model year increase of nearly 63% was off of a low base). ly AuctionNet Price Change - December 2013 vs. January 2014 Vehicles up to eight years in age. 0.7% 0.2% -0.3% -0.8% -1.3% -1.8% -2.3% -2.8% -3.3% -3.8% 0.4% Compact Car Source: NADA Used Car Guide Source: NADA -0.3% Compact Utility 0.3% -0.3% -1.1% -0.9% 0.0% 0.4% Large Pickup Large SUV Luxury Car Luxury Utility Mid-Size Car Mid-Size Utility Segment Annual AuctionNet Price Change - YTD, 2013 vs Through January. Vehicles up to eight years in age. 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -0.8% Compact Car Source: NADA Used Car Guide Source: NADA -1.4% Compact Utility 10.0% 6.2% -2.8% Large Pickup Large SUV Luxury Car Luxury Utility Segment -0.9% -0.7% Mid-Size Car 2.0% Mid-Size Utility -0.2% Mid-Size Van 3.0% Mid-Size Van 0.1% Market Average 0.3% Market Average Weekly sales volume increased by a smaller 7% for the 2013 model year, while sales for model years 2007 through 2009 dropped by an average of 1.3%; signaling dissipating off-lease volume, the average number of transactions for the 2010 model year dropped by a substantial 7.6%. AuctionNet Auction Volume Trends The average number of weekly AuctionNet transactions. Model Year Period Prior 4-wk Avg.* 8,357 7,470 4,323 8,418 11,669 9,083 12, Current 4-wk Avg. 8,237 7,345 4,295 7,778 13,638 10,503 13, Difference (%) -1.4% -1.7% -0.7% -7.6% 16.9% 15.6% 7.0% 62.5% Source: NADA Used Car Guide *Excludes the holiday weeks of 11/25, 12/23 & 12/30/13 NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 3

4 [ NEW & USED MARKET TRENDS continued ] It s worth noting that the number of 2013 model year to follow a familiar seasonal pattern, with prices transactions recorded last month was 13% lower than continuing to grow slightly through March before falling those of 2012 model year units captured in January throughout the rest of the year. NADA predicts overall Given the foul weather that gripped much of the country, depreciation from April through December will average it s highly likely that fewer rental 2.3% per month; by comparison, units were able to reach auction depreciation over the same period lots in January. Considering this, it wouldn t come as a surprise if the market were to experience an above-average spike in rental volume over the next few weeks as remarketers push to make up for lost time. That being said, the increase in rental volume should be countered by a rise in buyer traffic, as weather also prevented In February, NADA expects used prices to rise by an average of 2.1%, 1.4 points more than the increase recorded in February a number of dealers from making their way to the lanes. February 2014 used vehicle price forecast Historically, February marks the beginning of a two-tothree month period of definitive used vehicle price growth as the receipt of federal tax refund checks help stimulate an upsurge in consumer auto demand. From 1995 to 2013, prices of units up to eight years in age increased by an average of 1.8% on a monthly basis in February the most of any month and over the past three years prices have grown by an average of 2.2% during the month. Concerning this February, NADA expects prices will rise by an average of 2.1%, which is a meaningful 1.4 points more than the increase recorded last February when higher payroll taxes impeded consumer spending. Price movement over the remainder of 2014 is expected last year averaged a smaller 1.8%. The higher rate of depreciation expected this year is due almost entirely to an expanding supply of units up to four years in age, which NADA anticipates will increase by 11% compared to Despite the increase, however, late model supply will still be relatively tight as it will remain some 7% below 2009 levels and 18% lower than 2007 s pre-recession level. In addition, numerous signs point to dealers staying highly focused on used car operations and consumer appetite for certified pre-owned vehicles which are predominantly derived from this age group continues to grow. These factors will help counter the downward pressure placed on late model prices by higher supply. As far as older model volume is concerned, NADA estimates that the number of units between five and eight years old will fall by 9.6% in 2014 (again, a byproduct of the new vehicle sales decline that occurred from 2006 to 2009). Supply aside, demand side factors will remain largely positive in The current consensus forecast places economic growth for the year at 2.8%, a rate substantially better than last year s estimated figure of 1.9%. NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 4

5 Used Vehicle Price Index (2010 = 100) [ NEW & USED MARKET TRENDS continued ] Unemployment will continue to fall, home prices will remain on the rise (although at a rate lower than 2013 s 12% increase), and gasoline prices are expected to be flat to down slightly. Credit conditions will deteriorate slightly as the market transitions from a period of extremely favorable conditions to one more in line with historic norms; however, the lending environment will still be very strong compared to prior year standards. And while lower new sales growth makes manufacturer incentive spending a bit more of a wildcard this year, it s likely that discount strategy will continue to revolve around lease and finance subvention rather than customer cash; this, along with an anticipated rise in new vehicle prices, will help shield used prices from the effect of higher total incentive spending. Taking into account the minimal changes expected of demand drivers, the diverging movement of supply across the various vehicle age groups will be the primary factor affecting used vehicle prices in NADA predicts prices for vehicles younger than five years old will finish the year 2.5% lower than they were in 2013, while five-to-eight year old vehicle prices will remain essentially flat. Combined, the average price of units up to eight years in age is expected to slip by 0.5% to 1% in February Official Used Car Guide value movement NADA Used Vehicle Price Index & CY14 Forecast Units up to 8 years in age Trade-in values in February s edition of the Official Used Car Guide were raised by an average of just over 1% relative to January s edition. Car values were increased by an average of 1.2%, with mid-size car figures rising by a segment leading average of 2.2% and subcompact and compact car values increasing by 1.4%. Value changes for remaining car segments were minimal, rising or falling by an average of just 0.3%. Truck values were raised by a smaller average of 0.8% for February s edition, with compact utility and large SUV increases of 1.7% and 1.1%, respectively, exceeding those of other truck segments. Large van and mid-size utility (both mainstream and luxury) values were increased by an average of 0.9%; figures for remaining truck segments were Source: NADA Used Car Guide Forecast Calendar Year Down 0.5% - 1% NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 5

6 New Vehicle SAAR (millions) Sales Volume (millions) [ NEW & USED MARKET TRENDS continued ] left essentially unchanged from January s levels. New vehicle sales drop by 3%, SAAR dips to 15.16M units Historic winter weather arrived in January to the delight of students across much of the United States, but crippled businesses and curbed auto sales as people were confined to their homes for days on end. New sales were held to just 1.01 million units and the 3% decline was only the second year-over-year decrease in the last 32 months. January s total sales figure was also the lowest of any month in the past two years after the 910,000 units that were delivered in January While the overall industry performance left much to be desired and mainstream brands were down a collective 4%, luxury brands enjoyed a solid 5.5% improvement. Also, roughly half of all mainstream nameplates (10 out of 21) exhibited gains and together were up greater than 12%, while the brands with declines were down more than 10%. On the luxury side, nine out of 12 brands enjoyed increased sales and improved by 10%, collectively, whereas Volvo, Cadillac and Porsche fell greater than 14%. The seasonally-adjusted annual rate (SAAR) slipped to million units from last year s million, a decline of 0.5%. Adding to the disappointing result was the fact that January s SAAR was the first yearover-year decline since August 2010, a span of 41 months. New Vehicle Sales New Vehicles Sales YoY Change Source: Wardsauto.com New Vehicle SAAR SAAR YoY Change Source: Wardsauto.com 20% 15% 10% 5% 0% -5% -10% 14% 12% 10% 8% 6% 4% 2% 0% -2% Percent Change Percent Change Domestics gets snowed in, but Chrysler plows ahead Hailing from Michigan, the Big Three s performance took a hit after multiple storms brought excessive amounts of snow and ice as well as below-freezing temperatures that NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 6

7 [ NEW & USED MARKET TRENDS continued ] discouraged folks from leaving the comforts of their homes. The Midwestern and Southern regions represent hugely significant parts of their customer bases, but were hit hard by poor weather, which led to a 5.5% drop in domestic sales, totaling fewer than 449,000 units. Chrysler Group LLC successfully navigated the obstacles, however, and managed an impressive 7.9% increase in sales. Although Dodge sales fell by 19%, the rest of the company s lineup was up as Jeep and Ram both experienced healthy growth of 38% and 24%, respectively. Jeep kept its momentum up and once again led the group s brands by increasing sales of every model in its portfolio, including the Cherokee, whose sales were up by 416% versus the discontinued Liberty, the model it replaced in Jeep s lineup. As the largest automaker in the United States, the sales performance of General Motors carries a significant amount of weight in total industry figures and in January, despite remaining as the sales leader, the automaker s 171,000 deliveries was a 12% drop that greatly influenced the industry s disappointing month. Of all GM brands, only Buick was able to keep sales from falling in the double-digits. Sales for the brand dropped by 1.4% and were propped up by a good showing from the Regal (up 44%) and strong sales of the Encore (up 570%), which did much to help it stand out from the rest of the GM family. Ford Motor Company had a difficult month as well with overall sales down 7.4%, but Lincoln was a bright spot for the organization after accomplishing 43% growth compared to Ford brand s 8.8% decline. Sales were mixed among the Lincoln products, but the model that swung the pendulum greatest was the MKZ, which was up a notable 368% and carried the brand for the month. While only the Mustang and Flex posted gains for Ford, the models that most underperformed were the Focus and Taurus, down 26% and 34%, respectively, for Mainstream Brand Performance (Units Sold) Change From Jan-14 Dec-13 Jan-13 Ago Year Ago Buick 13,278 15,379 13,463-14% -1.4% Chevrolet 119, , ,304-22% -13% Chrysler 21,113 20,270 20,696 4% 2% Dodge 34,905 47,689 43,227-27% -19% Fiat 3,222 3,745 2,503-14% 29% Ford 144, , ,445-29% -8.8% GMC 27,733 43,120 30,816-36% -10% Honda 80, ,504 84,137-32% -4.0% Hyundai 44,005 63,005 43,713-30% 0.7% Jeep 41,910 53,275 30,318-21% 38% Kia 37,011 33,631 36,302 10% 2.0% Mazda 18,813 22,964 21,319-18% -12% Mini 2,543 6,592 3,682-61% -31% Mitsubishi 4,867 6,423 4,659-24% 4.5% Nissan 81,472 96,526 73,793-16% 10% Ram 25,596 34,788 20,669-26% 24% Scion 4,011 4,323 4,893-7% -18% Smart % 8.3% Subaru 33,000 40,172 27,663-18% 19% Toyota 124, , ,621-18% -8.7% Volkswagen 23,494 34,015 29,018-31% -19% Source: Wards Auto Luxury Brand Performance (Units Sold) Change From Jan-14 Dec-13 Jan-13 Ago Year Ago Acura 10,823 15,751 9,489-31% 14% Audi 10,101 17,013 10,056-41% 0.4% BMW 18,253 37,389 16,513-51% 11% Cadillac 11,386 18,165 13,116-37% -13% Infiniti 8,998 13,232 7,126-32% 26% Jaguar 1,347 1,544 1,029-13% 31% Land Rover 4,674 5,764 4,200-19% 11% Lexus 17,637 34,757 16,211-49% 8.8% Lincoln 5,973 7,984 4,191-25% 43% Mercedes-Benz 23,892 35,835 23,578-33% 1.3% Porsche 3,096 3,246 3,358-5% -7.8% Volvo 3,792 4,888 4,875-22% -22% Source: Wards Auto NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 7

8 [ NEW & USED MARKET TRENDS continued ] a total decrease of over 6,000 units. Imports fare better than domestics, see only slight decline Sales for importers exhibited only a small decrease of 1.1% as Asia/Pacific deliveries were down only a marginal 0.2%, with Japan s sales down 0.6% and Korea s up 1.3%. While importers sold more cars than domestics a year ago, the gap increased this January and grew from 89,000 units to 108,000. Out of 15 importers, only six were actually down, but those represented a 7.3% drop while the rest were up 7.1%. Although fewer imports saw diminished sales, they carried more weight with the top two importers, Toyota and Honda, being down 5.3%, collectively. Subaru had another stellar month after driving sales up over 19% as the snow and ice storms that troubled much of the competition appears to have benefited the Out of 15 importers, only six were actually down, but those represented a 7.3% drop while the rest were up 7.1%. eclipsing 90,000 units, a mere 1,161 less than American Honda Motor Co. The success was enjoyed between both brands as well, with Infiniti up 26% on sales just a hair under 9,000 and Nissan up 10% with over 81,000 deliveries, which actually bested the Honda brand by 664 units. Combined Q50 and G sales were up 37% over last year s G deliveries while the QX60 was up 21% over the JX to propel Infiniti s performance while Nissan enjoyed a good month from their Frontier and Juke models, which were up 88% and 46%, respectively. American Honda Motor Co. slowed down and was down 2.1%, but maintained its position over Nissan by the slightest of margins thanks to its Acura brand, which was up 14%. The Honda brand fell by 4% almost exclusively because sales of the Accord were down a significant 14%, with the 3,291 dip in sales for the model reflecting 98.9% of the brand s shortfall in deliveries. Acura was an smaller Japanese automaker. As its product portfolio interesting case being that, excluding the new RLX, all of offers the brand s highly-touted all-wheel drive system the brand s models were down except for the MDX (up nearly across the board, with the lone exception being 65%) and RDX (up 10%) utility vehicles, which grew by a the BRZ sports car, the circus of winter weather could combined 38%. With the new 2015 TLX sedan coming to possibly have played right into Subaru s hands. The next market later this year, it will be interesting to see how the generation 2015 Legacy sedan, touting what is arguably incoming model performs as a replacement for both the its most polished and handsome design ever, was also TL and TSX considering the brand s current reliance on its revealed at last week s Chicago Auto Show and adds to utility vehicles to sustain growth. what has proven to be a remarkable run for the brand. Toyota Motor Sales sputtered to a 7.2% decrease in sales Just like last month, Nissan North America outperformed after having fallen slightly last month as well. Lexus Toyota and Honda with almost 12% growth in January by NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 8

9 Average Incentive Spending [ NEW & USED MARKET TRENDS continued ] performed nicely with 9% growth resulting from huge months from the IX sedan (up 120%) and the GX SUV (up 97%) while Scion was down 18% after its leader from a year ago, the FR-S sports coupe, dropped by 36%. Volume brand Toyota had a disappointing January with sales down 8.7% partly due to falling deliveries of the Camry (down 27%) and Prius (down 26%), but the RAV4 (up 45%) and Highlander (up 21%) utility vehicles did their best to make up the difference. Though the increases in sales were marginal, German luxury automakers, BMW, Mercedes-Benz and Audi, performed well to post improvements year-over-year. Mini sales sank by 31%, but BMW did more than enough to balance things out by increasing deliveries by 11% thanks primarily to the 5-Series and X3, which were up 26% and 35%, respectively. Mercedes sales crept up by 1.3%, but it was mainly due to its new Mercedes-Benz CLA sedan coming to the rescue with 2,433 addition sales as many of the Mercedes models were down. Audi had a mixed month, up a minor 0.4%, but the Q5 (up 18%) and Q7 (up 43%) were instrumental in keeping the brand headed in a positive direction. Incentive spending climbs for the 12th consecutive month While incentives were down 6.3% relative to last month, they represented a 8.7% jump over last January, per Autodata. Dealer, finance and lease subvention were all up, but customer cash, which most negatively impacts used car value retention, fell by 6.2%. It was the first time since last January that automakers pulled back their utilization of customer cash, but on the other hand the increase in the other types of incentives was significant as it was the first time all three were up since December Similar to last month, General Motors cut back on its spending for the most part as the only brand to see an increase was Buick (up 42%), which may help explain why it was able to outperform its GM peers. Lincoln was effective in putting its increased spending to good use as its 5.3% rise in incentives paled in comparison to its 43% sales jump; however, Incentives Average of Total $2,800 $2,700 $2,600 $2,500 $2,400 $2,300 $2,200 $2,100 Source: Autodata YoY Change 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% Percent Change NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 9

10 Days of Supply [ NEW & USED MARKET TRENDS continued ] Ford was unable to do the same with sales down 8.8% despite spending rising by 25%. Notable for Chrysler Group LLC was how Jeep again posted a strong sales month without being reliant on incentives, which were down 15%. Toyota Motor Sales spent more in January, but the payoff was less than ideal as Toyota brand sales fell with incentives up 4.3% while Lexus sales growth lagged behind its spending, which was up 41%. Nissan and Infiniti ramped up incentives by 27% and 29%, respectively, but the automaker reaped the rewards with a noteworthy performance relative to its peers. Interestingly, Acura was the only brand among the Japanese Big Three to cut back, yet it still managed to increase deliveries by 14%; Honda s sales decline outweighed its luxury sibling considering the mainstream brand s 76% leap in spending. As has been the case in past months, Subaru was remarkable in scaling its incentives back by 16% to fall to an industry-low $921 per unit. While the automaker may have been the biggest beneficiary of January s poor winter weather, it has successfully proven for months that it can continue to push its deliveries upward even as its incentives usage diminishes. Jaguar Land Rover had a nice January considering its sales were up 15% while limiting its incentives with the Jaguar and Land Rover brands spending down 3.1% and 31%, respectively. Unfortunately for Volkswagen, despite having the fourth-highest percent increase in spending (up 47%) and sixth-highest total at $2,699 per unit among mainstream brands, the German make had the third-worst sales month, down 19%. Overall new vehicle days supply jumps by 13 days compared to last year Inventory climbed to 89 days of supply in January, up 26 days from December s figure of 64 and also 13 days higher than January 2013 s level of 76 days. Acura stood out as its days supply decreased by 39 days versus prior year and went from having the fourth-highest inventory last January to having the 16th-highest. Lincoln, whose days supply is consistently lofty, was notable in that it managed to New Vehicle Days' Supply Days' Supply Source: Wardsauto.com YoY Change Day Change NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 10

11 [ NEW & USED MARKET TRENDS continued ] lower its inventory level from second-highest a year ago to seventh-highest this year. Jaguar Land Rover was the only European automaker to significantly reduce its inventory level, which fell by 14 days. NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 11

12 Percent Change from Preceding Period [ ECONOMIC TRENDS ] According to the Commerce Department, the U.S. economy expanded at an annual rate of 3.2% in the last three months of 2013 as consumers and businesses largely ignored a government shutdown and fight over the debt ceiling. The pace of growth slowed from 4.1% in the previous quarter, but still means U.S. gross domestic product (GDP) the broadest measure of goods and services produced across the economy grew at an annual rate of 3.7% in the last half of 2013, a pace unseen since A weak first half of the year contributed to a lower annual rate of growth down of 1.9% for 2013, down from 2.8% in The fourth-quarter growth benefitted from healthy gains in consumer spending as 2013 drew to a close. Personal consumption expenditures, which make up more than two-thirds of GDP, rose by an annual rate of 3.3%, the strongest pace in three years. Economists speculated that a hike in payroll taxes at the start of the year, the 16-day government shutdown in October and the still unresolved fight over the debt ceiling would prove a drag on consumer and business spending. However, the latest figures suggest both consumers and businesses largely shrugged off the battles in Washington. For consumers, auto and household goods sales slowed but were offset by purchases of services and nondurable goods including clothing and footwear. Meanwhile, businesses boosted spending at an annualized 3.8% pace, with the bulk coming from investment in equipment. Real Gross Domestic Product Percent change from preceding period (%, SAAR) Hiring was surprisingly weak in January for a second straight month, likely renewing concern that the U.S. economy might be slowing after a strong finish last year. Employers added 113,000 jobs, according to the Labor Department, while the unemployment rate dropped slightly to 6.6%. Job gains have averaged just 154,000 the past three months, down from 201,000 in the preceding three months. The sluggish job growth may reflect what investors and economists are concerned with: the U.S. job market is weakening again, along with sectors like manufacturing and retail sales in the United States and abroad. The weakness might also raise doubts about the Source: U.S. Bureau of Economic Analysis Quarter NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 12

13 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Prior- Change (thousands) Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Unemployment Rate (%) [ ECONOMIC TRENDS continued ] Federal Reserve's plans to steadily reduce its economic stimulus this year. Cold weather was likely a factor that held back hiring in December, though the impact faded in January. Construction firms, which sometimes stop work in bad weather, added 48,000 jobs last month. On a more hopeful note, a survey of service sector companies, including retailers, banks and restaurants, found that they grew faster in January than in December. January s report showed that some higher-paying industries added jobs last month. Factories created 21,000 new positions, while professional and technical services, which include architects and engineers, added 20,000. But health care employment was mostly unchanged for a second straight month, after adding 17,000 jobs a month last year. Retailers cut 12,900 jobs, the most in 18 months, and government shed 29,000 jobs, mostly in education and the Postal Service. January employment data will be read closely by officials at the Federal Reserve, which is determining how quickly to scale back its quantitative easing stimulus program. One more monthly jobs report will be released before the Fed s policy setting committee meets again in March to consider the issue. Last month, the Federal Reserve announced its intention to trim another $10 billion a month, bringing the monthly investment down to $65 billion a month from its giant economic stimulus program. Unemployment and Labor Participation Rates Seasonally Adjusted ly Change in Nonfarm Payrolls Seasonally Adjusted The tapering will be incremental and last most of 2014, economic conditions permitting. What the equity markets heard, however, was the strikingly different tone of analysis from the Fed, which had finally become positive on the economic future. Existing-home sales edged up in December, sales for all of 2013 were the highest since Source: U.S. Bureau of Labor Statistics Source: U.S. Bureau of Labor Statistics Participation Rate Unemployment Rate Labor Participation Rate (%) NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 13

14 Average Price Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Housing Starts (thousands) Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Index Level [ ECONOMIC TRENDS continued ] 2006 and median prices maintained strong growth, according to the National Association of Realtors. Total existing-home sales increased 1% to a seasonally adjusted annual rate of 4.87 million in December from a downwardly revised 4.82 million in November, but are 0.6% below the 4.90 millionunit level in December In 2013, there were 5.09 million sales, which is 9.1% higher than in It was the strongest performance since 2006 when sales reached an unsustainably high 6.48 million at the close of the housing boom. The national median existing-home price for 2013 was $197,100, which is 11.5% above the 2012 median of $176,800 and was the strongest gain since 2005 when it rose 12.4%. The median existinghome price for all housing types in December was $198,000, up 9.9% from December Total housing inventory at the end of December fell 9.3% to 1.86 million existing-homes available for sale, which represents a 4.6-month supply at the current sales pace, down from 5.1 months in November. Unsold inventory is 1.6% above a year ago, when there was a 4.5-month supply. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.46% in December from 4.26% in November; the rate was 3.35% in December The U.S. average retail price of regular gasoline decreased less than one cent to $3.29 per gallon as of Feb. 3, 2014, 25 cents lower than last year at this time. Prices increased 1 cent in the Midwest to S&P/Case-Shiller 20-City Composite Home Price Index Three-month moving average published with a two-month lag Source: S&P Dow Jones Total Housing Starts, Privately Owned Seasonally Adjusted Source: U.S. Census Bureau Regular Grade Gasoline Prices (all formulations) $4.00 $3.90 $3.80 $3.70 $3.60 $3.50 $3.40 $3.30 $3.20 $3.10 Source: U.S. Energy Information Administration Average Price Per Gallon $ YoY Change $0.40 $0.30 $0.20 $0.10 $0.00 ($0.10) ($0.20) ($0.30) ($0.40) ($0.50) Price Change NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 14

15 Average Price [ ECONOMIC TRENDS continued ] $3.23 per gallon, and rose less than a cent on the West Coast, remaining at $3.49 per gallon. The East Coast price decreased 2 cents to $3.36 per gallon, and prices dropped 1 cent on the Gulf Coast and in the Rocky Mountains, to $3.08 per gallon and $3.13 per gallon, respectively. The national average diesel fuel price was up 5 cents to $3.95 per gallon, 7 cents lower than last year at this time. Prices increased in all regions of the nation except the Rocky Mountains, where the price declined less than a penny to remain at $3.86 per gallon. The East Coast price was $4.07 per gallon and the Midwest price was $3.94 per gallon, both up 7 cents from last week. The West Coast price gained 2 cents to $3.99 per gallon, while the Gulf Coast price increased less than 1 cent to $3.78 per gallon. On-Highway Diesel Fuel Prices $4.15 $4.10 $4.05 $4.00 $3.95 $3.90 $3.85 $3.80 $3.75 $3.70 Source: U.S. Energy Information Administration Average Price Per Gallon $ YoY Change $0.20 $0.15 $0.10 $0.05 $0.00 ($0.05) ($0.10) ($0.15) ($0.20) ($0.25) Price Change NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 15

16 [ NADA OFFICIAL USED CAR GUIDE TRENDS ] ly Change in NADA Used Car Guide Value January 2014 v. February 2014 NADA Segment 2009MY 2010MY 2011MY 2012MY 2013MY* Compact Car 1.3% 1.4% 0.8% 0.9% 0.6% Compact Utility 1.5% 0.9% 1.0% 0.6% 0.8% Large Pickup -0.1% -0.2% -0.3% -0.1% 0.0% Large SUV 0.2% 0.5% 0.7% 0.8% 2.1% Luxury Car -0.3% -0.5% -0.1% 0.1% -0.2% Luxury Utility 0.1% 0.4% 0.4% 0.4% 0.5% Mid-Size Car 1.5% 1.5% 1.5% 1.0% 1.1% Mid-Size Utility 1.1% 0.4% 0.8% 0.7% 0.7% Mid-Size Van 1.3% 0.3% 0.6% 0.6% 1.1% *Value movement can be influenced by newly valued vehicles. Annual Change in NADA Used Car Guide Value February, 2013 v NADA Segment 5YR 4YR 3YR 2YR 1YR YTD Change in NADA Used Car Guide Value January February 2014 YoY Segment Change Compact Car -1.2% 2.6% -1.8% 1.0% 0.2% 0.4% Compact Utility 0.6% 1.9% 0.2% -0.7% 1.2% -0.7% Large Pickup 10.7% 5.5% 10.8% 4.6% 5.9% 7.8% Large SUV 3.1% 0.5% 4.6% 3.1% 3.9% 3.4% Luxury Car 0.0% 1.5% -0.5% 8.7% -0.1% 3.0% Luxury Utility 7.5% 3.4% -3.7% 0.6% 1.0% 0.1% Mid-Size Car -2.8% 8.6% -0.3% 2.0% 3.2% 1.7% Mid-Size Utility 5.3% 4.3% 1.8% 0.4% 2.0% 3.4% Mid-Size Van 4.5% -0.7% 11.5% 1.9% 4.9% 2.7% *Calculations are based on vehicle age, i.e. values for 1 year old vehicles in CY2014 are compared against values for 1 year old vehicles in CY2013. NADA Segment 2009MY 2010MY 2011MY 2012MY 2013MY* YTD Segment Change Compact Car 1.3% 1.4% 0.8% 0.9% 0.6% 0.9% Compact Utility 1.5% 0.9% 1.0% 0.6% 0.8% 0.9% Large Pickup -0.1% -0.2% -0.3% -0.1% 0.0% -0.2% Large SUV 0.2% 0.5% 0.7% 0.8% 2.1% 1.0% Luxury Car -0.3% -0.5% -0.1% 0.1% -0.2% -0.2% Luxury Utility 0.1% 0.4% 0.4% 0.4% 0.5% 0.4% Mid-Size Car 1.5% 1.5% 1.5% 1.0% 1.1% 1.3% Mid-Size Utility 1.1% 0.4% 0.8% 0.7% 0.7% 0.7% Mid-Size Van 1.3% 0.3% 0.6% 0.6% 1.1% 0.8% NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 16

17 AT NADA USED CAR GUIDE What s New Available on iphone, ipad and Android devices, the recently enhanced NADA MarketValues is the fastest, easiest and most cost-efficient way to make smart vehicle decisions on the go. This native app allows you to get your NADA values anywhere, anytime without an Internet connection. Subscriptions start at $50 per month and when you download NADA MarketValues from Google Play or the Apple Store for $1.99, you ll receive a FREE 30-day trial! On the Road Larry Dixon, senior automotive analyst, will be attending and speaking at the 2014 Conference of Automotive Remarketing (CAR) in Las Vegas on March 5 March 6, Larry will be speaking on a panel titled Forecast of Residual Values for on Thursday, March 6 at 3:10 p.m. During the session, Larry and other industry experts will provide a forecast of residual values for the wholesale resale market for , setting the stage for the year that attendees can use to prepare their business strategies. NADA Used Car Guide is exhibiting at the Consumer Bankers Association s CBA Live 2014 in Washington, DC on March 31 April 2, Stop by booth #40 to see Dan Ruddy, Steve Stafford, Jonathan Banks and Larry Dixon. NADA President Peter Welch is speaking at CBA Live s Auto Finance Forum at 8:00 a.m. on Wednesday, April 2. Andy Koblenz, general counsel and executive vice president of legal and regulatory affairs, will also be in attendance. About NADA Used Car Guide Since 1933, NADA Used Car Guide has earned its reputation as the leading provider of vehicle valuation products, services and information to businesses throughout the United States and worldwide. NADA s editorial team collects and analyzes over one million combined automotive and truck wholesale and retail transactions per month. Its guidebooks, auction data, analysis and data solutions offer automotive/truck, finance, insurance and government professionals the timely information and reliable solutions they need to make better business decisions. Visit nada.com/b2b to learn more. Financial Industry, Accounting, Legal, OEM Captive Steve Stafford x7275 sstafford@nada.org Credit Unions, Fleet, Lease, Rental Industry, Government Doug Ott x4710 dott@nada.org Automotive Dealers, Auctions, Insurance Jim Dodd x7115 jdodd@nada.org Business Development Manager Jim Gibson x7136 jgibson@nada.org Director, Sales and Customer Service Dan Ruddy x4707 druddy@nada.org Automotive OEMs Stu Zalud x4636 szalud@nada.org PR Manager Allyson Toolan x7165 atoolan@nada.org NADA Used Car Guide 8400 Westpark Drive McLean, VA nada.com/b2b 17

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