March 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

Model Years: 2009-2015, 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.

+$11+0.21%

-$6-0.09%

+$9+0.11%

-$7-0.07%

-$58-0.42%

-$28-0.17% -$72

-0.26%

-$22-0.16%

-$167-0.47%

-$9CARS

-0.10%

-0.6%

-0.4%

-0.2%

0%

+0.2%

+0.4%

WEE

KLY

CH

AN

GE

-$21-0.20%

-$1-0.01%

-$29-0.21% -$72

-0.36%

-$104-0.69%

-$42-0.23% -$58

-0.30%-$92

-0.31%

-$122-0.98%

$00%

-$58-0.45%

-$47-0.34%

-$5-0.03%

-$29TRUCKS-0.19%

-1.2%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0%

WEE

KLY

CH

AN

GE

2

March 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.” Mark 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 February 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 Markets.

3

March 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 Markets

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.

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)

1967 330 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)

Ferrari 250 GT/L Lusso. Courtesy of RM Sotheby’s.

13500

14000

14500

15000

15500

16000

16500

American Pony Cars

SPECIALTY MARKETS:

COLLECTIBLE CARS

4

March 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 Markets

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

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

30000

35000

40000

45000

50000

55000

Jan

-13

Feb

Mar

Ap

rM

ay Jun

Jul

Au

gSe

pO

ctN

ov

De

cJa

n-1

4Fe

bM

arA

pr

May Jun

Jul

Au

gSe

pt

Oct

No

vD

ec

Jan

-15

Feb

Mar

Ap

rM

ayJu

ne

July

Au

gSe

pt

Oct

No

vD

ec

Jan

-16

Feb

Mar

Ap

rM

ayJu

ne

July

Au

gSe

pt

Oct

No

vD

ec

Jan

-17

Feb

Mar

Ap

rM

ayJu

ne

July

Au

gSe

pO

ctN

ov

De

cJa

n-1

8

Motor Home Value Trends

9000

10000

11000

12000

13000

14000

15000

Jan

-13

Feb

Mar

Ap

rM

ay Jun

Jul

Au

gSe

pO

ctN

ov

De

cJa

n-1

4Fe

bM

arA

pr

May Jun

Jul

Au

gSe

pt

Oct

No

vD

ec

Jan

-15

Feb

Mar

Ap

rM

ayJu

ne

July

Au

gSe

pt

Oct

No

vD

ec

Jan

-16

Feb

Mar

Ap

rM

ayJu

ne

July

Au

gSe

pt

Oct

No

vD

ec

Jan

-17

Feb

Mar

Ap

rM

ayJu

ne

July

Au

gSe

pO

ctN

ov

De

cJa

n-1

8

Travel Trailer and Fifth Wheel Value Trends

SPECIALTY MARKETS:

RECREATIONAL VEHICLES

5

March 5, 2018

Powersports Market Beginning To Heat Up “The old saying, ‘In like a lion, out like a lamb’ refers to typical March 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 February, 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

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.

-0.7%

2.2%

1.3%

-0.7%-1.1%

3.1%

0.8%

-0.3% -0.3%

1.3%

3.7%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

Motorcycle & Powersports Percent Changes February to March 2018

SPECIALTY MARKETS:

POWERSPORTS

6

March 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

February 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.

DATE

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change

03/01/18 88,654 -407 -0.5% 70,235 -406 -0.6% 62,160 -326 -0.5% 2015-2016

02/01/18 89,062 -351 -0.4% 70,640 -557 -0.8% 62,486 -402 -0.6% 2015-2016

2015-2016 HD Construction/Vocational segment dropped an average of $407 (0.5%) in February compared to the average decline of $351 (0.4%) in January.

2015-2016 HD Over the Road Tractor segment dropped an average of $406 (0.6%) in February compared to the average drop of $557 (0.8.%) in January.

2015-2016 HD Regional Tractor segment dropped an average of $326 (0.5%) in February compared to the average depreciation of $402 (0.6%) in January.

DATE

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL

YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change

03/01/18 44,479 -346 -0.8% 30,771 -370 -1.2% 23,629 -241 -1.0% 2007-2014

02/01/18 44,825 -242 -0.5% 31,141 -248 -0.8% 23,871 -197 -0.8% 2007-2014

2007-2014 HD Construction/Vocational segment dropped an average of $346 (0.8%) in February compared to the $242 (0.5%) in January.

2007-2014 HD Over the Road Tractor segment dropped an average of $370 (1.2%) in February compared to $248 (0.8%) average depreciation in January.

2007-2014 HD Regional Tractor segment dropped an average of $241 (1.0%) in February compared to the average drop of $197 (0.8%) in January.

-$1,200

-$1,000

-$800

-$600

-$400

-$200

$0

Mo

nth

ly C

han

ge

Average Wholesale Value Changes (Market)

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors

SPECIALTY MARKETS:

HEAVY DUTY

SPECIALTY MARKETS:

HEAVY DUTY

7

March 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 2018. 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 (2015-2016) dropped an overall weighted average of $230 (0.5%). While, the older

units (2007-2014) 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

MODEL

YEARS

DATE

Medium Duty

MODEL

YEARS Value $ Change % Change Value $ Change % Change

02/01/18 19,503 -72 -0.4% 2007-2014 02/01/18 45,438 -230 -0.5% 2015-2016

01/01/18 19,575 -127 -0.6% 2007-2014 01/01/18 45,668 -296 -0.6% 2015-2016

1745 N. Brown Rd., Suite 130, Lawrenceville, GA 30043| 1.866.452.1400

www.blackbook.com| info@blackbook.com Opt-in to receive reports from Black Book at http://www.blackbook.com/insights/market-insights

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

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

U.S. Average Diesel Prices (This Year vs. Last Year)

Diesel/This Year Diesel/Last Year

SPECIALTY MARKETS:

MEDIUM DUTY