KAR Auction Services, Inc.Corporate Update// February 2020

K A R | 2

This presentation is for informational purposes only. Neither the company nor any of its affiliates or representatives makes any representation or warranty, expressed or implied, as to the accuracy or completeness of this presentation or any of the information contained herein. The company and its affiliates or representatives expressly disclaim to the fullest extent permitted by law any and all liability based, in whole or in part, on the presentation or any information contained herein. This presentation is not an offer to sell, or the solicitation of an offer to buy, any securities.

ConfidentialityThis presentation (together with any other statements or information that the company may furnish to you) is confidential and may not be reproduced, forwarded to any person or published, in whole or in part.

Cautionary Note Regarding Forward-Looking StatementsThis presentation includes forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In particular, statements made in this presentation that are not historical facts (including, but not limited to, expectations, estimates, assumptions and projections regarding the industry, business, future operating results, potential acquisitions and anticipated cash requirements) may be forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions identify forward-looking statements. Such statements, including statements regarding our future growth; anticipated cost savings, revenue increases, credit losses and capital expenditures; dividend declarations and payments; common stock repurchases; tax rates and assumptions; strategic initiatives, greenfields and acquisitions; our competitive position and retention of customers; and our continued investment in information technology, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements.

Such forward looking statements are subject to certain risks, trends, and uncertainties that could cause actual results to differ materially from those projected, expressed or implied by such forward-looking statements. Many of these risk factors are outside of the company’s control, and as such, they involve risks which are not currently known to the company that could cause actual results to differ materially from forecasted results. Factors that could cause or contribute to such differences include those matters disclosed in the company’s Securities and Exchange Commission (“SEC”) filings. The forward-looking statements in this document are made as of the date hereof and the company does not undertake to update its forward-looking statements.

Market & Industry DataProjections, estimates, industry data and information contained in this presentation, including the company's general expectations and market position and market opportunity, are based on information from third-party sources and management estimates. Although the company believes that its third party-sources are reliable, the company cannot guarantee the accuracy or completeness of its sources. The company's management estimates are derived from third-party sources, publicly available information, the company's knowledge of its industry and assumptions based on such information and knowledge. The company's management estimates have not been verified by any independent source. All of the projections, estimates, market data and industry information used in this presentation involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. In addition, projections, estimates and assumptions relating to the company's and its industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including, but not limited to, those described above, that could cause future performance to differ materially from the company's expressed projections, estimates and assumptions or those provided by third parties.

Non-GAAP Financial MeasuresWe believe that our financial statements and other financial data contained in this presentation have been prepared in a manner that complies, in all material respects, with the regulations published by the SEC and are consistent with current practice, except that the financial information presented (i) may not be consistent with what would be included in a registration statement filed with the SEC and (ii) includes EBITDA and Adjusted EBITDA (each as described herein) which are non-GAAP financial measures. SEC rules regulate the use in filings with the SEC of non-GAAP financial measures such as these, which are derived on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States (“GAAP”).

Disclaimer

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Powering the world’s most trusted automotive marketplaces

3.8mmvehicles sold

in 2019

$40bnvalue of

vehicles sold

58%vehicles sold online

in 2019

Digital Assets

LeadingMarket

Positions

$2.8bnRevenue

$510mmAdjusted EBITDA

Data & Analytics

Optimize Customer Portfolios

200+ operating locations

across the U.S., Canada, Mexico,

Europe and U.K.

75+countries

in ourcustomer base

Vehicle Auctions

#2 North American

Market Share

K A R | 4

Large North American Addressable Market

42mmUsed Vehicle

Sales

300mmVehicles in Operation

10mm UnitsPhysical Auctions

12mm UnitsConsumer-to-Consumer

30mm UnitsRetail Dealer Sales

5mm UnitsDealer-to-Dealer

14mm UnitsTrade-Ins & Other

19mm UnitsNew Vehicle Sales

13mm UnitsRemoved From Operation

1mm UnitsPrivate Label

Source: National Auto Auction Association, IHS, National Automobile Dealer’sAssociation, DesRosiers Automotive Consultants and Management EstimatesKAR Markets

K A R | 5

Growing North American Industry VolumeThrough TAM Expansion

9.5 10.0

9.7 9.4 9.5 9.5 9.5

9.0 8.3

8.0 8.2 8.7

9.2 9.9

10.6 11.1

11.5 11.7 11.8 11.9

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019E

2020E

2021EW

hole

car I

ndus

try V

olum

es (M

M)

Dealers Institutions Private Label D2D TotalSource: National Auto Auction Association, IHS, National Automobile Dealer’sAssociation, DesRosiersAutomotive Consultants and Management Estimates

K A R | 6

Diversified Revenue Model

Auction Services ~45% of Revenue

BodyShop

Detail Shop

Mechanical Shop

Ancillary & Related Services~55% of Revenue

K A R | 7

Consignment Revenue Model Provides Strong Free Cash Flows and Margins

Wholecar Sellers

• Dealers

• OEMs and their Captive Finance Arms

• Commercial Fleets

• Financial Institutions

• Rental Car Companies

Wholecar Buyers

• Franchised Dealers

• Independent Dealers

• Wholesale DealersRevenue Per Unit:(1)

Physical ~$880Online Only ~$150 Revenue:

~$175 / LTU(2)

1. 2019 Amounts2. 2019 amount excluding “warranty contract” revenue

K A R | 8

Market Leading Transaction Platforms

PrivateLabel Physical

Dealerto

DealerInternational

Sales Method Online Only In-Lane Online Online Only Online Only

Vehicles Sold(thousands) 1,370 1,580 560 160 110

ASP ~$19,000 ~$11,000 ~$11,000 ~$7,000 ~€8,700

Source Commercial All All Dealer All

Auction Fees(1) ~$105 ~$420 ~$420 ~$270 ~€400

Brand

1. Excludes purchased vehicles

K A R | 9

Private Label Platforms Provide Channel for Retail Ready Vehicles

Grounding Dealer

Online Only Open

ADESAIn-lane buyer or

Online buyer

Sell Fee

Auction Fees

Sell + Buy Fee

~2-3 days

~2-3 days

Competitors

Online Only Closed~2-3 days

PHYSICAL AUCTIONS

Admin Fee

Sell + Buy Fee

K A R | 10

Physical Auctions Provide Value Added Services in Online Selling Environments

• Seller marshalling services• Logistics efficiencies• Buyer virtual inventory

Marshalling & Logistics

• Lowest cost alternative• Seller vehicle value maximization• Buyer retail ready inventory

Reconditioning

• Weekly simulcast event sales• Continuous bulletin board sales• Flash auctions (i.e., TradeRev)

OmnichannelPlatforms

K A R | 11

TradeRev Expands Addressable Market

10mm UnitsPhysical Auctions

5mm UnitsDealer-to-Dealer

New Market5mmUnits

Dealer-to-Dealer

• Dealer-to-Dealer Trades

• Wholesaler Purchases

5mm UnitsPhysical AuctionsInstitutional

Seller

• Reconditioning Desired

• Marshalling and Storage Required

5mm UnitsPhysical Auctions

DealerSeller

• Lower Physical Auction Reconditioning Penetration

AddressableMarket

10mm Units

K A R | 12

Europe Provides Large Growth Opportunity

Buyer distribution PartnershipsADESA Offices

Large Market with ~260M1

Vehicles in Operation

Fragmented Competition

Best in Class Cross Border Transaction Capabilities

1 ACEA

K A R | 13

KAR Global PrioritiesProfitable Growth

Transform Digital Auction of the Future

FINANCIAL DEALER DIGITAL GLOBALCOMMERCIAL

Improve Financial

Performance

Grow Total Dealer

Consignment Volumes

Grow Commercial Customer

Opportunities

Establish a Global Offering

Financial Outlook & Capital Allocation

K A R | 15

2015 2016 2017 2018 2019

KAR

History of Profitable GrowthAdjusted EBITDA

K A R | 16

Long Term Financial OutlookStrong Organic Growth Opportunities

Industry Outlook

• Continued online-only and simulcast sales growth

• Market requires “retail ready” vehicles desiring reconditioning

• Customers desire data and analytics to become more efficient

• Independent used car retail activity expected to remain stable;floor plan lending credit losses expected to remain below 2%

CompanyTargets

Organic Revenue Growth 6%-9% / Year

• Volume – TradeRev, international and domestic market share

• RPU – on-premise ancillary service penetration through growing commercial seller mix, and growing related services opportunities

Adjusted EBITDA Margin Expansion From 20% to 25%

Over 5 Years

• Eliminate TradeRev losses

• Reduced overhead post IAA transition services

• Adjust service delivery costs as industry evolves

K A R | 17

Improving Our Performance

Operations Initiatives• VirtuaLane (reduce sale day vehicle movement)

• Reduce cycle times (improve capacity utilization)

• Digital selling penetration

SG&A Initiatives• Integration efficiencies (TradeRev & ADESA dealer consignment

sales)

• Digital process improvements (online transactions)

• Corporate efficiencies

K A R | 18

Clear Shareholder Friendly Capital Allocation Framework

Stock buyback if strategic investment opportunities not imminent

We will not accumulate cash

Buyback

Patient and disciplined investments represent best long-term risk-adjusted use of capital

International expansion, complementary services/facilities,digital platforms

StrategicInvestments

40% - 50% of remaining free cash flow (i.e., after dividends)

Recurring dividends highlight strong free cash flow generation

Dividend

~25% of prior year Adjusted EBITDA

Over 50% technology

~70% maintenance

Capex

Maintain 3x or less consolidated net debt to Adjusted EBITDA.Further deleveraging not a priority due to current low cost of debt.

Appendices

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Non-GAAP Financial Measures

EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and expected incremental revenue and cost savings as described in the company's senior secured credit agreement covenant calculations. Management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about one of the principal measures of performance used by the company’s creditors. In addition, management uses EBITDA and Adjusted EBITDA to evaluate the company’s performance.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the results as reported under GAAP. These measures may not be comparable to similarly titled measures reported by other companies.

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Adjusted EBITDA Reconciliation($ in millions)

Year ended December 31,2015 2016 2017 2018 2019

Net income (loss) $214.6 $222.4 $362.0 $328.0 $188.5Less: Income from discontinued operations (115.2) (120.7) (188.0) (210.4) (96.1)Income from continuing operations $99.4 $101.7 $174.0 $117.6 $92.4

Add back: Income taxes 58.2 59.1 (15.6) 34.3 37.7Interest expense, net of interest income 90.0 137.5 161.8 187.3 186.4Depreciation and amortization 132.1 152.6 171.5 172.4 188.7EBITDA $379.7 $450.9 $491.7 $511.6 $505.2Non-cash stock-based compensation 11.6 16.5 21.3 20.4 20.3Loss on extinguishment of debt - 5.4 27.5 - 2.2Acquisition related costs 4.7 7.0 6.8 7.3 12.2Securitization interest (18.7) (28.0) (34.9) (51.5) (54.9)Minority interest 0.8 3.8 4.4 - -Gain on previously held equity interest value - - (21.6) - -Loss on asset sales 3.6 2.2 1.7 1.7 2.1Severance 1.2 1.8 2.6 5.7 15.3Foreign currency (gains)/losses - - - 3.7 (0.7)IAA allocated costs - - - 5.2 2.3Other 1.8 1.1 0.4 1.1 6.0

Total addbacks 5.0 9.8 8.2 (6.4) 4.8Adjusted EBITDA $384.7 $460.7 $499.9 $505.2 $510.0

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December 31, 2019 Leverage(US$ in millions)

Corporate Credit Ratings: S&P BB-, Moodys B1

Balance MaturityTerm Loan B-6 (Adjusted LIBOR + 2.25%) $948 2026

Revolving Credit Facility (Adjusted LIBOR + 1.75%) & Lines of Credit 19 2024

Senior Notes (Fixed 5.125%) 950 2025

Finance Leases 27

Total 1,944

Less: Available Cash (431)

Net Debt $1,513

Net Debt / Adjusted EBITDA (Target 3x) 3.0

K A R | 23

ADESA Revenue - Quarter

1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 3Q19 4Q19 2019

Auction Fees & Services Revenue

$502.7 $511.1 $496.0 $475.3 $1,985.1 $541.9 $553.1 $534.5 $504.0 $2,133.5

Purchased Vehicle Sales $25.4 $27.2 $31.0 $33.2 $116.8 $57.8 $79.3 $79.1 $79.3 $295.5

Total ADESA Revenue $528.1 $538.3 $527.0 $508.5 $2,101.9 $599.7 $632.4 $613.6 $583.3 $2,429.0

Gross Profit $222.1 $231.1 $219.2 $198.7 $871.1 $229.0 $239.5 $227.4 $212.4 $908.3

Gross Profit % 42.1% 42.9% 41.6% 39.1% 41.4% 38.2% 37.9% 37.1% 36.4% 37.4%

Gross Profit %, Net of Purchased Vehicle Sales

44.2% 45.2% 44.2% 41.8% 43.9% 42.2% 43.2% 42.5% 42.1% 42.6%

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ADESA Metrics - Annual

2019 2018 2017 2016 2015

Revenue2 $2,429.0 $2,101.9 $1,937.5 $1,765.3 $1,427.8

Total Volume 3,784 3,472 3,180 2,885 2,465

Online Only Volume (N.A.) 1,533 1,304 938 743 592

Total Online Volume %3 58% 54% 46% 42% 40%

Physical Conversion % (N.A.) 62.8% 61.6% 60.4% 58.0% 58.3%

Dealer Consignment Mix % (Physical) 40% 42% 45% 48% 50%

Physical RPU1 $884 $844 $775 $753 $701

Online Only RPU1 $149 $121 $113 $110 $102

Gross Margin2 37.4% 41.4% 42.0% 41.3% 41.4%

1 Excluding purchased vehicle sales2 Includes purchased vehicle sales3 Includes ADESA Simulcast and DealerBlock volume

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ADESA Metrics - Quarter

4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18

Revenue2 $583.3 $613.6 $632.4 $599.7 $508.5 $527.0 $538.3 $528.1

Total Volume 887 957 994 945 811 876 907 878

Online Only Volume (N.A.) 355 396 416 367 306 343 346 309

Total Online Volume %3 59% 59% 59% 57% 54% 54% 54% 52%

Physical Conversion % (N.A.) 58.4% 62.8% 66.1% 63.8% 58.5% 62.9% 62.4% 62.6%

Dealer Consignment Mix % (Physical) 39% 43% 41% 38% 40% 44% 43% 41%

Physical RPU1 $886 $893 $882 $875 $868 $850 $839 $820

Online Only RPU1 $155 $151 $150 $144 $122 $126 $118 $117

Gross Margin2 36.4% 37.1% 37.9% 38.2% 39.1% 41.6% 42.9% 42.1%

1 Excluding purchased vehicle sales2 Includes purchased vehicle sales3 Includes ADESA Simulcast and DealerBlock volume

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AFC Metrics - Annual

2019 2018 2017 2016 2015

Revenue $352.9 $340.9 $301.3 $286.8 $268.4

Loan Transaction Units (LTU) 1,783 1,760 1,688 1,718 1,607

Revenue per Loan Transaction, Excluding “Warranty Contract Revenue” $178 $175 $159 $148 $150

Ending Managed Finance Receivables $2,115.2 $2,014.8 $1,912.6 $1,792.2 $1,641.0

Ending Obligations Collateralized by Finance Receivables $1,461.2 $1,445.3 $1,358.1 $1,280.3 $1,189.0

% Vehicles Purchased at Any Auction 84% 83% 85% 83% 84%

Active Dealers 12,900 12,300 12,400 12,200 11,300

Vehicles per active dealer 16 15 15 15 16

Average Credit Line $270,000 $270,000 $250,000 $260,000 $230,000

Avg Value Outstanding per Vehicle $10,000 $10,200 $9,900 $9,500 $9,100

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AFC Metrics - Quarter

4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18

Revenue $88.0 $88.3 $86.7 $89.9 $85.3 $85.4 $85.1 $85.1

Loan Transaction Units (LTU) 443 442 437 461 428 433 435 464

Revenue per Loan Transaction, Excluding “Warranty Contract Revenue”

$178 $180 $178 $177 $180 $177 $177 $166

Ending Managed Finance Receivables $2,115.2 $2,110.4 $2,070.1 $1,989.1 $2,014.8 $1,979.7 $1,958.6 $1,933.2

Ending Obligations Collateralizedby Finance Receivables $1,461.2 $1,428.4 $1,422.3 $1,360.6 $1,445.3 $1,366.3 $1,358.0 $1,354.2

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AFC Provision for Credit Losses - Annual

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

Ending Managed Receivables

$2,115.2 $2,014.8 $1,912.6 $1,792.2 $1,641.0 $1,371.1 $1,107.6 $1,004.2 $883.2 $771.6 $613.0 $506.6 $847.9

Average ManagedReceivables

$2,059.9 $1,959.8 $1,802.2 $1,732.5 $1,474.9 $1,208.4 $1,051.4 $925.8 $798.8 $688.6 $516.4 $744.4 $835.3

Provision for Credit Losses $35.3 $32.9 $33.9 $30.7 $16.0 $12.3 $9.6 $7.2 $6.1 $11.2 $17.1 $44.7 $25.0

% of ManagedReceivables

1.7% 1.7% 1.9% 1.8% 1.1% 1.0% 0.9% 0.8% 0.8% 1.6% 3.3% 6.0% 3.0%

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4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18

Ending Managed Receivables $2,115.2 $2,110.4 $2,070.1 $1,989.1 $2,014.8 $1,979.7 $1,958.6 $1,933.2

Average ManagedReceivables $2,112.8 $2,090.3 $2,029.6 $2,002.0 $1,997.3 $1,969.2 $1,945.9 $1,922.9

Provision for Credit Losses $9.8 $8.9 $8.4 $8.2 $10.8 $7.3 $7.1 $7.7

% of ManagedReceivables 1.9% 1.7% 1.7% 1.6% 2.2% 1.5% 1.5% 1.6%

AFC Provision for Credit Losses - Quarterly