Structured Finance. Asset-Backed / U.S.A. Auto Depreciation Rates Low in 2011 and Black Book-Fitch Vehicle Depreciation Report

Transcription

1 Asset-Backed / U.S.A. Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 Vehicle Depreciation Rising in 2013; Elevated Values Still Credit Positive for ABS Special Report Black Book expects vehicle value retention/depreciation rates in 2013 to remain solid but unlikely to show the same levels of strength seen in In turn, Fitch Ratings expects auto loan and lease ABS asset performance to benefit from relatively low depreciation rates in 2013, although an increase in used vehicle volumes into the wholesale vehicle market will push values marginally lower closer to historical norms. In this new quarterly report, Black Book discusses factors that drive vehicle depreciation rates within individual vehicle segments, while Fitch focuses on how recent low depreciation has positively affected used vehicle values and continues to support auto ABS asset performance and ratings in Positive trends emerged over the past two years in vehicle value retention rates for most vehicles in use in the U.S. This is supporting higher recovery rates on defaulted auto loans and strong lease residual values (RVs), limiting auto ABS loss rates and contributing to the solid performance of auto loan and lease ABS. Auto Depreciation Rates Low in 2011 and 2012 According to Black Book, the average vehicle on the road depreciates thousands of dollars in a typical year, equating to 15% 18% in depreciation on vehicle model years However, vehicles on the road depreciated by only 7% on average in The depreciation rate was 12.9% in November 2012 for all vehicles (14.9% for cars and 11.0% for trucks), slightly below the low end of the historical range. Using historical, current, and RV data, along with lagged macroeconomic data, Black Book reported that vehicle values decreased 5.2% during the third quarter of 2012, a more normal level compared with the first two quarters. Black Book expects depreciation rates to rise in 2013 closer to the lower end of the aforementioned 15% 18% range. Related Research Auto ABS Index: In the Auto ABS Driver s Seat (February 2013) U.S. Auto ABS Performance Hit Speed Bump But Likely to be Brief (February 2013) Auto ABS Performance on Track Despite Economic Headwinds (March 2013) Fitch Ratings Hylton Heard hylton.heard@fitchratings.com John Bella, Jr john.bella@fitchratings.com Black Book-Fitch Vehicle Depreciation Report This new Black Book-Fitch Vehicle Depreciation report is a joint-venture by the two companies utilizing Black Book s used vehicle depreciation data. Black Book tracks used vehicle market depreciation rates, providing an understanding of how vehicle prices affect automobile lenders and lessors, auto ABS transactions, consumers, and other auto market constituents. Black Book collects extensive data from auctions around the country. With over 18,000 unique vehicles listed in the primary database of published vehicles up to 15 model years old and the auction and remarketing data consisting of almost 300,000 actual sold vehicle records each month, Black Book editors are able to publish the daily updated used market values. This report discusses month-over-month depreciation of used vehicle values sold at wholesale auctions. Black Book Ricky Beggs rbeggs@blackbook.com Jeff Bunch jbunch@blackbook.com

2 Black Book-Fitch Used Car Monthly Depreciation Rate (2) (4) Compact Cars SUV/Trucks All Vehicles Monthly Vehicle Depreciation Rate Steep climb in gas Feb. to July 2008: $1.00+ July 2008 gas hits $4.11; diesel, $4.76 SUV/Truck rebound after overreaction May 2011 gas hits $3.97 overall strong used market driven by tight supplies Sept gas at $3.88 (6) Gas climbs steadily from Replacements needed due $1.50 in early 2003 to to Hurricane Sandy will (8) $2. in Sept add to traditional first of the year value increase U.S. GDP bottoms (10) 12/06 4/07 8/07 12/07 4/08 8/08 12/08 4/09 8/09 12/09 4/10 8/10 12/10 4/11 8/11 12/11 4/12 8/12 12/12 Sources: Black Book and Fitch Ratings. Depreciation Tracking Near 2% Average monthly depreciation was tracking at 2.1% through November This figure is expected to increase in 2013 as supply volumes rise in the wholesale vehicle market, and used vehicle values moderate further. As displayed in the chart above, the monthly Black Book used vehicle depreciation rate curve tracks the monthly change in the weighted average wholesale values of one-to-five-year old vehicles published by Black Book. The weighting of vehicle values is based on auction sales volumes of used vehicles over the past 12 months. The trend line in the chart above shows the linear trend of the average monthly depreciation of vehicle values, which is currently tracking at an average of 2.1% for the July through November 2012 period. During the past three months, even with high gas prices at the pump, compact cars, entry level cars, entry midsized cars, and upper midsized cars all more fuel efficient models depreciated at inflated levels of 8.6% 6.8%, respectively (at a monthly average of 3.3% and 1.5%, respectively). Due to previously higher retention values of the prior two years and more models and volumes within these smaller, more fuel efficient vehicles, especially compact and entry level cars, current depreciation was greater than earlier in the year. Due to effects of Hurricane Sandy, depreciation rates slowed at the end of A drastic and sustained increase in gas prices, close to the $5.00-plus per gallon level, could reverse this trend. So, now is a good time for consumers, lenders, or dealer, to sell compact and midsized cars. Impact of Depreciation on Auto ABS Related Criteria Rating Criteria U.S. Auto Loan ABS (April 2012) Criteria for Rating U.S. Auto Lease ABS (May 2012) Global Structured Finance Rating Criteria (June 2012) Current low levels of depreciation have resulted in higher recovery rates and lower loss severity in auto loan ABS, ultimately limiting losses. In auto lease ABS, strong RVs are a result of low depreciation rates translating into low transaction losses. Lower depreciation during aided performance in both asset classes, resulting in historically low loss rates in the vintage transactions. In auto loan ABS, vintages produced some of the lowest cumulative net losses (CNL) recorded to date. Auto lease RVs produced only gains each month starting in the second quarter of 2009 through January Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 2

3 Low new and used vehicle supply levels, stable incentives, and low inventories have supported strong used vehicle values over the past two years. Used vehicle values benefited from reduced off-lease vehicle volumes in recent years, keeping supply from this source low. Additionally, the greater availability of consumer credit to purchase and lease vehicles boosted sales levels over the past two years. Much of the interest in consumers purchasing a new or used vehicle during 2012 was from an urgent need, as their current vehicle was older and with significantly higher mileage relative to a normal trade cycle. The average vehicle age is currently years old, well above the historical average. One reason is that new buyers stayed out of the new vehicle market in large numbers from This is evidenced by the fact that new vehicle sales levels were only 10.3 million units in 2009, 11.5 million in 2010, and 12.7 million in 2011, compared with the million in the years prior to With 14.5 million units sold in 2012, such levels should help bring used inventory back to more traditional supply levels. Low Depreciation, Solid Consumer Demand Benefits Auto Loan ABS There is an inverse relationship between the change in vehicle values and the movement in auto loan ABS loss rates; as used vehicle values increase, which essentially results in lower depreciation rates, loss rates decline and vice versa. Fitch s prime annualized net loss (ANL) index hit several new record lows in 2012 before settling at 0.42% in January, 21% lower year over year. The record low for the index was 0.14% posted in June Subprime ANL were at 6.62% through January, 1% above December Subprime ANL hit a high record of 13.1% in early The prime auto ANL chart below shows losses rising rapidly in 2008, while depreciation rates on used vehicles spiked at the same time, averaging 2.% from January 2008 through March These contributed to lower recovery rates on repossessed vehicles, pushing ANL to record highs during that time. ANL rates improved starting in mid-2009, aided by stronger used vehicle values, as evidenced by the lower monthly depreciation of 0.71% per month from April 2009 through November Fitch Prime Auto Loan ABS ANL Index vs. Black Book Used Car Monthly Depreciation Rate Black Book Used Vehicle Dep. Rate Curve (LHS) Black Book Forecast (LHS) Fitch Prime Auto Loan ABS ANL Index (RHS) (2) (4) (6) (8) (10) 1/07 4/07 7/07 10/07 1/08 4/08 7/08 10/08 1/09 4/09 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/ Source: Black Book and Fitch Ratings. Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 3

4 Fitch Subprime Auto Loan ABS ANL Index vs. Black Book Used Car Monthly Depreciation Rate Black Book Used Vehicle Dep. Rate Curve (LHS) Black Book Forecast (LHS) Fitch Subprime Auto Loan ABS ANL Index (RHS) (2) (4) (6) (8) (10) 1/07 4/07 7/07 10/07 1/08 4/08 7/08 10/08 1/09 4/09 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/ Source: Black Book and Fitch Ratings. Further, solid collateral characteristics, including strong credit quality, resulted in the vintages producing historically low loss rates. Fitch expects ANL of 0.50% 1.20% in 2013, while the outlook for asset performance is stable. The rating outlook for prime auto loan ABS is positive for 2013, and Fitch expects the number of positive rating actions will pick up this year due to the increased volume of transactions up for review, and given that loss rates are currently running lower than initial expectations. Auto Lease ABS Recording Monthly Residual Gains; Expected to Slow in 2013 RV in auto lease ABS have recorded double-digit gains since 2010; however, Fitch expects RV gains to continue to moderate in 2013 as depreciation rates increase. Fitch s auto lease RV loss index recorded an 11.0% gain through December 2012 after hitting a high of 17.6% in 2012 (record high was a 29.2% gain in March 2011). The index has posted gains in each month since June 2009, supported by very low off-lease volumes as a result of new vehicle sales and lease origination volumes during The index registered a record high RV loss rate of 20.7% in November 2008 during the depths of the financial crisis and turmoil in auto industry. Large volumes of off-lease vehicles originated in flooded the market at that time, driving used vehicle supply to very high levels. At the same time, consumer demand for new and used vehicles plunged and the consumer credit market shrank rapidly. Fitch s RV loss index and Black Book s used vehicle depreciation rate curve are displayed in the chart on page 5. The indices exhibit similar patterns of wholesale vehicle market strength and weakness, although the depreciation rate curve exhibits slightly larger volatility swings. Fitch expects auto lease ABS transactions to benefit from relatively healthy RVs in However, RV realizations are expected to moderate from recent highs and return to normal levels over the next few years due to increased new vehicle sales and higher lease volumes. As increased lease residual maturities enter the market in 2013 and 2014, this higher supply may pressure wholesale vehicle prices. Fitch s 2013 outlook for asset and ratings performance remains stable for auto lease ABS. Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 4

5 Fitch Auto Lease ABS RV Loss Index vs. Black Book Used Car Monthly Depreciation Rate Black Book Used Vehicle Dep. Rate Curve (LHS) Black Book Forecast (LHS) Fitch Auto Lease RV Loss Index (Loss)/Gain (RHS) (2) (4) (6) (8) (10) 1/07 4/07 7/07 10/07 1/08 4/08 7/08 10/08 1/09 4/09 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/ (1) (2) (3) Source: Black Book and Fitch Ratings. Depreciation Up in 2013 Used vehicle values depreciated approximately 1.5% a month historically with seasonal volatility, along with swings caused by specific, sudden events, such as rapid changes in gas prices. Depreciation rates rose in recent months, and this trend should continue in early An increase in used vehicle inventory is driving this increase, combined with greater demand for and sales of new vehicles. Additionally, unusual seasonal strength in the second part of November and the first three weeks of December due to the extra demand caused by Hurricane Sandy helped bolstered vehicle values. The volatility in monthly depreciation is even higher when analyzing specific vehicle segment depreciation rates. Depreciation rates among the segments do not move in tandem/parallel. In fact, there have been several instances in the past when depreciation rates of trucks moved in the opposite direction of compact cars. Due to the high volatility, businesses ranging from new and used car dealerships to rental and auto finance companies pay much closer attention to short- and long-term vehicle values depreciation curves. Truck Values Exhibit Volatility; Most Segments Currently Strong Prior to 2008, there was much less volatility in vehicle values. Since 2008, truck values in particular have displayed significant volatility. Of note, different car and truck segments now show separation in the value curves, and many vehicle segments have experienced low to no depreciation for unprecedented periods. Since the mid-may 2012, depreciation has increased, contrary to the first half of the year. Black Book expects this trend to continue as the supply of used vehicles gradually increases from the lows of Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 5

6 Value Index of 2005 Year Cars: Depreciation Curves Entry Level Car Entry Midsized Car Sporty Car Full-Size Car Luxury Level Car Near Luxury Car Compact Car Upper Midsized Car All Cars /07 6/07 11/07 4/08 9/08 2/09 7/09 12/09 5/10 10/10 3/11 8/11 1/12 6/12 11/12 Value Index of 2006 Year Cars: Depreciation Curves Entry Level Car Sporty Car Luxury Level Car Compact Car All Cars Entry Midsized Car Full-Size Car Near Luxury Car Upper Midsized Car Value Index of 2005 Year Trucks: Depreciation Curves Compact Pickup Compact SUV Compact CUV Full-Size Pickup Full-Size SUV Full-Size Vans Full-Size CUV Luxury SUV Midsized Pickup Midsized SUV Mini Van Wagon Midsized CUV All Trucks /07 6/07 11/07 4/08 9/08 2/09 7/09 12/09 5/10 10/10 3/11 8/11 1/12 6/12 11/12 Value Index of 2006 Year Trucks: Depreciation Curves Compact Pickup Compact SUV Compact CUV Full-Size Pickup Full-Size SUV Full-Size Vans Full-Size CUV Luxury SUV Midsized Pickup Midsized SUV Mini Van Wagon Midsized CUV All Trucks The climb in car values from July to September 2008 was an overreaction to gas prices, causing an opposite mirror reaction when gas prices fell back down to $ vintages experienced solid value retention due to tight supplies, as shown in the chart on pg. 9. Spring 2011 again exhibited stability in the car depreciation rates due to the rising gas prices and limited supplies. Truck values displayed tremendous varying trends, as these vehicles were adversely affected by gas prices and a struggling economy, including weak housing and construction sectors and service industries that rely heavily on these larger vehicles. Housing, Service Industries A Net Positive for Larger Vehicles Black Book expects trucks to have stable retention and depreciation rates in 2013 due to balanced production levels relative to demand over the past two years. Demand for trucks should strengthen as the housing and service industries recover further, which will reduce depreciation levels. Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 6

7 Value Index of 2007 Year Cars: Depreciation Curves Entry Level Car Sporty Car Luxury Level Car Compact Car All Cars Entry Midsized Car Full-Size Car Near Luxury Car Upper Midsized Car 130 1/09 6/09 11/09 4/10 9/10 2/11 7/11 12/11 5/12 10/12 Value Index of 2008 Year Cars: Depreciation Curves Entry Level Car Entry Midsized Car Sporty Car Full-Size Car Luxury Level Car Near Luxury Car Compact Car Upper Midsized Car All Cars 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 Value Index of 2007 Year Trucks: Depreciation Curves Compact Pickup Compact SUV Compact CUV Full-Size Pickup Full-Size SUV Full-Size Vans Full-Size CUV Luxury SUV Midsized Pickup Midsized SUV Mini Van Wagon Midsized CUV All Trucks 130 1/09 6/09 11/09 4/10 9/10 2/11 7/11 12/11 5/12 10/12 Value Index of 2008 Year Trucks: Depreciation Curves Compact Pickup Compact SUV Compact CUV Full-Size Pickup Full-Size SUV Full-Size Vans Full-Size CUV Luxury SUV Midsized Pickup Midsized SUV Mini Van Wagon Midsized CUV All Trucks 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 Black Book expects a temporary additional boost in truck and van values due to sudden demand to replace vehicles in the construction and service industries as a result of the wide path of destruction from Hurricane Sandy. A vehicle market that experiences strength will always have a period of adjustment to return to its fundamental trends. Variation from used vehicles to new vehicles will balance out, driven by the price differentiation between the two. The truck market generally displays more volatility due to the types of vehicles included; for example, a compact crossover serves a much different need functionally than a full-size cargo van or three-quarter ton pickup truck. Later model vehicles, cars, and trucks generally display greater depreciation and, thus, create differentiation from new models. As the vehicles age, depreciation rates slow in both cars and trucks, as the 2011 vintage vehicles reflect. Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 7

8 Value Index of 2009 Year Cars: Depreciation Curves Entry Level Car Entry Midsized Car Sporty Car Full-Size Car Luxury Level Car Near Luxury Car Compact Car Upper Midsized Car All Cars 11/10 2/11 5/11 8/11 11/11 2/12 5/12 8/12 11/12 Value Index of 2009 Year Cars: Depreciation Curves 11/10 2/11 5/11 8/11 11/11 2/12 5/12 8/12 11/12 Compact Pickup Compact SUV Compact CUV Full-Size Pickup Full-Size SUV Full-Size Vans Full-Size CUV Luxury SUV Midsized Pickup Midsized SUV Mini Van Wagon Midsized CUV All Trucks Truck and SUVs Increasing in Auto ABS Pools Auto loan ABS pools with high concentrations of particular vehicle segments are vulnerable to greater swings in vehicle depreciation rates. A pool with high concentrations of trucks or SUVs historically have exhibited sensitivity to higher gas prices and driven volatility in depreciation rates of these less fuel efficient segments. Truck sales accounted for 54% of total sales in 2012, up from 52% in Trucks and SUVs totaled approximately 59% of auto loan and lease collateral ABS pools rated by Fitch in 2012, up from 54% in 2011 transactions. Historically, different vehicle segments depreciated at a similar pace, but trends in the last three years have shown that depreciation rates across vehicle segments could be substantially different. Annual Depreciation Is On the Up Annual depreciation of late model vehicles exhibit significantly larger levels of depreciations. This is due to a greater push for differences in new versus used vehicles, as new vehicle sales continue to increase. Certain manufacturers are even using higher incentives for particular models, with elevated inventory levels to increase sales and reduce stocks. One-year-old vehicle depreciation rates more closely resemble depreciation rates of 2005, which more closely resemble a similar production to sale ratio. Annual Depreciation of One-Year Old Vehicles (5.00) (1) (15.00) (2) (25.00) (3) Nov Nov Nov Nov Cars Nov Nov Nov Nov Trucks Nov Nov Nov Nov Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 8

9 Annual Depreciation of One-Year Old Cars: Entry Level vs. Full Size (5.00) (1) (15.00) (2) (25.00) (3) (35.00) Nov Nov Nov Nov Entry Level Cars Nov Nov Nov Nov Full Size Cars Nov Nov Nov Nov Black Book projects new car sales of 15.3 million units in 2013, which should climb to 16 million units or more in This approaches the 16.5 million unit level akin to more traditional sales levels, which should result in more traditional used vehicle depreciation levels over time. Fitch s prediction for new vehicle sales is 15.0 million units in Annual Depreciation of One-Year Old Pickups: Compact vs. Full Size (5.00) (1) (15.00) (2) (25.00) (3) (35.00) Nov Nov Nov Nov Compact Pickup Nov Nov Nov Nov Full Size Pickup Nov Nov Nov Nov Data Available to Users Certain data contained in this report are available to all users, including the charts and tables (see Black Book or Fitch contacts listed on page 1). Black Book Auto Remarketing Report This quarterly special report (separate to this report) exhibits monthly vehicle segment values, including month-over-month and year-over-year data. Both the actual data and graphs will be available through Black Book at About Fitch Group Fitch Group is a global leader in financial information services with operations in 34 countries. It includes Fitch Ratings, Inc., a global leader in credit ratings and research; Fitch Solutions, a leading provider of credit market data, analytical tools and risk services; and Fitch 7city Learning, a global leader in financial training. Fitch Group is 50% owned by Paris-based Fimalac, S.A. and 50% owned by New York-based Hearst Corporation. Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 9

10 About Black Book Best known in the automotive industry for providing timely, independent, and accurate vehicle pricing information, Black Book data are published daily by National Auto Research, a division of Hearst Business Media, and are available to industry qualified users through subscriptions to its Web site ( Black Book data are also available to industry qualified companies for license and sublicense through proprietary Web services, APIs, and data feeds. Whether a company is buying, selling, or lending, Black Book s mission is to provide the automotive industry with timely, independent, and accurate information to help make the right decisions ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. Copyright 2013 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. One State Street Plaza, NY, NY 04.Telephone: , (212) Fax: (212) Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings, Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreedupon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch s ratings should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings can be affected by future events or conditions that were not anticipated at the time a rating was issued or affirmed. The information in this report is provided as is without any representation or warranty of any kind. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion is based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at anytime for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$0,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. Black Book/Fitch Book Vehicle Depreciation Report: 4Q12 10