January 1, 2018

“The last full week of 2017 saw the steepest decline of the year in the overall car segment.”

Anil Goyal, Senior Vice President of Automotive Valuation and Analytics

Model Years: 2009-2015, Volume Weighted Wholesale Average Values, Weekly Change from 12/22/17 to 12/29/17

Record Decline for Car Segment

Volume-weighted, overall car segment values declined by 0.78% last week, the highest weekly

depreciation rate this year.

The Mid-size segment received the highest weekly depreciation rate at 1.18%, followed closely by the

Compact segment at 0.93%.

Volume-weighted, overall truck segment (including pickups, SUVs and vans) values declined by 0.54%

last week. In line with the average weekly adjustment of 0.57% over the previous four weeks.

The Sub-Compact Luxury Crossover segment performed the worst, decreasing by 1.38%.

-$38-0.72%

-$66-0.93%

-$97-1.18%

-$26-0.26%

-$79-0.53%

-$137-0.76%

-$141-0.45%

-$93-0.67%

-$181-0.49%

-$77CARS

-0.78%

-1.4%

-1.2%

-1.0%

-0.8%

-0.6%

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0%

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-$70-0.62%

-$35-0.30%

-$98-0.66%

-$87-0.41%

-$231-1.38%

-$133-0.71%

-$120-0.61% -$233

-0.76%

-$51-0.43%

-$4-0.05%

-$56-0.41%

-$1+0.00%

-$133-0.70%

-$85TRUCKS-0.54%

-1.6%

-1.4%

-1.2%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0%

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2

January 1, 2018

Sentiment from the Auction Lanes

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

“The sellers were holding firm on their floors hoping for an early spring

market after the first of the year. This pattern resulted in many no-sales.”

Tim in TX

“Vehicles under $10,000 sold well and the attendance was ok.” Bret in SC

“Dealers are being extra careful not to overspend which is a normal exercise

for this time of year.” Rick in FL

“No-sales seemed to rule the day, although the less expensive cleaner units did ok.” Laura in PA

One-Year Trendline – Cars

Vehicle Highlight

2018 Kia Stinger GT2 AWD is equipped with a 3.3L Twin Turbo V6 GDI Lambda II engine mated to an 8-speed automatic transmission. This Fastback Sport Sedan engine produces 365 hp and 376lb.-ft of torque, accelerating it from 0-60 mph in 4.7 seconds and achieving a governed top speed of 167 mph. MSRP starts at $51,400 plus a $900 destination fee. The key competitors include the Audi S5 Premium Plus, BMW 440xi Gran Coupe, and the Infiniti Q50 Red Sport.

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

-1.00%

-0.80%

-0.60%

-0.40%

-0.20%

0

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+0.40%

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Weekly Change (Cars)

3

January 1, 2018

Arizona Auction Week is Here! “We’ve been looking forward to it for months, and Arizona Auction Week is now

here. Hundreds of thousands of collectors, enthusiasts, and dealers are on their

way to sunny Scottsdale to attend auctions hosted by Barrett-Jackson, Russo and

Steele, RM Sotheby’s, Bonham’s, Gooding, Silver, and Worldwide. We expect to see big numbers,

especially given the recent tax changes, and several new world records set.”

Eric Lawrence, Director of Specialty Markets

RM Sotheby’s ICONS Sale, featuring thirty iconic vehicles primarily from the post war era, was very successful, totaling $45,500,000 with an 84% sell through rate, with eleven cars selling for more than $1,000,000.

Leake’s Dallas and McCormick’s Palm Springs auctions had very similar results: Leake with a very respectable $6,600,000 with a 70% sell through and McCormick at $6,120,000 and 64%.

Mecum’s biannual Kansas City auction, one of their smaller sales, brought in $8,200,000 with a sell through rate of 56%. Mecum’s huge Kissimmee sale, featuring approximately 3,000 vehicles, will run January 5th – 14th, and often “sets the table” for the series of auctions held in Scottsdale the following week.

Notable Recent Auction Sales Include:

1959 Ferrari California Spider LWB Alloy $17,990,000 (RM Sotheby’s)

2018 Bugatti Chiron $3,772,500 (RM Sotheby’s)

1965 Aston Martin DB5 Convertible $2,700,000 (RM Sotheby’s)

2015 Porsche 918 Weissach Spyder $1,732,000 (RM Sotheby’s)

1955 Mercedes Benz 300SL Gullwing $1,352,000 (RM Sotheby’s)

2016 Ferrari F12tdf $1,100,000 (RM Sotheby’s)

2005 Ford GT $265,000 (Mecum)

1971 Ford Mustang Boss 351 Fastback $75,000 (Mecum)

1929 Packard Phaeton $154,875 (McCormick)

1958 Chevrolet Impala Convertible $74,550 (McCormick)

Bugatti Chiron. Courtesy of RM Sotheby’s.

41000

42000

43000

44000

45000

46000

47000

48000

American Post War Classics

SPECIALTY MARKETS:

COLLECTIBLE CARS

4

January 1, 2018

RV Values at Auctions Mixed Once Again “Last month we noted that the values for towable and motorized units had

moved in different directions for the first time in several months. They did it

again this month, although in the opposite direction. Values typically fall as we head into the heart of

the winter, with many dealers in the colder states sitting on the sidelines and waiting a few more

months before stocking up for the spring selling season.” Eric Lawrence, Director of Specialty Markets

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

Average selling price was $46,718, down $2,493 (5%) from previous month

One year ago, the average selling price was $35,015

Auction volume was up 12% from the previous month

For Towables (including Travel Trailers and Fifth Wheels)

Average selling price was $13,325, up $740 (5.8%) from previous month

One year ago, the average selling price was $11,181

Auction volume was down 9% from the previous month

30000

35000

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Jan

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Motor Home Value Trends

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Travel Trailer and Fifth Wheel Value Trends

SPECIALTY MARKETS:

RECREATIONAL VEHICLES

5

January 1, 2018

Powersports Market Enters Winter Mode “The Powersports Market is entering the New Year on a positive note. Most of the segment changes are fairly modest this month, with both Cruisers and Off-Road bikes up a bit, marking an early beginning for the Spring selling season.”

Scott Yarbrough, Motorcycle & Power sports Editor

Most segments see only minor changes in value this month except for the Scooters, down 2.8%; Street Bikes, down 1.7%; and the Snowmobiles, up 1.9%.

Even though the change is small at 0.4%, both the Cruisers and the Off-Road bikes have begun to appreciate at the auctions, likely signaling that dealers are beginning to stock up for the Spring selling season early this year.

2018 is starting off ahead of 2017 as prices for all segments (except Snowmobiles) did not start increasing in value until February, or even March in a few cases last year. This is a good sign as 2017 was a somewhat lackluster year overall in the Power sports industry.

-0.3%

0.4%

-0.9%

0.4%

-1.3%

-2.8%

1.9%

-1.7%

-0.3%

-1.0%

-4.0%

-3.0%

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1.0%

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Motorcycle & Powersports Percent Changes December 2017 to January 2018

SPECIALTY MARKETS:

POWERSPORTS

6

January 1, 2018

Clean Late Model HD Trucks Drop in Value, But Still Do Well! “Key factors for late model HD Value Retention has always been Condition, Mileage and Good Specs, but those attributes play a factor now more than ever!” Charles Cathey

Late Model Over the Road Units are a group of trucks that stands to lose the most from the original dollar invested. Condition and mileage dominate how this segment performs, and they dropped .3% more in December than they dropped in November. Savvy late model buyers continue to pay up for these units while expanding or replacing older equipment. These buyers take advantage of first and second year "depreciation" plus not having to pay federal excise tax, which is included in the price when a new truck is purchased. This tax can range between $13,000 to $16,250 based on what most new Over the Road trucks are selling for. Since this tax is a huge part of the first year drop in value it assists the late model used truck buyer in reducing their investment while updating their equipment. Construction/Vocational trucks continue to bring strong numbers at all levels. Construction, highway infrastructure, and highway expansion projects are the major factors in maintaining their values. Even the older and much older trucks in this segment continue to sell for record values especially if the buyers are check writers. Even though these trucks must comply with federal engine emission standards they don't have to comply with much of the additional requirements imposed on the Over the Road units. Regional Tractors don't bring the premium that they once did over long haul road tractors except for a few models but if they are equipped properly they still hold their value well.

DATE

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

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

12/01/17 89,905 -423 -0.5% 72,032 -653 -0.9% 63,488 -507 -0.8% 2015-2016

2015-2016 HD Construction/Vocational segment dropped an average of $492 (0.5%) in December compared to the average decline of $423 (0.5%) in November.

2015-2016 HD Over the Road Tractor segment dropped an average of $835 (1.2%) in December compared to the average drop of $653 (0.9%) in November.

2015-2016 HD Regional Tractor segment dropped an average of $599 (0.9%) in December compared to the average depreciation of $507 (0.8%) in November.

DATE

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

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

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

12/01/17 45,411 -381 -0.8% 31,875 -611 -1.9% 24,414 -431 -1.7% 2007-2014

2007-2014 HD Construction/Vocational segment dropped an average of $345 (0.8%) in December compared to the $381 (0.8%) in November.

2007-2014 HD Over the Road Tractor segment dropped an average of $486 (1.5%) in December compared to $611 (1.9%) average depreciation in November.

2007-2014 HD Regional Tractor segment dropped an average of $346 (1.4%) in December compared to the average drop of $431 (1.7%) in November.

-$1,200-$1,000

-$800-$600-$400-$200

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AVERAGE WHOLESALE VALUE CHANGES (MARKET)

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors

SPECIALTY MARKETS:

HEAVY DUTY

7

January 1, 2018

Continued Strength in Older Model Years

“Both Late and Older Models stabilizing as we Welcome 2018.”

Josh Giles - Senior Truck Editor

The Medium Duty wholesale market continues its downward trend as we get ready

to open the doors to 2018. We hope that you and your business have a wonderful and prosperous New Year. This past

month Late Model units (2015-2016) dropped a weighted average of $296 (0.6%), which is less than the previous five

months. This is the smallest decline in December that we have seen for this segment in many years. The Older Model

Year Segment dropped an average of $127 (0.6%) in December, which is less than the previous month when we

watched this segment drop an average of $154 (0.8%). This is the third consecutive month where the depreciation on

this segment has eased up a bit. Wholesale and Retail demand remains strong as fewer and fewer units find their way

to the auction blocks. This makes for a stable market with less data supporting a large downward adjustment. Some

units performed better in December compared to November. The units in these segments are veritable and perform

countless daily jobs that we expect the demand for these units to increase. Also, we feel like there is some pent-up

demand in these segments. So, even as supply slowly increases over the next few years we do not expect prices to fall

drastically.

DATE

Medium Duty MODEL

YEARS

DATE

Medium Duty MODEL

YEARS Value $ Change % Change Value $ Change % Change

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

12/01/17 45,964 -321 -0.7% 2015-2016 12/01/17 19,702 -154 -0.8% 2007-2014

Locally we have seen just a little relief, but overall, not too much has changed as far as fuel prices from last

month. We are currently paying an average of $2.91 per gallon for diesel, which is decrease of $0.01 from last

month. Overall fuel prices haven’t been this high since July of 2008. Some predictions have fuel prices slowly

increasing through January and leveling off in February before returning to current market price.

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-$0.01-$0.01+$0.00

+$0.01

+$0.00

+$0.03

+$0.37+$0.42+$0.44

+$0.51+$0.49+$0.47

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12/18/1712/11/1712/04/1711/27/1711/20/1711/13/17

Diesel Price Changes

Price Chg/Week Price Chg/Year

SPECIALTY MARKETS:

MEDIUM DUTY