previous use has major impact on sale price of used cars...

July 2014

Previous Use Has Major Impact on Sale Price of Used Cars, Trucks

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Given their druthers, consumers would rather buy an off-lease vehicle than one that has been repossessed or spent its early years as a daily rental. Depending on the market segment, the premium a shopper is willing to pay for a CPO version of a pickup, for example, is more than $800 compared to expecting a discount of more than $4,100 if it had been in a fleet. Why the Differences? To understand the attitude of shoppers depends on historic perceptions. A vehicle that has been in a rental fleet or repossessed is viewed as having a pretty hard life. It has been driven by different people, uncared for as one would their own car or truck and likely abused. While

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none of that is necessarily true, as any good salesperson will admit, perception of quality is mostly in the eyes of the beholder. Should Dealers Reveal Source? When asked if a dealer or private party should reveal the source of a vehicle, the vast majority say it would play a major role in the selection, but the overall decision would be based on the suitability of the car or truck to driving needs; mechanical inspection or certification; an historic document such as Carfax; and price/payment. All of that said, the source can impact how much a customer is willing to pay – and that’s the bottom line.

3 yr Old Asking Prc

Corporate Fleet

Major Rental

Off-‐Brand Rental

Conventional Sedan (Accord) $19,274 $19,043 $18,228 $17,915

% of Asking

98.8% 94.6% 92.9%

$ Discount v Ask

-‐$231 -‐$1,046 -‐$1,359

FS Pickup (F-‐Series Ford) $21,637 $17,528 $18,694 $17,305

% of Asking

81.0% 86.4% 80.0%

-‐$4,109 -‐$2,943 -‐$4,332

Small Car (Scion xB3) $14,286 $13,821 $13,555 $13,172

% of Asking

96.7% 94.9% 92.2%

-‐$465 -‐$731 -‐$1,114

Off-‐Lease CPO Repossessed Accident*

$19,662 $20,047 $18,023 $16,438

102.0% 104.0% 93.5% 85.3%

$388 $773 -‐$1,251 -‐$2,836

$22,238 $22,441 $17,632 $16,359

102.8% 103.7% 81.5% 75.6%

$601 $804 -‐$4,005 -‐$5,278

$14,687 $15,153 $12,639 $12,208

102.8% 106.1% 88.5% 85.5%

$401 $867 -‐$1,647 -‐$2,078

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PRELIMINARY: AutoNation, AutoTrader Top Used-Car Recommendation Lists When used-car buyers are asked to rate their satisfaction with their seller, two names dominate: Among brick-and-mortar stores, AutoNation dealerships ranked first. Among on-line services, AutoTradekr dominated their competitors. Among Brick-‐and-‐Mortars CNW recently asked used-car buyers to rate the selling dealership based on 10 categories on a scale of one to 10.

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Of the possible 100 points, AutoNation garnered 88.4, putting it easily at the top of the B-a-M list. Among On-‐Line Used Sellers We held this one to sales by dealerships rather than including private parties who tend to offer older models. AutoTrader received high scores for ease of use, size and breadth of offerings and rapidity of dealer response to inquiries. Total points: 82.78. We’ll be providing a new White Paper on this study including other used-car sellers later this year.

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Rental Fleets’ Use Still Depressed The daily rental business is a large source of sales for automakers as well as a fairly profitable operation for many new-car dealers as well as the historic national and regional rental companies. But the auto industry relies on rapid turnover of those fleets to bolster their sales numbers. And rapid turnover is based on how much the fleet is used. Unfortunately, as the table below shows, fleet use has not returned to pre-recession levels by a long shot. Shown: The percent of rental fleets in use at least 12 hours per day by day of week.

2006 2014

Winter Shr in Use Shr in Use M 42.8% 38.1% T 43.9% 36.6% W 57.7% 48.2% Th 72.1% 59.5% F 74.6% 62.7% S 77.9% 68.1% S 73.8% 60.3% Unwht Avg 63.3% 53.4%

Spring M 49.3% 44.4%

T 49.8% 45.4% W 60.7% 49.2% Th 72.9% 68.7% F 84.6% 80.1% S 86.1% 83.6% S 87.4% 84.0% Unwht Avg 70.1% 65.2%

Summer M 61.1% 59.8%


Fall M 56.3% 51.5%


Annual Unwht Avg 70.6% 48.1%

Pent-Up Demand Beginning to Dwindle Think of Pent-Up Demand as the water behind a dam. Let the sluice gates open and the pool of water behind the dam begins to diminish. Release too much water and the lake runs dry on both sides of the dam. For the auto industry, this year has been one of drawing down a huge pent-up demand. In January and February, for example, from 8 to 11 percent increase vs. 2013 in the number of consumers who were ready and willing to make a new-vehicle acquisition. All other months, however, saw the gap between last year and this diminishing. Lowest Number of 2014 This drawing-down of potential customers hit a nadir this month with only a CNW estimated 94,000 consumers looking to make a vehicle acquisition within six months vs. 103,500 a year ago. These lower numbers can be offset by only a few actions on the part of automakers, the most often turned to being more discounts to get fresh potential customers to buy earlier than they intended or simply enter the market for a new car or truck. Needless to say, this is expensive and disruptive to the bottom line. So why are there not more people looking for a new vehicle? Why is the Pent Up Demand not quite so Pent Up? As we’ve pointed out in the past, the most significant reason for making a vehicle purchase has been the replacement of a car or truck ravaged by time and the lengthy recession. New cars have become a product of the mind, not necessarily the heart. In fact, it is now used cars that are the emotional buy as much as a financial or necessity purchase. Long Term Concern? The true question is if the current low Pent-Up Demand numbers are a reflection of either a long or short term trend. From all indications, it is likely to be something the auto industry will have to face for at least another two years. All of the leasing, incentivized selling, regional promotions and rebates won’t change the attitude many people have that they simply do not need to replace a current vehicle . With more than 95 percent of all new vehicles now under some sort of incentive compared to under 70 percent in pre-recession times, automakers will have to continue spending massive dollars to draw new customers and rely less on Pent Up Demand.

NEW Pent Up Demand

Pent Up Demand 14 v 13

Mo. '14 Mo. '13 Change Jan '14 101,500 94,250 107.7% Feb 131,400 118,250 111.1% Mar 94,627 101,800 93.0% Q1 14 327,527 314,300 104.2% Apr 100,500 106,500 94.4% May 98,500 101,700 96.9% June 95,750 105,250 91.0% Q2 14 294,750 313,450 94.0% July 94,000 103,500 90.8%

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Reasons Lessees Buy Their Leased Vehicle at End-of-Term

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Approximately 22 percent of all lessees will purchase their leased car or truck at the End of Term (or within six months prior to EOT). The question is, why lease if a purchase is or was the original intention? The number one reason, according to CNW’s annual Lease Trak Study, is because the lessee was taking the car or truck for what amounted to a long-term test drive. “Thought I might purchase this vehicle at EOT if I liked it” was given as the reason by 16 percent of those lessees. The second most common reasons: The replacement lease carried too high a monthly payment. That is, while the customer would probably trade for a newer model, the new-car’s lease (or payment) was simply too much. Those two reasons for buying a leased vehicle are

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consistent, if nothing else. They were the leading rationales in both cy2000 and cy2002 as well as most of the intervening years. Replaced Within a Year CNW also asks the lessee in a follow-up survey if the retained leased vehicle was still in the household a year later. It is surprising how often these off-lease cars and trucks are traded or sold within 12 months of EOT. For example, of those who gave or transferred the leased vehicle to another family member at EOT, fully 90 percent were replaced by yet another vehicle

DOCUMENT 406

% who % who % who SORT BASED ON CY2014 % AT EOT cy2000 replace cy2002 replace cy2014 replace

% at EOT w/I 1 yr

% at EOT w/I 1 yr

% at EOT w/I 1 yr

Thought I might purchase this vehicle at EOT if I liked it 13.1% 11.6% 12.9% 11.2% 16.2% 10.7% Replacement lease vehicle's monthly payment too high 11.1% 7.8% 12.6% 7.9% 13.8% 7.2% Trouble free vehicle 8.1% 14.6% 8.3% 14.7% 9.9% 13.4% Became attached to this vehicle 11.2% 10.9% 11.1% 10.5% 9.3% 9.7% Always intended to purchase this vehicle at EOT 9.6% 8.4% 8.9% 8.5% 7.7% 8.8% Didn't like leasing so purchased this vehicle 7.6% 5.6% 7.4% 5.2% 7.5% 4.4% Other family member needed vehicle 5.2% 92.7% 5.7% 92.3% 7.1% 93.6% Waiting for the introduction of an upcoming model 6.2% 88.6% 6.1% 88.9% 5.6% 89.7% Price lower than Residual Value (Dealer offer) 6.1% 22.2% 5.9% 21.7% 5.4% 19.1% Change in personal life, no longer need a new vehicle 6.7% 14.2% 6.9% 14.6% 5.2% 15.8% Job changed, no longer need a new vehicle 2.9% 17.6% 2.4% 17.7% 3.3% 15.5% Other 3.2% 52.7% 3.6% 53.1% 2.9% 56.4% Price lower than Purchase Option Price (Dealer offer) 4.3% 10.9% 4.1% 10.7% 2.6% 8.8% Price lower than Residual Value (Financial institution offer) 2.8% 14.7% 2.9% 14.2% 1.8% 13.7% Price lower than Purchase Option Price (Financial institution offer) 1.9% 11.8% 1.2% 11.4% 1.7% 10.1%

100.0%

100.0%

100.0%

6+

cy2014 Hispanic/

Cuban Hispanic Mexican

HispanicCA

HispanicSA

Family 88.1% 82.7% 89.3% 76.7% Social 85.2% 70.6% 77.9% 72.3% Preference 51.5% 38.6% 43.9% 45.6% Adult Present 90.6% 82.3% 86.6% 75.4% No Adult

Present 43.2% 25.9% 29.9% 24.7%

Vietnamese Chinese Japanese Tai

Mid East

Family 97.8% 58.8% 44.4% 97.1% 97.8% Social 96.4% 57.2% 36.7% 92.5% 95.1% Preference 75.3% 55.7% 39.5% 88.1% 87.6% Adult Present 97.1% 60.1% 65.6% 98.4% 98.7% No Adult Present 73.4% 49.7% 21.3% 85.8% 88.4%

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Native Language Preferences Between 1924 and 1965, mass migration into the U.S. was halted. The Federal Government decided the flood of new immigrants had to be assimilated into the education and housing and cultural systems and the existing systems were overloaded and unable to assimilate immigrants quickly enough. One of the areas of biggest concern was the ability of new immigrants to speak English. As the accompany table shows, about 88 percent of Cuban immigrants speak Spanish at home and a similar number at social gatherings. Mexican immigrants show significantly more interest in speaking English with 82.7 percent preferring Spanish at home among family but less than 71 percent in Social gatherings. Japanese are the most likely to speak English in virtually all circumstance while Middle-Eastern immigrants are least likely to

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speak in a language other than their own regardless of circumstances. When compared to the same study conducted in 2005, virtually all of the national breakdowns show a decrease in native-language use and preference except for Middle Eastern and Central American immigrants. Central Americans, for example, had a 19 percent increase in study-over-study native language preference. For more details, see Document 510 at CNWbyWEB.com.

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Closing RaVo v Lst Mo

Closing Ra:o V Same Mo. Last Year

40.00%!

47.50%!

55.00%!

62.50%!

70.00%! Share Retail!

Sub-‐Prime Approval v Last Month

Sub-‐Prime Approval v Last Year Ji#ers'Index'

L:'v'Prev'Mo'R: v Yr Ago!

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With news that Pent Up Demand is shrinking (see Page 1), and the horrible slow-down of sales during the second half of June, the outlook for July is only marginally good. Here’s why: Jitters Up While the Jitters Index improved in the first half of July compared to a year ago with a 3.23 percent decline in concerns, it rose nearly 1.5 percent compared to June (see Back Page). Concerns are across the board with all categories showing marked worsening vs. the previous month. That said, the data vs. a year ago is somewhat more positive, but consumer attitudes have become “immediate” rather than long term. Put another way, consumer spending is based on how the shopper feels “today.” How that shopper felt a year ago is significantly less important. New Floor Traffic Anemic With only a 1.2 percent increase in first-half July floor traffic, it is clear that shoppers held back. Weather can’t be blamed, as it was this past Winter, so the only conclusion is that consumers were simply not excited about new vehicles. That may change during the second half of July and floor traffic might improve, but if the first half is any indication, the month is unlikely to be a barn-burner. Closing Ratios Plummet While floor traffic increases, the number of people dealers are “closing” fell about 6.8 percent in the opening weeks of July. The simple indication is that shoppers just weren’t quite ready to buy. They might return to make a purchase in the second half of July or in later months, but there is always the concern that they may not return at all.

New Floor Traffic

3.00%

Same Store Sales

4.15%

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3.91%

1.16%

-‐6.78%

-‐9.08%

7.67%

1.46%

-‐3.23%

7.50%

July: 61.59%

July: A Problem For Automakers?

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Sub-‐Prime Bright Spot In both a comparison with last year and last month, sub-prime approvals have shown strength in the opening weeks of July. Sub-Prime vs. a year ago climbed 7.5 percent and was up by nearly 4 percent from June’s figure. Conclusion July sales should be an improvement vs. year ago, but as of this date it looks as if the total units delivered will be hard pressed to top 1.36 million units unless some serious incentive money is spent. That’s a 3 percent increase vs. a year ago. (See

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500 550 600 650 700 750

cy95

cy02

May

Dec

Jul

Feb

Sep

Apr

Nov

June

Jan '10

August

Mar

Oct

May

Dec

July

Feb

Used FICO Score (Avg.)

500

550

600

650

700

750

Ret Mil Officer

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in higher Days’ Supply. The alternative scenario is that the industry isn’t selling vehicles as quickly and that’s causing a backlog of cars and trucks. Unfortunately, the latter alternative is reflected in a slight decline in used sales this month – about 0.4 percent. FICO scores for used-car buyers continues to fall with July at 575.6. Banks and Credit Unions are

Anticipated

July Actual July % Chng YTD YTD % Chng

Document 106m cy14 cy13 14 v 13 cy14 cy13 14 v 13

Franchised Dealer Sales 1,676,668 1,755,418 -4.5% 9,015,813 9,052,894 -0.4%

Independent Dealer Sales 1,467,941 1,541,748 -4.8% 8,134,014 8,167,950 -0.4%

Casual (Private) Sales 1,422,724 1,286,453 10.6% 7,762,495 7,507,318 3.4%

Total Sales 4,567,333 4,583,619 -0.4% 24,912,322 24,728,162 0.7%

Franchised Independent Franchised Franchised Independent Independent Document 107m Asking Price Asking Price Trans Price % of Asking Trans Price % of Asking Jan-14 $11,429 $9,942 $10,843 94.87% $9,513 95.68% Feb '14 $11,221 $9,694 $10,658 94.98% $9,291 95.84%

Mar '14 $11,396 $9,847 $10,946 96.05% $9,490 96.37% Apr '14 $11,372 $9,811 $10,931 96.12% $9,469 96.51% May '14 $11,408 $9,967 $10,979 96.24% $9,621 96.53%

June '14 $11,516 $10,482 $11,162 96.93% $10,109 96.44%

July '14 $11,502 $10,336 $11,150 96.94% $9,949 96.26%

July '13 $11,563 $10,101 $11,010 95.22% $9,527 94.32% Aug '13 $11,592 $10,227 $11,058 95.39% $9,687 94.72%

Sept '13 $11,729 $10,437 $11,193 95.43% $9,903 94.88%

Oct '13 $11,482 $10,223 $10,825 94.28% $9,667 94.56%

Nov. '13 $11,367 $10,205 $10,720 94.31% $9,625 94.32%

Dec. 13 $11,419 $10,324 $10,855 95.06% $9,871 95.61% Mo. Vs Yr Ago -0.53% 2.33% 1.27% 1.81% 4.43% 2.06% This Mo v Last Mo -0.53% 2.33% 1.27% 1.81% 4.43% 2.06%

July Used Market Sees Increase in Days’ Supply

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It doesn’t seem like much – less than 0.4 percent – but the used-car industry is seeing slight increases in the number of units on the lot. What it portends, at this point, is hard to determine because many of the larger used-car sellers such as AutoNation and CarMax are scouring hills and dales to find middle-aged models for their lots and putting those vehicles in inventory. Larger inventory results

Used Days Supply

0.39%

July: 575.56 Enlisted

July: 605.14

Officers July: 709.34

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pushing hard to get sub-prime loans to customers. Sales to military officers and enlisted men are up in total with higher FICO scores.

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2

month-over-month but down 5.6% year-over-year. Sales of certified pre-owned (CPO) vehicles were down 7.4% versus May and down 2.4% from the prior year, based on figures from Autodata.

1The analysis is based on over six million annual sales transactions from over 150 of the largest U.S. wholesale auto auctions, including those of ADEA as well as other auction companies. ADESA Analytical Services segregates these transactions to study trends by vehicle model class.The views and analysis provided herein relate to the vehicle remarketing industry as a whole and may not relate directly to KAR Auction Services, Inc. The views and analysis are not the views of KAR Auction Services, its management or its subsidiaries; and their accuracy is not warranted. The statements contained in this report and statements that the company may make orally in connection with this report that are not historical facts are forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “bode”, “promises”, “likely to” and similar expressions identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the company’s Securities and Exchange Commission filings. The company does not undertake any obligation to update any forward-looking statements.

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Wholesale prices in June softened more than their usual seasonal tendency, although they remain significantly above year-ago levels.

There was a bit of a respite in year-over-year retail used vehicle sales growth after strong months in March, April and May.

June was a great month for new vehicle sales, however, and the associated trade-in activity should result in some attractive retail units along with additional wholesale supply.

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in June averaged $10,004 -- down 3.1% compared to May, and up 4.7% relative to June 2013. Prices softened on a month-over-month basis across virtually all model classes, with midsize SUVs being the hardest hit.

Prices for used vehicles remarketed by manufacturers were actually up 0.6% month-over-month (for those units that were not no-saled), though down 0.1% year-over-year, reflecting volume pressure. Prices for fleet/lease consignors were down 3.9% sequentially and up 2.5% annually.

Dealer consignors saw a 2.3% average price decrease versus May, and a 3.4% uptick versus June 2013.

Based on data from CNW Research, retail used vehicle sales in June were up 2.0%

Kontos Kommentary

Wholesale Used Vehicle Price Trends Average Prices ($/Unit) Latest Month Versus:

Jun-14 May-14 Jun-13 Prior Month Prior Year

Total All Vehicles $10,004 $10,328 $9,554 -3.1% 4.7% Total Cars $8,932 $9,226 $8,642 -3.2% 3.3% Compact Car $6,890 $7,267 $6,799 -5.2% 1.3% Midsize Car $8,128 $8,504 $7,946 -4.4% 2.3% Fullsize Car $7,154 $7,200 $7,120 -0.7% 0.5% Luxury Car $12,443 $12,668 $11,769 -1.8% 5.7% Sporty Car $12,981 $13,140 $12,551 -1.2% 3.4% Total Trucks $10,565 $10,914 $9,612 -3.2% 9.9% Mini Van $6,834 $7,311 $6,401 -6.5% 6.8% Fullsize Van $11,307 $11,237 $9,853 0.6% 14.8% Mini SUV $12,701 $13,020 $11,563 -2.5% 9.8% Midsize SUV $7,497 $8,387 $6,602 -10.6% 13.6% Fullsize SUV $10,646 $10,901 $10,886 -2.3% -2.2% Luxury SUV $19,798 $19,765 $18,322 0.2% 8.1% Compact Pickup $7,576 $7,723 $7,283 -1.9% 4.0% Fullsize Pickup $13,128 $13,343 $11,857 -1.6% 10.7% Total Crossovers $12,392 $12,817 $12,627 -3.3% -1.9% Compact CUV $11,343 $11,575 $11,338 -2.0% 0.0% Mid/Fullsize CUV $13,495 $14,095 $13,995 -4.3% -3.6%

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1

The Toyota brand is in the midst of a blitz for its 2015 RAV4. The crossover was Toyota's third-best seller in the USA during the first half of this year with nearly 117,000 sold. And it deserves a much better, more cohesive effort. The current pair of :30 national TV commercials, out for about a month, really don't do justice to the RAV4. They are slice-of-life ads that are supposed to be amusing. But the spots give us very little info about the vehicle and aren't that entertaining. One of the spots shows a family of three bopping down a tree-lined street with a giant, pink, stuffed unicorn strapped to the roof. The dad is the ad's narrator. “Why is she strapped to the roof of my car? Well, if you have kids, you know why.”

The other ad shows a family of four at their camp site under the stars dancing to music with their disco ball from home. I would not be happy if I was camping near this family. There were more comments on YouTube about the music in this spot than the vehicle or the creative. (It's “Nights Like This” from Eli Paperboy Reed).

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Toyota, via its ad agency, Saatchi & Saatchi, is painting the RAV4 as a fun vehicle that can “turn a family outing into a family adventure.” Strapping a big stuffed animal to the roof of your car doesn't seem that much fun. And most kids would probably have more fun roasting marshmallows or making smores around a campground than dancing with their parents. Isn't it a bit mystifying that a big stuffed animal can't fit inside the RAV4, but a family of 4 AND all their camping gear can? Sorry, but not a very good effort. Let's REALLY go places creatively next time, okay? BMW Lights It Up Meanwhile, BMW is stirring things up with a recent 2-minute video for the M4 Coupe airing on YouTube with links via social media. The exciting work, from BMW Canada's shop, Cundari in Toronto, is dubbed “The Ultimate Racetrack.” It shows the car zooming and drifting around what looks to be a racetrack. There's no voiceover, just the screaming engine and squealing tires. Viewers learn about 30 seconds in that the M4 is speeding around the deck of an aircraft carrier. Yikes! One false move and the car would skid into the drink! But of course it doesn't. The buzz online is that the scenario is faked, mainly because carrier decks aren't shaped with round edges. And there's plenty of comments on whether BMW would spring for the cost of

21

Jean Halliday’s Ad Wrap

Toyota Stalls on RAV4; BMW Revs Up Web

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renting an airline carrier. Who cares? The video is not only exciting; it attracted 2.5 million You Tube views in its first 5 days. VERY impressive.

Whether it will help sell the M5 is another matter. But the work is true to the BMW brand and its “Ultimate Driving Machine” ad tag, not to mention a tip of the hat to BMW's aircraft engine history. If you haven't seen it yet... https://www.youtube.com/watch?v=AFtUpMTs4vI

Certainly the Big Idea of using an aircraft carrier in a car ad isn't a new idea. There's been LOTS of them in North America and around the globe. In the late 1980s, a Citroen spot showed its Visa GTI “taking off” from an aircraft carrier in a side-by-side race against a plane. Audi nearly duplicated that in a 2011 online video featuring an R8. Saab touted the 900's acceleration AND braking atop a carrier back in 1997 in a commercial that also referred to its airplane heritage. Toyota drove a Yaris off an aircraft carrier into the ocean in an Australian spot for its 2008 Yaris “Clever Enough to be Almost Anything” blitz. Volkswagen's Citi Golf flew off a carrier in an Australian commercial, but all 3 vehicles were able to “fly” and not get wet. Even Buick got into the act in a spot for the 2005 LaCrosse starring racer and stunt driver Brad McCabe. So it appears BMW got it right. An aircraft carrier is indeed the ultimate racetrack!

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%

12

*Deliveries not sales July 1-15 July 1-15 % Chng Actual Sales July '14 Full Mo cy2014 cy2013 14 v 13 July '13 Sales Change New Cars Extension

Detroit 3 145,251 142,691 1.8% 186,657 190,006 1.8% Asian 166,328 161,348 3.1% 391,848 403,942 3.1% European 42,262 40,023 5.6% 91,238 96,342 5.6%

Ttl Pass. Cars 353,841 344,062 2.8% 669,743 690,290 3.1%

New Trucks Detroit 3 227,671 223,684 1.8% 376,913 383,631 1.8% Asian 48,429 45,546 6.3% 233,236 248,000 6.3%

European 6,533 6,297 3.7% 33,486 34,741 3.7% Ttl Lt. Trucks 282,633 275,527 2.6% 643,635 666,372 3.5%

Ttl Industry 636,474 619,589 2.7% 1,313,378 1,356,662 3.3%

July 1-15 Full July % Chng Prev Mo Prev Mo % Chng

cy2014 cy2013 14 v 13 cy2014 cy2013 14 v 13

Lease Share 29.7% 28.4% 4.4% 29.2% 26.6% 9.8% Floor Traffic - New (105m) 95.1 98.71 -3.7% 97.91 92.66 5.7% Floor Traffic - Used (105m) 98.01 97.32 0.7% 100.06 96.79 3.4%

July 1-15 Prev Yr % Chng % Chng Pent Up Demand Units

cy 14 cy2013 Same Mo

'14 Prev Mo July est. '14 94,000

Avg. New MSRP (101m) $38,421 $38,227 0.51% 0.03% July '13 103,500 Total Discounts $6,120 $5,551 10.25% -0.16% % Change -9.2%

Manufacturer Incentives $4,885 $4,166 17.26% 0.01%

Dealer Incentives $1,235 $1,385 -10.83% -0.85% Purchase

Delay Months Core Transaction Price**** $32,301 $32,676 -1.15% 0.06% July est. '14 2.91 % Mfg Incentive of MSRP 12.71% 10.90% 16.7% July '13 3.09 % Ttl Discounts of MSRP 15.93% 14.52% 9.7% % Change -5.8%

Fed Gas Child's Job Day to

Day Condition of Food Local Jitters

Taxes Prices Edu* stability Needs**** Investments** Prices Taxes*** Index

v Prev Mo 3.23% 1.23% 3.39% 0.00% 2.02% 2.37% 0.20% 0.92% 1.48%

v Mo. '13 -3.62% 4.64% 1.24% -10.27% 0.80% -19.44% -0.50% -1.11% -3.23%

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Jitters Index Summary

previous use has major impact on sale price of used cars...

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