-$ % -$ % -$ % -$ % Model Years: , Volume Weighted Wholesale Average Values, Weekly Change from 2/23/18 to 3/2/18

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1 WEEKLY CHANGE WEEKLY CHANGE ch 5, 2018 It was a great week for lower-priced mainstream brand vehicles as tax season buying continues with active bidding in the auction lanes. Anil Goyal, Executive Vice President, Operations +0.4% +0.2% +$ % +$ % 0% -0.2% -0.4% -0.6% -$6-0.09% -$7-0.07% -$ % -$ % -$ % -$ % -$ % -$9 CARS -0.10% 0% -0.2% -0.4% -0.6% -0.8% -1.0% -1.2% -$ % -$1-0.01% -$ % -$ % -$ % -$ % -$ % -$ % -$ % $0 0% -$ % -$ % -$5-0.03% -$29 TRUCKS -0.19% Model Years: , Volume Weighted Wholesale Average Values, Weekly Change from 2/23/18 to 3/2/18 Best Week YTD for Vehicle Depreciation Volume-weighted, overall car segment values declined by only 0.10% last week. In comparison, the market values had decreased on average by 0.24% per week in the previous four weeks. In cars, the Sub-Compact and Mid-Size Car segments performed the best, with values increasing by +0.21% and +0.11%, respectively last week. Volume-weighted, overall truck segment (including pickups, SUVs and vans) values decreased by 0.19% last week, lower than the average decrease of 0.37% per week in the previous four weeks. In trucks, the Compact Crossover/SUV and Compact Van segments performed the best with values holding steady last week.

2 ch 5, 2018 Sentiment from the Auction Lanes Our editors and personnel attend about 60 auctions every week across the country to provide key insights: Vehicles in the $30,000 range were not receiving bids, but the units around $12,000 or less were in demand and most sold. The dealer lanes seemed to depend on the seller as some held to their floors while others were willing to negotiate the selling price. Laura in GA Almost all of the consigned vehicles, whether commercial or dealer owned, only sold if the floor was met, so the sold percentages were just ok. Richard in WI We had a good sale with active bidding both from the auction floor and via the internet. k in CA There was good activity today, which was indicative of the approaching spring market or the fact that the condition of the vehicles seemed to be better. Either way we had a good sale. Israel in PA A franchise dealer reported that January and ruary were not particularly good but he receives lots of action on vehicles under $10,000. Bob in MA New Vehicle Incentives Percent of Typically Equipped MSRP Source: Black Book Visual Analytics New vehicle incentives have come down a little from the peak achieved last year. This is likely temporary but if this trend continues, it will be a positive development for residuals. Vehicle Highlight The All-New 2018 BMW X2 xdrive28i is the latest addition to the BMW X series family. This Luxury Subcompact Crossover SUV is equipped with a 2.0-liter twin turbo inline 4-cylinder engine. MSRP for the X2 starts at $35,345 including destination and comes in sdrive or xdrive options. The X2 s main competition includes the Porsche Macan, Mercedes GLC, and the Audi Q3. This week s report includes our Monthly Edition Supplement on Specialty kets. 2

3 SPECIALTY MARKETS: COLLECTIBLE CARS ch 5, 2018 All Eyes Turn to Amelia Island What started out as a national caliber Concours d Elegance twenty three years ago has turned into one of the top three collectible vehicle events in the United States, joining Pebble Beach/Monterey and Scottsdale to become the reigning collectible car triumvirate. The main events will be joined by auctions hosted by RM Sotheby s (the official vendor), Bonhams, Gooding, Hollywood Wheels, and Motostalgia. Eric Lawrence, Director of Specialty kets American Pony Cars RM Sotheby s Arizona Sale was quite successful, achieving total sales of $36,500,000 and an 88% sell through rate. Although that s down about $18,000,000 from last year, the sales percentages were about the same, and this year s total was reached with thirty two fewer cars. The Scottsdale auctions held by Gooding, Bonhams, and Russo and Steele were all quite successful, with sales of roughly $50,000,000 (85%); $25,000,000 (87%); and $16,000,000 (64%) respectively. It should be remembered that these auctions took place before the recent stock market fluctuations, so collectors heading to Amelia would be wise to take the market s temperature before buying or selling. Ferrari 250 GT/L Lusso. Courtesy of RM Sotheby s. Notable Recent Auction Sales Include: 1964 Ferrari 250 GT/L Lusso $1,682,500 (RM Sotheby s) 1966 Shelby Cobra 427 S/C $2,947,500 (RM Sotheby s) 2017 Ferrari F12tdf $1,325,000 (RM Sotheby s) GTS Spider $2,530,000 (Gooding) 2015 McLaren P1 Coupe $1,760,000 (Gooding) 1958 Porsche 550 Spyder $5,100,000 (Bonhams) 1957 Mercedes Benz 300SL Roadster $1,512,000 (Bonhams) 1964 Cheetah GT Coupe $660,000 (Russo and Steele) 1965 Shelby GT350 Fastback $352,000 (Worldwide) 1969 Ford Mustang Boss 429 Fastback $206,000 (Silver) 3

4 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 SPECIALTY MARKETS: RECREATIONAL VEHICLES ch 5, 2018 RV Values At Auctions Steady As Spring Approaches For the second month in a row, the values of RVs sold at auction, including motorized and towable, were very stable, with changes of less than two percent. They even went in the same direction this time down a touch. With the prime Spring selling season right around the corner, we re beginning to see dealers stocking up on what they feel will be in demand in the coming months. I expect auction volume to increase as we move further into the new year. Eric Lawrence, Director of Specialty kets Motor Home Value Trends For Motor Homes (including Class A, B, and C) Average selling price was $45,705, down $430 (0.9%) from the previous month One year ago, the average selling price was $42,697 Auction volume was unchanged from the previous month Travel Trailer and Fifth Wheel Value Trends For Towables (including Travel Trailers and Fifth Wheels) Average selling price was $13,301, down $232 (1.7%) from the previous month One year ago, the average selling price was $12,300 Auction volume was up 5% from the previous month 4

5 SPECIALTY MARKETS: POWERSPORTS ch 5, 2018 Powersports ket Beginning To Heat Up The old saying, In like a lion, out like a lamb refers to typical ch weather, but the first half of that phrase could just as well refer to a few segments in the Powersports market this month. After a lackluster performance in ruary, things are definitely heating up this month, and the domestic V-Twin segment is most decidedly roaring like a lion. Scott Yarbrough, Motorcycle & Powersports Editor 4.0% 3.0% 2.0% 1.0% Motorcycle & Powersports Percent Changes ruary to ch % 3.1% 2.2% 1.3% 1.3% 0.8% 0.0% -1.0% -0.7% -0.7% -1.1% -0.3% -0.3% -2.0% The domestic V-Twin cruiser segment is up by nearly 4% this month, one of the largest gains we have seen for these bikes in a while. On the other hand, the metric cruisers are up by a healthy, but unspectacular, 1.3%, leading to a 2.2% average increase for the entire segment. Within the domestic V-Twin side of the Cruiser segment, it is the more entry and mid-level bikes that are up the most, with the higher end Touring models showing more modest increases. The other major winner this month is the Scooter segment, up by 3.1%. These bikes tend to be highly seasonal, seeing rather large percent changes in value throughout the year, though it should be noted the dollar changes are not that great in absolute terms due to average transaction prices being around a thousand dollars for the segment. ATVs, Street bikes, Off-Road bikes, Dual Sports, and Utility Vehicles are lagging behind the Cruisers and Scooters, and are actually down a touch this month. 5

6 Monthly Change SPECIALTY MARKETS: HEAVY DUTY ch 5, 2018 Heavy Duty Auction numbers hold for Trucks as well as Commercial trailers! Depreciation may increase a little going forward, but that remains to be seen. Charles Cathey - Medium and Heavy Duty Truck Editor ruary ended in a similar fashion as January, with strong used wholesale values. This trend includes some commercial trailers; in fact, many dry vans and reefers appreciated in value. Last month s report stated that the present need for additional equipment to help get loads delivered in the needed timeframe appears to be a major factor. We also believe that the normal upgrades implemented in fleets of all sizes, which includes independent operators, is a major factor. Normal attrition, or retiring of aged equipment, is coming on quicker, being fueled by trucking industry operations realizing that most of the newer more efficient trucks need to be used going forward. The use of older equipment powered by currently popular engines will eventually be played out with time limits approaching for this group of trucks. Available late model unit values which have several benefits, including Automated Manual Transmissions (AMT s), factor into the strong selling prices. The Construction/Vocational segment continues with strong sale values although they are dropping a little more due to normal depreciation kicking in. Average Wholesale Value Changes (ket) $0 -$200 -$400 -$600 -$800 -$1,000 -$1,200 Construction/Vocational Over the Road Trucks & Tractors Regional Tractors Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL DATE Value $ Change % Change Value $ Change % Change Value $ Change % Change YEARS 03/01/18 88, % 70, % 62, % /01/18 89, % 70, % 62, % HD Construction/Vocational segment dropped an average of $407 (0.5%) in ruary compared to the average decline of $351 (0.4%) in January HD Over the Road Tractor segment dropped an average of $406 (0.6%) in ruary compared to the average drop of $557 (0.8.%) in January HD Regional Tractor segment dropped an average of $326 (0.5%) in ruary compared to the average depreciation of $402 (0.6%) in January. Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL DATE Value $ Change % Change Value $ Change % Change Value $ Change % Change YEARS 03/01/18 44, % 30, % 23, % /01/18 44, % 31, % 23, % HD Construction/Vocational segment dropped an average of $346 (0.8%) in ruary compared to the $242 (0.5%) in January HD Over the Road Tractor segment dropped an average of $370 (1.2%) in ruary compared to $248 (0.8%) average depreciation in January HD Regional Tractor segment dropped an average of $241 (1.0%) in ruary compared to the average drop of $197 (0.8%) in January. 6

7 01/23/17 02/06/17 02/20/17 03/06/17 03/20/17 04/03/17 04/17/17 05/01/17 05/15/17 05/29/17 06/12/17 06/26/17 07/10/17 07/24/17 08/07/17 08/21/17 09/04/17 09/18/17 10/02/17 10/16/17 10/30/17 11/13/17 11/27/17 12/11/17 12/25/17 01/08/18 01/22/18 SPECIALTY MARKETS: MEDIUM DUTY ch 5, 2018 Medium Duty Units Stabilize in January For the third consecutive month Medium Duty Units have increasingly stabilized. Josh Giles - Senior Truck Editor Overall, the Medium Duty market stabilized during the last couple of months of 2017 and that trend continues for the first part of Reports are indicating that truck orders are up on almost all truck classes, but the increase in inventory will not necessarily have a negative impact on the future market. Although it s true that increased supply will lower prices most of the time, in a case like this there is plenty of pent-up demand and finding one in decent condition is challenging at times. Used inventory continues to decrease while demand increases. Units in this segment are so important to our daily lives and this is only going to increase in the future. From deliveries, construction, agriculture, telecommunication, and transportation there is a medium duty unit ready to tackle any job. We believe the market can handle some increase in volume. Many companies have second and even third usage for these units. So, while businesses replace some older units with newer more fuel efficient trucks; that does not always mean that these units will end up in the secondary market. This past month late model units ( ) dropped an overall weighted average of $230 (0.5%). While, the older units ( ) dropped an average of $72 (0.4%). We expect this stabilizing trend to continue for most segments for the next couple of months as winter weather and an increased housing market mix with a limited supply of good used trucks. DATE Medium Duty Medium Duty MODEL Value $ Change % Change YEARS DATE Value $ Change % Change 02/01/18 19, % /01/18 01/01/18 19, % /01/18 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 U.S. Average Diesel Prices (This Year vs. Last Year) MODEL YEARS 45, % , % Diesel/This Year Diesel/Last Year 1745 N. Brown Rd., Suite 130, Lawrenceville, GA info@blackbook.com Opt-in to receive reports from Black Book at 7