February 5, 2018

“It was a good week for mainstream car segments as tax season buying has begun with strong sales being reported at the auctions.”

Anil Goyal, Executive Vice President, Operations

Model Years: 2009-2015, Volume Weighted Wholesale Average Values, Weekly Change from 1/26/18 to 2/2/18

Best Week YTD for Car Segments in Value Retention

Volume-weighted, overall car segment values declined by 0.34% last week. In comparison, the market

values had decreased on average by 0.64% per week in the previous four weeks.

In cars, Mid-Size Car segment performed the best, with values remaining nearly flat to last week.

Volume-weighted, overall truck segment (including pickups, SUVs and vans) values decreased by

0.50% last week, same as the average decrease of 0.50% per week in the previous four weeks.

In trucks, Full-Size Crossover/SUV segment performed the worst with values declining by 1.13% last

week.

-$5-0.10%

-$19-0.28%

-$2-0.03%

-$33-0.34%

-$104-0.72%

-$85-0.49%

-$97-0.31%

-$91-0.68%

-$99-0.27%

-$33CARS

-0.34%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0%

WEE

KLY

CH

AN

GE

-$71-0.64%

-$53-0.47%

-$66-0.46%

-$233-1.13%

-$148-0.90%

-$104-0.56%

-$29-0.15%

-$173-0.58%

$00%

-$18-0.23%

$00%

$00%

-$120-0.65%

-$76TRUCKS-0.50%

-1.4%

-1.2%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0%

WEE

KLY

CH

AN

GE

2

February 5, 2018

Sentiment from the Auction Lanes Our editors and personnel attend about 60 auctions every week across the country to provide key insights:

“Higher quality vehicles continue to do well in all price ranges. Retail in our area has picked up a bit, which bodes well for a market climb.” Tim in IN

“Dealers were more aggressively trying to purchase inventory but they were careful not to overpay.” Rick in FL

“We had a good sale today with a lot of activity in the lanes. Vehicles under around $12,000 were in the highest demand.” Laura in GA

“The market is starting to make a positive move a little bit earlier than normal and should remain strong for quite a while.” Mark in MI

“Several dealers indicated that business picked up last week and judging by the quantity of buyers in the lanes and online this week I would have to agree.” Gene in PA

Three-Year Retention Trends Mid-Size Car, % of Typically Equipped MSRP

Source: Black Book Visual Analytics

The mid-size car retention trend has been declining over the years. Currently, 2015 model year vehicles in this

segment retain only 42.9% of their original typically-equipped MSRP.

Vehicle Highlight 2018 Audi RS 3 only comes in one trim, a four door Quattro equipped with a 2.5L Turbocharged five-cylinder engine that produces 400 horsepower and 354 lb-ft of torque. Standard features include Nappa leather seats, 19” wheels, and panoramic sunroof. MSRP for this compact luxury sedan starts at $55,875 including destination charges and its main competition includes the BMW M2 and the Mercedes-Benz AMG CLA45.

This week’s report includes our Monthly Edition Supplement on Specialty Markets.

3

February 5, 2018

January Auction Sales Approach $350,000,000 “January is considered a bellwether month for the collectible car industry, and this

year did not disappoint! Mecum got the ball rolling with nearly $100,000,000 in

total sales in Kissimmee, and the usual Arizona players kicked in nearly

$250,000,000 more. This month we’ll focus on Mecum and Barrett-Jackson, and save Russo and Steele,

Gooding, Bonhams, RM Sotheby’s, Worldwide, and Silver for next month.”

Eric Lawrence, Director of Specialty Markets

Mecum’s Kissimmee Sale is considered to be the largest collectible car auction in the world. The folks over at Barrett-Jackson may disagree…although Mecum sold more vehicles (2,208 vs 1,709), Barrett-Jackson took in more money ($112,000,000 vs $97,000,000). Let’s just split the difference and say they’re both huge.

Barrett-Jackson is primarily a “no reserve” auction, and as such, saw a very impressive 99% sell-through rate. Mecum, which is more liberal in allowing reserves, came in at a very respectable 73%.

As has been the trend for the past few years, both auctions featured collections put together by notable enthusiasts. This is becoming more and more common as long time collectors begin to exit the hobby.

Notable Recent Auction Sales Include:

2015 Ferrari LaFerrari $3,410,000 (Mecum)

2016 Ferrari F12tdf $1,320,000 (Mecum)

2015 Ferrari 458 Speciale Aperta $726,000 (Mecum)

2011 Porsche 911 GT2 RS $495,000 (Mecum)

1963 Chevrolet Corvette ZO6 $456,000 (Mecum)

2017 Ford GT Coupe (Charity) $2,500,000 (Barrett-Jackson)

2015 Porsche 918 Spyder $1,430,000 (Barrett-Jackson)

1952 Ferrari 212 Europa Coupe $1,100,000 (Barrett-Jackson)

1969 Chevrolet Camaro ZL1 Coupe $770,000 (Barrett-Jackson)

1968 Chevrolet Corvette L88 Coupe $495,000 (Barrett-Jackson)

Ferrari LaFerrari. Courtesy of Mecum Auctions.

-0.24%

-2.94% -3.18%

5.44%

-1.19%

1.29%

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Muscle Cars Pony Cars American Classics Sports Cars Exotic Cars Classic Trucks

Percent Change from February 2017 to February 2018

SPECIALTY MARKETS:

COLLECTIBLE CARS

4

February 5, 2018

RV Values at Auctions Mixed but Stable

“RV values at auction, both motorized and towable, were very stable last month,

with changes of less than two percent. Volume was up across the board, which is

possibly due to sellers “clearing their books” of unwanted inventory they were holding before the end of

the calendar year. There were a larger than usual number of units in poor condition which were sent to

auction last month, which is also not an uncommon solution for end of year “housekeeping”. Eric Lawrence, Director of Specialty Markets

For Motor Homes (including Class A, B, and C)

Average selling price was $46,135, down $583 (1.2%) from previous month

One year ago, the average selling price was $41,444

Auction volume was up 17% from the previous month

For Towables (including Travel Trailers and Fifth Wheels)

Average selling price was $13,533, up $208 (1.5%) from previous month

One year ago, the average selling price was $12,610

Auction volume was up 20% 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

c

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

c

Travel Trailer and Fifth Wheel Value Trends

SPECIALTY MARKETS:

RECREATIONAL VEHICLES

5

February 5, 2018

Powersports Market Slow to Heat Up “February brings a mixed bag to values in the Powersports market. After last month’s above average market performance for the time of year, only the Cruiser and Snowmobile segments exhibit gains for a second consecutive month.”

Scott Yarbrough, Motorcycle & Powersports Editor

The biggest change this month is for the Scooters, up nearly 4 percent, but this is largely a market correction from last month’s drop, bringing them back to roughly where they were three months ago.

While the Cruisers are up for the second month in a row, the gains are not evenly distributed, the Metric models are up significantly more than the Domestic V-Twins, which are mostly flat or only up by negligible amounts.

Ideally, we would like to see the Street Bikes and Dual Sports (both down about 1 percent) start to appreciate this time of year, but it looks like we will have to wait for at least another month.

-0.9%

0.8%

-0.6%

-0.2%

-1.4%

3.8%

2.1%

-0.9%

-0.3%

-0.7%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Motorcycle & Powersports Percent Changes January to February 2018

SPECIALTY MARKETS:

POWERSPORTS

6

February 5, 2018

Wholesale Values Rise in January!

“The word in January that there was a shortage of trucks available to

haul freight apparently caused an already volatile value trend to take an

upward swing resulting in strong wholesale values!”

Charles Cathey - Medium and Heavy Duty Truck Editor

Right at the end of January wholesale values, mostly for the nicer trucks, but others as well, rallied and

resulted in lower overall depreciation than the previous month. The word that more trucks were needed

brought out the buyers and the check books at all levels. This lower depreciation is more apparent in Over

the Road and Regional Tractors in late models (2015-2016) as well as older trucks (2007-2014).

Construction/Vocational continued on a moderately straight line and continues to stay strong, although

the more expensive late models in this segment are dropping a little more. This could continue as

temperatures start to rise and activity picks up if available volume of good condition inventory shows up at

auctions. In conclusion, the more efficient models with the most modern specs will continue to be an

ongoing factor for several years.

DATE

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

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

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

01/01/18 89,413 -492 -0.5% 71,197 -835 -1.2% 62,889 -599 -0.9% 2015-2016

DATE

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

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

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

01/01/18 45,067 -345 -0.8% 31,389 -486 -1.5% 24,068 -346 -1.4% 2007-2014

-$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

7

February 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. True,

increased supply will lower prices most of the time. However, 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