December 4, 2017

“Small cars and sub-compact crossovers declined the most last week. Car segments experienced the highest depreciation so far this year in November.”

Anil Goyal, Senior Vice President of Automotive Valuation and Analytics

Model Years: 2009-2015, Volume Weighted Wholesale Average Values, Weekly Change from 11/24/17 to 12/1/17

Highest Depreciation for Compact Cars in 26 Weeks

Volume-weighted, overall car segment values declined by 0.66% last week. In comparison, car values

decreased on average by 0.57% per week in the previous four weeks.

In cars, Sub-Compact Car and Compact Car segments performed the worst, decreasing by 1.12% and

0.86%, respectively.

Volume-weighted, overall truck segment (including pickups, SUVs and vans) values declined by 0.34%

last week. In comparison, truck values decreased on average by 0.43% per week in the previous four

weeks.

In trucks, Sub-Compact Crossover segment performed the worst decreasing by 1.38%.

-$62-1.12%

-$63-0.86%

-$51-0.60%

-$28-0.27%

-$90-0.60% -$145

-0.79%

-$232-0.74%

-$79-0.56%

-$141-0.38%

-$67CARS

-0.66%

-1.8%

-1.4%

-1.0%

-0.6%

-0.2%

+0.2%

WEE

KLY

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AN

GE

-$162-1.38%

-$56-0.46%

-$51-0.33% -$140

-0.65%

-$18-0.11% -$48

-0.25%

-$11-0.06%

-$131-0.42%

-$22-0.18% -$33

-0.39%-$72

-0.51%

+$69+0.49%

-$62-0.32%

-$54TRUCKS-0.34%

-1.8%

-1.4%

-1.0%

-0.6%

-0.2%

+0.2%

+0.6%

WEE

KLY

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AN

GE

2

December 4, 2017

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

“The sale was low on inventory, which kept the prices fairly stable.” Frank in AZ

“Dealers need clean vehicles but there weren’t that many here. The late model units struggled to make the set floor prices.” Rick in FL

“Not enough truck supply here today to satisfy the demand.” Robert in PA

“We had a pretty decent sale here thanks to the online buyers. The in-lane attendance continues to decline.” Matt in CO

12-Month Depreciation Rate By Vehicle Segment

Depreciation rates for the past 12-month period were higher for luxury cars and sub-compact cars while the

pickup trucks performed the best with depreciation rates in single digits.

Vehicle Highlight 2018 Lincoln Navigator is equipped with a 3.5L Twin Turbocharged V6 producing 450 hp and 510 lb.-ft. of torque, paired to a 10-Speed automatic transmission. Trim levels include the Premiere, Select, Reserve and Black Label with MSRP ranging from $73,250 to $94,900 including destination. The key competitors include the Cadillac Escalade, Infiniti QX80, Lexus LX, and the Mercedes GLS 550.

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

3

December 4, 2017

Muscle Cars and Race Cars Take Center Stage “Although Scottsdale is seemingly right around the corner, and we’re being teased

almost daily by breathless emails from auction houses about the important cars

that will be offered, there has also been strong activity in the affordable section of

the spectrum. Several significant race cars have recently come to market as well, bringing big money.”

Eric Lawrence, Director of Specialty Markets

RM Sotheby’s Contemporary Art Evening Sale, would not typically be featured here, but this year they sold Michael Schumacher’s Monaco Grand Prix, Driver’s Championship, and Constructor’s Championship winning Ferrari F2001 race car for $7,500,000, the most valuable modern era F1 car ever sold at auction.

Bonham’s Bothwell Ranch auction featured two of the most important pre-WWI racing cars still in existence. Total sales were $13,700,000, and all fifty historic lots were declared sold.

Mecum’s inaugural Las Vegas auction was a success, with 557 of 892 collectible vehicles selling for $22,000,000, and a very respectable 65% sell through rate. The stars of the show were a pair of 1968 Yenko Camaro coupes, but following not too far behind were two well restored 1969 Boss 429 Mustangs.

Notable Recent Auction Sales Include:

2001 Ferrari F2001 ex Schumacher $7,500,000 (RM Sotheby’s)

1968 Chevrolet Camaro Yenko 427 $600,000 (Mecum)

2006 Ford GT Coupe (514 miles) $290,000 (Mecum)

1969 Ford Mustang Boss 429 Fastback $200,000 (Mecum)

1958 Pontiac Bonneville Convertible $160,000 (Mecum)

1967 Chevrolet Corvette Coupe 427/435hp $145,000 (Mecum)

1972 DeTomaso Pantera $78,500 (Leake)

1964 Porsche 356 C Coupe$55,000 (Leake)

1914 Peugeot L45 Grand Prix $7,260,000 (Bothwell)

1908 Benz Prinz Heinrich Raceabout $1,870,000 (Bothwell)

Ferrari F2001. Courtesy of RM Sotheby’s.

11000

11500

12000

12500

13000

13500

14000

14500

15000

15500

Classic Pickup Trucks and SUVs

SPECIALTY MARKETS:

COLLECTIBLE CARS

4

December 4, 2017

RV Values at Auctions Mixed as Winter Approaches “For the first time in several months, the values of motorized units and towables

have moved in different directions. Motor homes notched their fifth consecutive

increase, while towables declined quite a bit, although they are right about where they should be if you

factor in seasonality. The volume of all units sold at wholesale auction was down significantly, which is

normal for this time of year, as many dealers are beginning to “settle in” for the winter.” Eric Lawrence, Director of Specialty Markets

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

Average selling price was $49,211, up $674 (1.3%) from the previous month

One year ago, the average selling price was $38,206

Auction volume was down 30% from the previous month

For Towables (including Travel Trailers and Fifth Wheels)

Average selling price was $12,585, down $2006 (13.7%) from the previous month

One year ago, the average selling price was $13,129

Auction volume was down 25% from the previous month

30000

35000

40000

45000

50000

55000

Jan

-13

Feb

Mar

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May Jun

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Oct

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Jan

-15

Feb

Mar

Ap

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July

Au

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pt

Oct

No

vD

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Jan

-16

Feb

Mar

Ap

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July

Au

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pt

Oct

No

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Jan

-17

Feb

Mar

Ap

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July

Au

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Motor Home Value Trends

9000

10000

11000

12000

13000

14000

15000

Jan

-13

Feb

Mar

Ap

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Jul

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May Jun

Jul

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Oct

No

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Jan

-15

Feb

Mar

Ap

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July

Au

gSe

pt

Oct

No

vD

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Jan

-16

Feb

Mar

Ap

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July

Au

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pt

Oct

No

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Jan

-17

Feb

Mar

Ap

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July

Au

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Travel Trailer and Fifth Wheel Value Trends

SPECIALTY MARKETS:

RECREATIONAL VEHICLES

5

December 4, 2017

Powersports Market Enters Winter Mode “Snowmobiles lead the way this month with a nearly 6% increase in value as we head into the colder months. The rest of the market is in its traditional wintertime ‘slow’ period, as all the other segments are down in value, although not by huge amounts.”

Scott Yarbrough, Motorcycle & Powersports Editor

As mentioned above, the Snowmobiles lead the way this month with a 5.9% increase. These units are some of the most variable in price that we see. There are not many that run through most auctions, and yearly variations in the severity of winter weather greatly affect demand and pricing.

Most of the rest of the segments are down by moderate amounts as we are now in the slowest part of the powersports market’s seasonal adjustments.

Off-Road bikes are down a bit more than the other segments with a drop of 2.4%. They have been relatively strong over the recent months, so this is likely a minor market correction, bringing their seasonal average declines in line with the rest of the market.

-0.5%-1.3%

-0.3%

-2.4%

-0.7%

-2.2%

5.9%

-2.1%-1.4%

-0.3%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Motorcycle & Powersports Percent Changes November to December 2017

SPECIALTY MARKETS:

POWERSPORTS

6

December 4, 2017

Late Model Over the Road Units Depreciation Decreases, Even As Volume

Increases

“Late Model Over the Road Tractors have leveled off while the older

year models have been up and down but depreciating more since early

summer.” Charles Cathey - Editor HD Data

Large quantities of like kind Over the Road Tractors have been significant in

influencing the market within several recent sales. Scores of like kind trucks at one sale, particularly the late models,

would normally cause the sales prices to drop dramatically. However, small to medium size fleets are stepping up

and paying more to upgrade. The last time we have observed this type of supply bringing values this strong was back

in 2006-07 when Detroit 12.7L’s were dominating the lanes.

DATE

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

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

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

11/01/17 90,328 -385 -0.4% 72,685 -806 -1.1% 63,994 -567 -0.9% 2015-2016

2015-2016 HD Construction/Vocational segment dropped an average of $423 (0.5%) in November compared to the average decline of $385 (0.4%) in October.

2015-2016 HD Over the Road Tractor segment dropped an average of $653 (0.9%) in November compared to the average drop of $806 (1.1%) in October.

2015-2016 HD Regional Tractor segment dropped an average of $507 (0.8%) in November compared to the average depreciation of $567 (0.9%) in October.

DATE

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

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

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

11/01/17 45,793 -296 -0.6% 32,486 -540 -1.6% 24,845 -369 -1.5% 2007-2014

2007-2014 HD Construction/Vocational segment dropped an average of $381 (0.8%) in November compared to the $296 (0.6%) in October.

2007-2014 HD Over the Road Tractor segment dropped an average of $611 (1.9%) in November compared to $540 (1.6%) average depreciation in October.

2007-2014 HD Regional Tractor segment dropped an average of $431 (1.7%) in November compared to the average drop of $369 (1.5%) in October.

-$1,400

-$1,200

-$1,000

-$800

-$600

-$400

-$200

$0

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Average Wholesale Value Changes (Market)

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors

SPECIALTY MARKETS:

HEAVY DUTY

7

December 4, 2017

Older Models Stabilize as We Head into 2018

“The Wholesale Market continues its downward trend; however, some

Older Models have stabilized.” Josh Giles - Senior Truck Editor

Overall, the Medium Duty wholesale market continues its downward trend as we

prepare to close the books on 2017. We wish you and your business much success in 2018. This past month, Late

Model units (2015-2016) dropped a weighted average of $321 (0.7%), which is more than the depreciation we

experienced in September and October of this year. Over the past couple of years, this segment has increased in

depreciation heading into the end of the year, unlike the Older Models (2007-2014), which normally stabilize

towards the end of the year. The Older Model Year Segment dropped an average of $154 (0.8) in November, which

is less than the previous month when we watched this segment drop an average of $177 (0.9%). This time last year,

the Older Model Year segment dropped an average of $242 (1.2%), which is better than November 2015, when this

segment dropped an average of $299 (1.5%). With orders increasing you might expect this segment to depreciate

faster going forward, however there is enough demand out there to take on this increased supply without causing

the market to increase in depreciation.

DATE

Medium Duty MODEL

YEARS

DATE

Medium Duty MODEL

YEARS Value $ Change % Change Value $ Change % Change

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

11/01/17 19,861 -177 -0.9% 2007-2014 11/01/17 46,285 -301 -0.6% 2015-2016

Wholesale prices may continue to drop; however, fuel prices continue to increase month over month. We

are currently paying an average of $2.91 per gallon for diesel. This is an increase of $0.11 from last month. We

haven’t paid this much for fuel since January of 2015 when national average was $2.99. The highest national

average we have seen was in July of 2008 when prices averaged $4.70 per gallon.

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+$0.00

+$0.03+$0.06

+$0.02+$0.01+$0.01

+$0.49+$0.47

+$0.41

+$0.34+$0.32+$0.31

-$0.10

+$0.00

+$0.10

+$0.20

+$0.30

+$0.40

+$0.50

+$0.6011/20/1711/13/1711/06/1710/30/1710/23/1710/16/17

Diesel Price Changes

Price Chg/Week Price Chg/Year

SPECIALTY MARKETS:

MEDIUM DUTY