November 5, 2018

“Used car depreciation rates are now showing normal patterns for this time of the year after strong retention in summer.”

Anil Goyal, Executive Vice President, Operations

Model Years: 2010-2016, Volume Weighted Wholesale Average Values, Weekly Change from 10/26/18 to 11/2/18

Compact Van Values Sliding

• Volume-weighted, overall car segment values decreased by 0.60% last week. In comparison, the

market values had decreased by 0.47% on average during the prior 4-week period.

• In cars, the Full-Size Car segment experienced the biggest drop.

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

0.48% last week. In comparison, the market values had decreased by 0.35% on average during the

prior 4-week period.

• In trucks, the Compact Van segment performed the worst.

-$14-0.23%

-$50-0.63% -$65

-0.74% -$90-0.81%

-$85-0.55%

-$84-0.45%

-$162-0.47%

-$90-0.60%

-$183-0.48%

-$65CARS

-0.60%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0%

WEE

KLY

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GE

-$47-0.38%

-$77-0.63%

-$101-0.66%

-$70-0.31%

-$12-0.07%

-$108-0.57%

-$21-0.10%

-$141-0.45% -$76

-0.60%

-$92-1.03%

-$87-0.59%

-$15-0.09%

-$87-0.45%

-$79TRUCKS-0.48%

-1.2%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0%

WEE

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2

November 5, 2018

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

“Attendance and inventory was moderate to low today. No-sales were abundant throughout the day, even though the floor prices seemed to have been more relaxed and generally lower.” Andrew in Ga

“The fall market is here. Vehicles are in short supply and the demand has slowed.” Auction Owner in MO

“The older vehicles in above average condition are selling well. There appears to be very little interest in the sporty type vehicles.” Richard in TX

“Trucks are drawing the most interest. There was active bidding and selling on most of the lanes, which indicates lower floor prices.” Richard in WI

“A more typical fall market as prices have dropped and retail is slower. The demand is for vehicles with good miles and a clean history report.” Gerry in FL

12-Month Depreciation by Segment Nov 1, 2017 to Nov 1, 2018

Source: Black Book Visual Analytics

Luxury segments show the highest depreciation rates with depreciation in the last 12 months over 16% in each

segment. On the other hand, small pickups, commercial vans and compact cars have the lowest depreciation.

Vehicle Highlight

The All-New 2019 Volvo S60 features redesigned exterior styling and enhancements to semi-autonomous driving system. The first American-built Volvo is offered in three trim levels; R-Design, Inscription and Momentum. MSRP with destination ranges from $36,795 (T5 FWD Momentum) to $48,395 (T6 AWD Inscription). Key competitors include the BMW 3-series, Jaguar XE, Audi A4, and Infiniti Q50.

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

3

November 5, 2018

Collectible Car Auctions Continue to Thrive “This is normally the time of year when we look back on the year’s auctions and

start talking about what we think will happen out in Arizona in January. However,

it seems that there isn’t an “off season” anymore, and there are several more

auctions coming up before then: Mecum in Las Vegas and Kansas City, RM at the Petersen Automotive

Museum, McCormick’s in Palm Springs, and Leake in Dallas, just to name a few.”

Eric Lawrence, Director of Specialty Markets

• RM Sotheby’s Hershey auction did very well, bringing in $11,000,000 and an impressive 94% sell through ratio. Their Porsche 70th Anniversary Auction in Atlanta generated $25,800,000 in sales with a 92% sales rate.

• Bonham’s Zoute Grand Prix sale, which focuses on important European sports cars, had sales in excess of $9,000,000, while the Simone Foundation auction raised over $2,500,000 to help support their endeavors.

• Mecum had an impressive showing in Dallas, breaking through $30,000,000 in sales with a 73% sell through rate. Their Chicago sale brought in $17,500,000 with 75% of vehicles selling.

Notable Recent Auction Sales Include:

1948 Chrysler Town & Country Sedan $93,500 (RM Sotheby’s)

1930 Cadillac V-16 Roadster $495,000 (RM Sotheby’s)

1936 Packard Twelve Coupe Roadster $269,500 (RM Sotheby’s)

1985 Porsche 959 Paris-Dakar $5,945,000 (RM Sotheby’s)

2015 Porsche 918 Spyder $1,400,000 (RM Sotheby’s)

1973 Porsche 911 Carrera Lightweight $1,000,000 (RM Sotheby’s)

1970 Plymouth Hemi Superbird $280,500 (Mecum)

2017 Ford GT Coupe $1,320,000 (Mecum)

1962 Aston Martin DB4 Vantage Coupe $1,290,000 (Bonhams)

1954 Arnolt-Bristol Roadster $450,000 (Mecum)

Town & Country. Courtesy of RM Sotheby’s.

4.46% 4.45% 1.04%

-0.31% -3.44%

1.41%

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

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

Percent Change from November 2017 to November 2018

SPECIALTY MARKETS:

COLLECTIBLE CARS

4

November 5, 2018

Motorhome Values Surge On Late Model Consignments

“The average selling price of motorized units at auction last month increased

nearly nine percent, which comes in at the third highest amount ever. One thing

that caught my eye was that there was a larger than usual amount of 2018 models in the mix, perhaps

being disposed of to make room for some incoming 2019s. Auction volumes were up substantially across

the board, not uncommon for this time of year as dealers adjust their inventory levels for winter.” Eric Lawrence, Director of Specialty Markets

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

• Average selling price was $48,269 up $3,785 (8.5%) from the previous month

• One year ago, the average selling price was $48,537

• Auction volume was up 25% from the previous month. The average model year was 2011.

For Towables (including Travel Trailers and Fifth Wheels)

• Average selling price was $13,939, up $381 (2.8%) from the previous month

• One year ago, the average selling price was $14,581

• Auction volume was up 18% from the previous month. The average model year was 2010.

30000

35000

40000

45000

50000

55000

Jan

-14

Feb

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-15

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-16

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Motor Home Value Trends

9000

10000

11000

12000

13000

14000

15000

16000

Jan

-14

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Travel Trailer and Fifth Wheel Value Trends

SPECIALTY MARKETS:

RECREATIONAL VEHICLES

5

November 5, 2018

Powersports Market Enters Typical Fall Pattern “November brings with it a couple of surprises. At a time when all Powersports segments except Snowmobiles should be depreciating, both the Scooters and ATVs have gained a little bit in value.”

Scott Yarbrough, Motorcycle & Powersports Editor

• Scooters almost never appreciate after Labor Day, but we have seen them continue to be relatively strong performers throughout fall. We are not sure why, but the delayed onset of cooler weather in many areas of the country may have extended their season a bit.

• ATVs being up right now is less of a surprise, as these units are used heavily in the fall for hunting, agriculture, and outdoor recreational activities. The ATVs used to appreciate noticeably in the fall, but have taken a back seat in value retention to their larger cousins the Utility Vehicles in that department over recent years.

• Larger touring bikes in the Cruiser segment are down a bit more than the smaller bikes. This continues a trend we have been seeing for a little while now, where the higher end more expensive units are slightly outperformed by their entry level and mid-line brethren.

• Of note this month is that we are starting to see a bit of extra depreciation in the V-Rods for the first time since Harley-Davidson stopped production. They have been mostly tracking with the rest of the line-up value wise, but have dropped by an extra half percent or so recently.

0.6%

-2.5% -2.4%-2.7%

-1.5%

-0.7%

-1.4%

0.5%

1.0%

-1.0%

-1.5% -1.6%

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%Motorcycle & Powersports Percent Change October to November 2018

SPECIALTY MARKETS:

POWERSPORTS

6

November 5, 2018

Used Heavy Duty Values Continue at Record Breaking Strength!

“Both buyers and sellers are watching the market closely, as neither side

wants to miss out on getting either the truck they desire or the highest

price for the units they have to remarket.”

Charles Cathey – Heavy-Duty Truck Editor

• Used trucks are not depreciating too much right now, and the savings continue to be significant over the

cost of ordering new trucks, even factoring in the possibility of expensive repairs.

• The money being saved buying used trucks does help offset more frequent driver salary increases which has

become necessary to maintain drivers and a significant factor in the profit equation.

DATE

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

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

11/01/18 96,661 -201 -0.2% 78,026 -258 -0.3% 69,754 -192 -0.3% 2016-2017

10/01/18 96,862 -370 -0.4% 78,285 -545 -0.7% 69,946 -465 -0.7% 2016-2017

• 2016-2017 HD Construction/Vocational segment dropped an average of $ 201 (0.2%) in October, compared

to the average decline of $370 (0.4%) in September.

• 2016-2017 HD Over the Road Tractor segment dropped an average of $258 (0.3%) in October, compared to

the average drop of $545 (0.7%) in September.

• 2016-2017 HD Regional Tractor segment dropped an average of $192 (0.3%) in October, compared to the

average depreciation of $465 (0.7%) in September.

DATE

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

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

11/01/18 49,527 -223 -0.4% 33,990 -196 -0.6% 26,949 -153 -0.6% 2008-2015

10/01/18 49,750 -276 -0.6% 34,186 -337 -1.0% 27,102 -273 -1.0% 2008-2015

• 2008-2015 HD Construction/Vocational segment dropped an average of $223 (0.4%) in October, compared

to the $276 (0.6%) in September.

• 2008-2015 HD Over the Road Tractor segment dropped an average of $196 (0.6%) in October, compared to

$337 (1.0%) average depreciation in September.

• 2008-2015 HD Regional Tractor segment dropped an average of $153 (0.6%) in October, compared to the

average drop of $273 (1.0%) in September.

-$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

November 5, 2018

Stabilization Trend Continues for Medium Duty Trucks

“Used Truck prices remain stable through October as demand for units in this

segment continue to increase due to increases as freight and construction

industries continue to thrive.” Josh Giles - Senior Truck Editor

DATE

Medium Duty MODEL

YEARS

DATE

Medium Duty MODEL

YEARS Value $ Change % Change Value $ Change % Change

11/01/18 21,631 -46 -0.2% 2008-2015 11/01/18 49,700 -196 -0.4% 2016-2017

10/01/18 21,676 -113 -0.5% 2008-2015 10/01/18 49,896 -356 -0.7% 2016-2017

• Older Models (2008 – 2015) dropped an overall weighted average of $46 (0.2%) in October. This is an improvement over

the $113 (0.5%) drop witnessed in September.

• Late Models (2016 – 2017) dropped an overall weighted average of $196 (-0.4%) in October. This is also an improvement

over the $356 (0.7%) drop seen this past month.

• Units in Classes 4 through 7 continue to stabilize due to limited supply of good used trucks mixed with an increase in demand across the country.

• Recent storms that have devastated parts of the East Coast have aided in the increased demand for units in these segments as cleanup and construction efforts continue.

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www.blackbook.com| info@blackbook.com Opt-in to receive reports from Black Book at http://www.blackbook.com/insights/market-insights

-$700

-$600

-$500

-$400

-$300

-$200

-$100

$0

+$100

+$200

Sep '17 Dec '17 Mar '18 Jun '18 Sep '18

CHANGES IN WHOLESALE VALUEMODEL YEARS 2014 TO 2016

CLASS 4 CAB/CHASSIS CLASS 5 CAB/CHASSIS CLASS 6 CAB/CHASSIS

CLASS 7 CAB/CHASSIS LIGHT-DUTY PICKUP TRUCKS

-$0.01

+$0.01+$0.07+$0.04+$0.00+$0.01

+$0.58+$0.61+$0.61+$0.52+$0.48+$0.48

-$0.20

+$0.00

+$0.20

+$0.40

+$0.60

+$0.80

10/22/1810/15/1810/08/1810/01/1809/24/1809/17/18

Diesel Price Changes

Price Chg/Week Price Chg/Year

SPECIALTY MARKETS:

MEDIUM DUTY