NADA Guidebook Update NADA Official Used Car Guide. Intermediate Compact -0.6% -0.5% -0.2% -0.2% -0.8% month and will help solidify the year-to-date

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1 Guidelines July 2010 NADA Used Car Guide Industry Update IN THIS ISSUE: NADA Official Used Car Guide Update ATD/NADA Official Commercial Truck Guide Update The Increased Importance of New Vehicle Design Segment Spotlight: Subcompact & Compact Cars AuctionNet Wholesale Market Trends NADA Returning Supply Forecast NADA Fuel Forecasts Retail Market Indicators Economic Drivers NADAguides.com Consumer Site Trends At NADA Used Car Guide NADA Guidebook Update NADA Official Used Car Guide For July 2010 s edition, NADA has included values on more than MY models, which is a 35 increase over the 2009MY. More than one-third of all 2010MY models in the NADA Used Car Guide now have a value, representing ~9 of all used vehicles that have been moved through remarketing channels so far this year. July should see minor (0-to-2%) value depreciation in most sub-segments, with the greatest depreciation coming on 2009MY and 2010MY vehicles. Much of this value loss is due to pricing and financing pressure from new vehicles forcing down the value of their near-new counterparts. This being said, depreciation is tracking lower than seasonal expectations as ly Change in Average UCG Value: NADA Segment June 2010 v. July 2010 constricted supply has helped values remain relatively strong compared to historical norms. The large van segment is one notable exception bucking the value depreciation trend. Almost all model years have experienced little if any value depreciation for the NADA Segment Compact CUV Compact Pickup Compact SUV Entry Compact Entry Subcompact 2005MY -1.7% 2006MY -1.1% 2007MY -1.3% -0.1% -1.9% 2008MY -0.9% 2009MY* -0.8% -2.7% -1.1% Intermediate Compact -0.8% month and will help solidify the year-to-date Intermediate Large 0.3% 0.2% -0.8% appreciation the segment has experienced. Intermediate Mid-Size -0.1% -0.7% While prices have increased on both cargo vans and people movers, cargo van strength may be a result of increased commercial buyer demand as they look to replace their Intermediate Subcompact Large Pickup Large SUV Large Van -0.4% -0.1% 0.2% 0.5% 0.4% 0.1% 0.3% Luxury Compact -0.1% 0.4% aging fleets with relatively inexpensive used Luxury Large -0.1% -0.8% vehicles. Many large SUVs will also see a minor Luxury Large Pickup -0.4% -0.4% -0.4% -0.1% lift or very little value depreciation in July as segment supply remains tight in both the new and used markets. Luxury Large SUV Luxury Mid-Size Luxury Mid-Size CUV -0.7% -1.1% -1.8% -1.9% -0.9% -2.2% -0.4% Luxury Mid-Size SUV -0.4% -0.8% -0.4% -0.8% Fuel prices have remained steady with prices holding steady below $3 p/gal, thereby stabilizing consumer interest across all segments. The price of regular grade gasoline rose to Mid-Size CUV Mid-Size SUV Mid-Size Van Near Luxury Compact -0.8% % -0.7% -0.8% -0.8% 0.1% 0.2% -1.1% -1. over $3 p/gal for the first time during the Near Luxury Mid-Size -0.8% -0.9% -0.8% -1.1% Premium Luxury Compact week of 9/5/2005, the week after Hurricane Katrina wreaked havoc over much of the gulf coast region. From that point through the majority of 2008, gas prices were extremely volatile moving around the $3 level in a sporadic Premium Luxury Large Premium Luxury Large SUV Premium Luxury Mid-Size Premium Luxury Mid-Size CUV Upper Compact -0.7% -0.1% -0.7% -0.7% -0.1% -1.4% -1.4% -1.4% -0.4% -0.4% manner and eventually cresting at $4.11 Upper Large 0.1% % -0.8% Upper Mid-Size -0.9% -0.7% -0.9% -0.7% p/gal in July Since October 2008 however, Upper Subcompact 0.9% 0.5% gas prices have remained below $3 p/ *Value movement can be influenced by newly valued vehicles. See the last page of "Guidelines" for data key. gal, marking the longest, most stable period of gas prices in the past five years. This most likely has allowed consumers to better budget their transportation needs and has fostered the return to the larger, less fuel-efficient trucks that were pronounced dead in the summer of The most recent auction prices are beginning to suggest that we may have begun to return to actual price depreciation in many sub-segments across the majority of model years. July s slight adjustments may be followed by less tempered downward adjustments in August and into the Fall if this pattern continues. 1

2 Percentage Sold Per Dealership NADA Guidebook Update ATD/NADA Official Commercial Truck Guide April and May selling prices exhibited further increases for most segments of the Class 8 market, and NADA responded by substantially increasing valuations for July nearly across the board. These increases come on top of upward adjustments already made for the May and June editions. Essentially, any Class 8 highway tractor with lower than average mileage is commanding a strong price. The meat and potatoes of the market highway sleeper tractors with average mileage are also holding their own after enjoying boosted selling prices throughout the Spring. Retail sales per dealership dropped by a minor amount compared to April, with sales down approximately 5% (fig. 1). After a massive increase in March followed by another substantial increase in April, it is not surprising that sales per dealership would level off. It is possible that many buyers completed the bulk of their acquisitions in the Spring, taking a good portion of the low mileage iron out of the marketplace. Since March, our reporting dealers have been selling more trucks on average than at any time in As for the medium duty market, we continue to observe an upward trend in selling prices for the lighter GVW classes of conventionals. It is possible that the various users of light commercial vehicles are tip-toeing back in to the market after putting off their purchases for the past year due to economic conditions. It is also possible that some buyers in this segment are looking at late-model, low-mileage trucks instead of new for much the same reasons as their Class 8 counterparts namely, higher MSRP s of new vehicles and uncertainty about the SCR technology found in some medium duty trucks. One other factor to keep in mind is that the exit of GM from the medium duty market has resulted in fewer options for new truck intenders, although there is not yet any evidence that there is a shortage of available new trucks. 4 35% 3 25% 2 15% 1 5% -5% -1-15% -2 Source: NADA Figure 1 over Change in Number of Used Trucks Sold Per Dealership (Retail) Calculated by dividing the total number of used trucks reported sold by the number of reporting dealerships. ly Change in Average CTG Value: NADA Segment June 2010 v. July 2010 NADA Segment 2005MY 2006MY 2007MY 2008MY* Commercial Van 0.8% 0.7% 1.6% 4.5% Extended Hood 15.9% 11.7% 4.7% 2.7% Highway Aerodynamic 3.5% 9.9% % Highway Traditional 17.7% 15.3% 7.1% 3.9% Local/Delivery Daycab 7.9% 8.6% 4.2% 1.8% Medium Duty Cabover % 0.4% 0.7% Medium Duty Conventional 7.5% 7.9% 4. Vocational/Construction *Value movement can be influenced by newly valued vehicles. See the last page of "Guidelines" for data key. Fundamentally, the used truck environment should be on strong footing for the rest of the year. The extremely low new truck sales rate from will provide the secondary market with very few late-model, low-mileage trucks, and demand for equipment is steadily increasing as evidenced by sales of new trucks each month this year. While the overall economic picture is still mixed, with consumer activity continuing to struggle and industrial exports potentially leveling out, the basic supply/demand relationship of the used truck market should be favorable enough to counteract these forces. In sum, the low supply of used trucks is the market s trump card. 2

3 Frequency Percent of Intenders The Increased Importance of New Vehicle Design New vehicle design a decade ago did not receive the same attention from manufacturers that it requires today. Surprisingly, in the early 2000 s consumers were willing to tolerate brand engineering and the resultant lackluster designs. As competitive pressures have mounted and the domestic brand engineering strategy has proven unprofitable, we are moving into a new paradigm where differentiation between brands is paramount. Global design resources are leveraged to ensure new models are addressing consumer desires from styling, performance, and technology standpoints, thereby raising the bar in virtually every vehicle segment. While affordability will always remain one of the most important attributes affecting a consumer s decision to purchase a new or used vehicle, the emotional appeal of overall styling and design remain a primary purchase decision for consumers. A review of CNW data backs up this claim. Over the last four years, only fuel economy (+36%) and low monthly payments (+5%) have grown more than overall exterior styling (+4%) in terms of importance. In fact, for the last two years styling has actually surpassed quality in terms of attribute importance, and is ranked just behind affordability as the second most important attribute considered in a vehicle purchase (fig. 1) % 96% 94% 92% 9 88% 86% Attributes Considered Important: Annual Trend Overall quality Overall exterior styling Much of this is due to the more-or-less level footing OEMs are on with regard to quality. The perception that import OEMs, especially those from Japan, build vehicles superior in quality to their domestic counterparts is being replaced by the reality that brands from all countries build vehicles that are considerably more durable and trouble-free than those built a decade ago. 84% 82% Calendar Year In addition, the trouble experienced by Toyota earlier this year helped to expose this trend as consumers were almost forced by the Source: CNW Figure 1 J.D. Power Initial Quality Scores (IQS) 2005 v media to take a closer look at manufacturer quality performance. A comparison of J.D. Power s Initial Quality Score (IQS) results from 2005 versus the recently released 2010 results highlights this quality parity Source: J.D. Power IQS Score Figure 2 More than 5 of the brands included in the 2010 survey have scores between 111 and 130, compared to only 4 in the 2005 survey (fig. 2). When outliers are removed, the overall distribution for 2005 was much more dispersed than it is for It also bears noting that for 2010 there is global representation by brands with scores below 110, as Ford, Lincoln, Volvo, and Hyundai co -mingle with mainstays Porsche, Acura, Lexus, and Honda. 3

4 New Vehicle Design (continued ) With quality efforts clearly on the right track, design is playing more of a critical role in influencing a vehicle purchase. Increasingly manufacturers understand the opportunity that an all-new launch or a redesign presents to the fortunes of a particular model and even the brand itself (see sidebar). The probability of increased new sales, elevated brand awareness, reduced incentives and subvention, and stronger used vehicle retention (which feed higher residuals) will be raised with catching design. Two recent design winners the 2009 Hyundai Genesis as an all-new entrant and the 2009 Mazda MAZDA6 as a redesign illustrate this. Hyundai, historically a design-deficient brand, has won accolades for its Genesis model, including 2009 North American Car of the Year and J.D. Powers 2009 Automotive Performance Execution and Layout (APEAL) award for Midsize Premium cars, both firsts for Hyundai. In addition, the Genesis has enjoyed strong used value retention and is only 1 PP behind the segment leading Audi A4 and, somewhat surprisingly, 5 PPs ahead of the third place Lexus ES. The 2009 Mazda MAZDA6 is an example where a thoughtful redesign can significantly reposition a model in terms of used vehicle retention within its competitive set. When the outgoing design was first released for the 2003MY, it was a dramatic departure from the 626 model it replaced and moved Mazda s mid-size car retention from Honda s decision to delay the launch of the redesigned Honda Civic by one year to 2011 is a perfect case-in-point. Considering the onslaught of upcoming all-new or redesign launches in the Civics competitive set Chevy Cruze ( 11), Hyundai Elantra ( 12), Chrysler compact (FIAT based; 14), Ford Focus ( 12), Chevy Aveo ( 12), Mitsubishi Lancer ( 13), Nissan Sentra ( 12), Suzuki SX4 ( 12), and VW Jetta ( 11) it s obvious that the ante will be upped significantly and that the Civics prominent position atop the segment can no longer be assumed. Given this, it makes sense for Honda to take more time in the development of the new Civic in an effort to get everything right. the depths of the segment to squarely in the middle. The MAZDA6 retained this position throughout its lifecycle, primarily due to Mazda s brand awareness at the time, as well as its lack of size relative to segment leaders Camry and Accord. Mazda s designers addressed the size concern for the 09 redesign by making the new car considerably larger and played to Mazda s zoom-zoom image by giving the MAZDA6 an appealing, sporty appearance which differentiated it from other models in the segment. The gain in used value retention for the redesigned model has been dramatic, with an increase of 6 PPs over the outgoing design s position relative to the segment average. Instead of occupying an average position of retention strength, the MAZDA6 is now behind only segment leaders Honda Accord and Nissan Altima and ahead of both the Toyota Camry and Ford Fusion (fig. 3). Mazda has continued their run of design success with the launch of the redesigned 10 MAZDA3 (which has already garnered multiple awards) and the upcoming release of the 11 MAZDA2. Strategically sequencing strong design launches in this manner can lead to a repositioning of the brand in eyes of the consumer. In summary, in an era of increased new price and quality parity, progressive product design will play more of a critical role in a consumer s decision to purchase a particular model, and as such, manufacturers will have to approach design strategy accordingly. Well received new model designs will more and more be separated from the pack in the form of increased demand and stronger used vehicle retention, while those OEMs able to hit on an overarching brand design philosophy will reap the additional benefits associated with increased brand awareness. Honda Accord Nissan Altima Mazda Mazda6 Toyota Camry Ford Fusion Subaru Legacy Hyundai Sonata Chevy Malibu Kia Optima Pontiac G6 Chrysler Sebring Dodge Avenger Mitsubishi Galant Saturn Aura 2009MY Used Value Retention: Intermediate Mid-Size Relative to Segment Average Source: NADA Official Used Car Guide Figure % 5% 1 15% PP from Segment Average 4

5 Percent Change (1/2010 = 0) Price p/gal. Segment Spotlight: Subcompact & Compact Cars The subcompact and compact car segments have enjoyed a demand resurgence driven by increased vehicle production to meet public demand for inexpensive and fuel-efficient vehicles, imminent changes in CAFÉ standards, and the long-run upward trend in gas prices. Like the Large Pickup and Large SUV segments, subcompact and compact cars are sensitive to changes in fuel price, but unlike the negatively correlated relationship the large truck segments have with fuel prices, the relationship with the small car segments is a positive one. NADA has developed a model to provide guidance on price changes for subcompact and compact cars which is based on time-series observations used to measure the relationship between the price of gas and the average used price of compact vehicles. NADA s statistical gas price/auction price model shows that after gas prices exceed $3.00 per gallon, vehicles in compact car segments will gain approximately $900 in value per dollar increase in gas price. Price fluctuations below the $3.00 point also affect used compact car prices, but the effect is diminished (fig.1). Allowing for several months lag as consumers evaluate the relative permanence of high gas prices, it can be seen that as fuel prices move up, the demand for fuel-efficient vehicles increases and drives up used prices. $4.25 $4.00 $3.75 $3.50 $3.25 $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 $1.50 $1.25 Source: Moodys, AuctionNet Regular Gas $ Compact Car Price Changes v. Gas Prices* Vehicle Age 1-to-60 mo. *Prices have been adjusted for Mileage Compact Car Segments Price Change Index (1/06 = 0) During the first half of 2008, for example, the Figure 1 national average price of regular gas increased from $3.02 in January to $3.99 by June. This 24% fuel price increase encouraged a 14% increase in used auction prices for compact segments, compared to a 4% increase in all car segments and a 21% decline in used prices for SUVs. With the subsequent fuel price relief in the second half of the year in which gas prices dropped 14 by December from their peak in July, compact segment auction prices dropped 4, compared to 22% for the entire car segment and 3% for SUVs. Although the decline in used prices was exacerbated by the poor economic climate in the latter half of 2008, the comparative performance between segments is indicative of the heavy effect of gas price s on auction price performance. Year-to-date, auction prices of compact cars have generally increased, with prices enjoying a year-over-year premium compared to calendar year This is largely due to increases in gas prices since January and to partial recovery of the automotive market. Somewhat surprisingly, traditional segment leaders appear to lag the recovery of the segment as a whole, but this lack of price recovery is largely due to two factors: they already outperformed their competition so there was less recovery to be made and secondly, in the case of Prius and Corolla, highly publicized braking system problems caused temporary downturns in used demand and prices at the beginning of the calendar year (fig. 2). 2 15% 1 5% -5% -1-15% Source: AuctionNet Compact Seg Corolla Civic Prius Auction Price Changes: Relative to Jan MY Figure 2 5

6 Percent Change Percent Change Subcompact & Compact Cars (continued ) In addition to gasoline prices, future price performance of compact cars is going to rely on used vehicle supply. In the near term, NADA anticipates a significant increase in compact car volume returning to the used market (fig. 3). Production and sales volume of compact cars in the United States have been increasing steadily over the last five years (with the exception of the dismal 2009 market) as manufacturers have responded to continued increases in segment demand. Additionally, forecasted production and sales increases in compact segments are projected to outpace other segments from 2011 to 2015, indicating that used volume will continue to increase in the mid- to long-term (fig. 4). The anticipated continued increases in production and sales should soften the high value retention recently enjoyed by the compact car segments as OEMs build and sell more small cars. Much of the future performance of used values is going to depend on how skillfully OEMs are able to anticipate demand and build cars that are in line with fuel efficiency expectations should gasoline prices increase again and which are functional and desirable alternatives to car choices in other segments. Manufacturers have made significant progress in the latter, debuting well-received subcompact and compact cars like the Nissan Cube, the Kia Forte, and Honda Fit and showing impressive future products like the 2011 Chevrolet Cruze, 2011 Fiat 500, and 2011 Ford Fiesta Source: Global Insight Figure 4 OEMs have shown interest in selling vehicles that are, in addition to being fuel-efficient, stylish and have amenities previously unobtainable in small car segments, such as advanced automatic transmissions, entertainment and navigation systems, and leather seating. These improvements in product quality and features will likely result in conquest sales from mid-size segments as consumers move into small car segments, but it would seem that manufacturers have anticipated this and have increased production plans as well. This should prevent any supply shortages which drive up used prices. While product quality and consumer interest have increased in the segment, any real gains in used values should be offset by increased production and anticipated stable fuel prices in the near- to mid-term. Because the most significant influence on segment values are gas prices, any noteworthy increase, especially beyond the $3.00 per gallon mark, will undoubtedly have a positive effect on used values. 2 15% 1 5% -5% -1-15% -2 Source: R.L. Polk, NADA Figure 3 New Vehicle Sales Forecast: YoY Change Calendar Year NADA Returning Used Supply Forecast: Compact Car Segments YoY Change - All Registration Types Total Market Compact Segs Total less Compact 6

7 AuctionNet Wholesale Market Trends Used prices on two and three year old models in June showed moderate declines for most segments; however auction prices on one year old models (2009MY), which are generally daily rental returns, experienced fairly dramatic drops compared to prior months. Four and five year old model prices also began to slip following steady increases throughout the year. This was especially evident on small cars, where sale price performance has been relatively lackluster during this period of gas price stability. On the luxury front, AuctionNet prices fell across the board with notable declines on luxury SUV and CUV models, driven in large part by sharp May-to-June drops of 12% on the 2009 BMW X5 and 7% on the 2009 Cadillac Escalade. Generally speaking however, used car prices for the year still remain positive as 2010 has shown a continuation of the huge gains witnessed during 2009, albeit in milder form. Benchmark indices confirm this, with Manheim s Used Vehicle Value Index reaching a record high and the BLS Used Vehicle CPI component showing positive movement every month this year. We expect a pull-back on these indicators for June, but overall prices will remain strong and on average will outperform expected seasonal declines. Sales volumes on 1-5 year old vehicles at auction remains low, especially on trucks, SUVs, and vans. This is particularly evident on 2-4 year old SUVs, trucks and vans where the availability of these high demand used products remains very tight and are down on a year over year basis. In contrast, overall returning used supply on a month-to-month basis started an upward trend in May that will continue through July. However, total returning used supply for the full year will be down ~4% relative to 2009 (see p. 9); as such, these volume increases are not likely enough to create a substantial drag on prices. Notable segments to watch from a supply standpoint include the midsize CUV segment, particularly the Toyota Highlander and the Chevrolet Traverse (which has the largest year-over-year increase at ~2), and the intermediate compact and intermediate mid-size segments which include high volume models like the Civic, Corolla, Focus, Malibu, Accord and Camry. Driven primarily by off-rental returns, these segments are expected to peak in used supply during August, right when manufacturers begin to start introducing incentives to clear inventory before new model introductions. New June retail sales, although disappointing compared to expectations, have not created a glut in inventory and overall day s supply remains at reasonable levels (see p. 11). Some of the decline in new car sales can be attributed to the pull-back in incentive spending during June removing many apprehensive consumers from the new car market. However the main driver is the uncertainty in the economy. The dramatic 9.8 PP decline in consumer confidence during June correlates with the relatively dismal June sales and attests to increased apprehension from consumers in regards to making large purchases. This essentially points to the need to create more stimuli to assuage consumer fears and uncertainty and stimulate action to make a vehicle purchase. 0.4% 0.2% -0.4% -0.8% ly AuctionNet Price Change: 1 to 5 yr. Old Vehicles* May-10 vs Jun-10 Car CUV Pickup SUV Van *Figures have been adjusted for both Mileage & Mix YoY AuctionNet Price Change: 1 to 5 yr. Old Vehicles* Jun-09 vs Jun-10 Car CUV Pickup SUV Van *Figures have been adjusted for both Mileage & Mix 7

8 AuctionNet Wholesale Market Trends (continued ) Before June the outlook was much more sanguine with demand stimulating sales in line with analyst expectations and which lead to strong transaction prices, low dealer inventories, and plans for increases in manufacturer production. This coupled with short supply in the used market likely would have stimulated even more price increases on used models if the job market had improved. The relatively negative news during June is not considered a cause for alarm at this point since fundamentals still point to overall improvement in the economy. In Paul Taylor s Economic Update he supports a quick rebound in new vehicle demand stating, NADA estimates that chance *of a double dip recession] at no more than 15 percent, versus the 85 percent probability that economic recovery continues at a modest pace. News on home prices stabilizing for the second quarter will help underpin car sales, since most households have most of their net assets represented by home equity. Taylor concludes with another upbeat statement where he explains, As confidence improves and the staying power of economic growth becomes more evident during July, expect to see strong monthly new light vehicle sales from July through the end of the year. Another example of positive news for new car sales is in the notes from the University of Michigan s Consumer Sentiment Survey suggesting that demand has improved for some consumers, stating that among consumers with incomes over $75,000, buying plans for vehicles rose to their most favorable level in nearly five years These gains were contingent on the availability of price discounts two-thirds of high income households mentioned price discounts for vehicles and nearly half for durables. In addition, new luxury import sales grew month-over-month and year-over-year. As four of only a dozen brands to do so, BMW, Land Rover, Jaguar, and Porsche all recorded higher sales in June relative to May. ly Change in Average AuctionNet Price: NADA Segment May 2010 v. June 2010 NADA Segment 2005MY 2006MY 2007MY 2008MY 2009MY Compact CUV -1.5% -2.4% -1.6% Compact Pickup -1.8% -0.4% -6.3% -1.1% Compact SUV -1.4% -4.3% -1.3% 1.1% Entry Compact -7.6% -4.3% 0.5% -2.5% -2.9% Entry Subcompact -1.2% -6.6% -1.3% -1.5% -2.3% Intermediate Compact -2.1% -2.4% -2.3% -1.6% -3.4% Intermediate Large -2.5% -3.5% -1.9% -1.9% -0.9% Intermediate Mid-Size -2.4% -1.7% -1.5% -1.4% -0.8% Intermediate Subcompact 3.1% 1.2% -2.4% -1.3% Large Pickup % -0.4% -1.2% Large SUV -0.9% -2.2% -0.9% 0.2% 0.7% Large Van 0.6% 0.2% -1.6% 0.4% 1.4% Luxury Large % 2.9% -1.7% Luxury Large Pickup 1.8% 2.6% -0.1% -1.8% -1.4% Luxury Large SUV -0.8% -0.7% -3.6% Luxury Mid-Size 11.2% -2.3% -1.5% -0.8% -6.6% Luxury Mid-Size CUV -1.9% -2.2% -1.4% -1.4% -0.4% Luxury Mid-Size SUV 0.9% -4.7% -2.7% -3.3% -1.8% Mid-Size CUV -1.2% -2.2% -0.7% -1.1% -2.2% Mid-Size SUV -2.2% -1.1% -1.7% Mid-Size Van -1.5% -1.6% -2.2% -0.7% 0.2% Near Luxury Compact % -2.3% -3.1% -1.6% Near Luxury Mid-Size -2.5% 0.4% 0.6% -4.9% Premium Luxury Large % -4.2% -2.8% -8.3% Premium Luxury Large SUV % -5.7% -4.3% -11. Premium Luxury Mid-Size CUV -1.5% % -3.3% -4.4% Upper Compact -3.6% -1.6% % -1.3% Upper Large -0.1% -1.9% -1.1% % Upper Mid-Size -1.8% -2.7% -3.9% -2.1% -5.3% *Underlying data has been adjusted for Mileage & Mix. See the last page of "Guidelines" for data key. The expectation that consumers will respond to discounts, competitive pressures increasing due to more cross-shopping (see article on p. 3), and low dealer inventory suggests that manufacturers will respond to the June market by introducing calculated incentives. We do not expect blowout deals like we witnessed during the early 2000s, but instead prudent and model specific programs that will entice buyers into a new vehicle purchase primarily in the form of lease subvention and APR programs. Further, according to CNW the subprime loan approval rate has been steadily improving since the beginning of the year and FICO scores for lessees continues to decline. This indicates that there is more financing available for a larger share of consumers. With the increase in effective demand through more accessible financing, we should continue to see interest in both the new and used car market remain strong as consumers still require replacement vehicles and will rely on used vehicles at lower price points to satisfy their needs. Overall we expect the correction in June to be short lived and we should move back to very mild depreciation on used prices for the remainder of the year. 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 90 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 8 of nationwide auction activity. 8

9 Percent Change NADA Returning Used Supply Forecast About NADA s Returning Used Supply Forecast NADA s Returning Used Supply Forecast estimates the time it takes for a new vehicle to enter the used vehicle market, and is derived from actual new vehicle registrations. Return dates and rates are based on the original registration type (i.e. rental fleet, lease, or personal use). NADA Returning Used Supply Forecast: All Registration Types Year-over-Year Change 16% 14% 12% 1 8% 6% 4% 2% -2% -4% -6% -8% -1-12% -14% -16% Source: R.L. Polk, NADA NADA Returning Used Supply Forecast: Percent Change From Preceding Period Vehicle Type Car Light Truck Registration Type I II III IV I II III IV Total -1% 15% -3% -15% 17% 6% -19% Lease 15% 9% -13% -2% 15% 9% -14% -9% Personal -1% 2 8% -24% -2% 25% 9% -29% Rental -16% 4% -33% 23% -9% -7% 31% 18% Total -5% 5% 5% -17% -3% 1 11% -23% Lease 17% -2% -13% 2% 1-1% -12% -1 Personal -5% 11% 14% -23% -5% 13% 15% -29% Rental -3-24% % 43% 4% 9

10 Price P/Gal. Price P/Gal. NADA Fuel Forecasts About NADA s Fuel Forecasts NADA s Fuel Forecasts are created by measuring the long-run trend in the national average price of regular grade gasoline and diesel fuel. Price intervals are provided for each forecast to support longer-term strategic planning. NADA Fuel Forecast: ly Average Price of Regular Grade Gasoline July 2010 $4.25 $4.00 S.E. - 1 Baseline S.E. + 1 $3.75 $3.50 $3.25 $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 $1.50 $5.00 $4.75 NADA Fuel Forecast: ly Average Price of Diesel July 2010 S.E. - 1 Baseline S.E. + 1 $4.50 $4.25 $4.00 $3.75 $3.50 $3.25 $3.00 $2.75 $2.50 $2.25 $

11 Days' Supply Volume (Millions) 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 1.4 New Vehicle Sales YoY Change % Change Source: WardsAuto.com 80 New Vehicle Days' Supply Days' Supply YoY Change % Change 0-6 Source: WardsAuto.com Seasonally Adjusted Annual Rate (Millions) Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun Source: WardsAuto.com 11

12 Days' Supply Volume (Millions) Retail Market Indicators Used Vehicle Sales Used Vehicle Sales Used Vehicle Sales YoY Change 1 4 5% % % Change % Source: CNW 70 Used Vehicle Days' Supply Days' Supply YoY Change % Change Source: CNW 12

13 Index (SA) Rate (SA) 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. 12% Unemployment Rate 1 8% 6% 4% 2% Source: Moody's Databuffet 120 Consumer Confidence Index Source: Moody's Databuffet, The Conference Board 13

14 NADAguides.com Consumer Site Trends 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 one month period of time. New: Top 10 Researched Makes June 2010 Change Make 1 0 Ford 2 0 Chevrolet 3 0 Toyota 4 0 Dodge 5 0 Honda 6 1 Nissan 7 2 Jeep 8 (2) BMW 9 (1) Hyundai 10 1 GMC New: Top 10 Researched Models June 2010 Change Make Model 1 0 Ford Mustang 2 0 Chevrolet Camaro 3 0 Ford F Tesla Motors Roadster 5 30 Jeep Grand Cherokee 6 0 Chevrolet Equinox 7 (3) Dodge Challenger 8 (1) Toyota Camry 9 (1) Chevrolet Silverado Ford Fusion Used: Top 10 Researched Makes (05 09MY) June 2010 Change Make 1 0 Chevrolet 2 0 Ford 3 0 Toyota 4 0 Dodge 5 0 Honda 6 0 Nissan 7 0 GMC 8 0 Jeep 9 0 Chrysler 10 0 Pontiac Used: Top 10 Researched Models (05-09MY) June 2010 Change Make Model 1 0 Ford F Chevrolet Silverado Nissan Altima 4 0 Honda Accord Sdn 5 1 Dodge Ram Toyota Camry 7 1 Chevrolet Impala 8 (3) Ford Mustang 9 0 Chevrolet Tahoe 10 1 Ford Super Duty F

15 At NADA Used Car Guide At NADA Used Car Guide Understand NADA values from spot to trend. We provide four categories of benchmark data to reflect spot values and trend values. The weekly spot values provide a snapshot of the sometimes turbulent fluctuations at auction, while the monthly values reflect the trend line that balances the current month s transaction data with the longer-term movement of the vehicle s value. NADA Online and the NADA e-valuator suite of software both supply all eight of our values to make it easy for you to determine a vehicle s worth at any point in its lifecycle: Auction (high, average, low), Trade-In (clean, average, rough), Loan (clean) and Retail (clean). For more detailed descriptions of these value categories, go to On the Road See us out and about. July 15 th 16 th, we ll be sponsoring the ATAE annual meeting in Coeur d Alene, ID. Doug Ott (dott@nada.org), Account Executive, Credit Unions, will be at the NAFCU s 43 rd Annual Conference and Exposition July 20 th 24 th in Booth #813 at Chicago s Navy Pier. NADA Online is the perfect product to help speed your loan origination and make your valuation processes more efficient. Many credit unions and leagues use it today and couldn t do without it. Talk to Doug about how he can get you set up with a trial or full access. Won t be there? Contact Doug directly at x4710. CONTACTS: Financial, Legal, Analysts Steve Stafford x7275 sstafford@nada.org Credit Unions, Fleet/Leasing, Rental, Government Doug Ott x4710 dott@nada.org Dealers, OEMs, Captive Finance Yvonne Porter x4724 yporter@nada.org Value Added Resellers (VARs) Jim Gibson x7136 jgibson@nada.org Director, Sales, Customer Service, Insurance Dan Ruddy x4707 druddy@nada.org Media Jeff Beddow jbeddow@nada.org About NADA Used Car Guide Over a 77-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 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. 15