Guidelines | March 2014

NADA Used Car Guide Industry Update March 2014 

Used Vehicle Prices Rise in February Prices increase by 2.2%; NADA’s used vehicle price index unchanged at 124.6



Used Prices Expected to Peak in March Prices forecast to grow by 1% and then fall by 2.5% to 3% per month through June



March Official Used Car Guide® Movement Trade-in values raised by an average of 0.7%; car and truck values increase by 1% and 0.2%, respectively



Weather Again Dampens New Vehicle Sales Sales essentially flat at –0.1%; Seasonally Adjusted Annual Rate reaches 15.3M

Guidelines | March 2014

TABLE OF CONTENTS New & Used Market Trends ........................................................................................................ 2 Economic Trends .......................................................................................................................... 10 NADAguides.com Search Trends ................................................................................................. 14 NADA Official Used Car Guide Value Trends ............................................................................... 15 At NADA Used Car Guide ............................................................................................................. 16

NEW & USED MARKET TRENDS Used vehicle prices rise in February Extreme winter weather thwarted price growth in early February as prices grew by 0.7% over the first half of the month. However, favorable weather over the second half of the month allowed prices to grow by an additional 1.5 points to a total of 2.2% by month’s end, in line with NADA’s forecast of 2.1%. NADA’s seasonally adjusted used vehicle price index remained unchanged for the third month in a row at 124.6, tying August 2013, December 2013 and January 2014 as the third highest figure recorded. At the segment level, price movement was positive across all mainstream segments with prices increasing between 1% to 3.2%. Per the seasonal norm, compact and mid-size car price growth outpaced all other segments at 3.2% apiece, which accounted for respective lifts of 2.8 and 3.2 percentage points over January’s final figures. While positive, the gains recorded last month in compact and mid-size cars are slightly lower than each segment’s respective five-year February

NADA’s seasonally adjusted used vehicle price index remained unchanged for the third month in a row at 124.6.

average of 4.3% and 3.9%. Compact and mid-size utility prices grew by 2.2% and 1.7%, respectively, and mid-size van prices increased by 2%. Toward the bottom of the mainstream pack, large pickups and SUVs recorded respective increases of 1.7% and 1%, which are figures similar to each segment’s five-year February average of 1.7% and 1.1%. On the luxury side of the market, utility prices increased for the first February since

NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b © 2014 NADA Used Car Guide

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[ NEW & USED MARKET TRENDS continued ] 2011, but only by a scant 0.3%, while luxury car prices dipped by a slight 0.1%, similar to historical norms.

NADA Used Vehicle Price Index 130

month 1% higher than they were in February 2013.

120

Large pickup and SUV price growth continues to

110

prices were 10.6% and 6.5% higher on a prior-year

January 2010 = 100

On an annual basis, wholesale prices ended the

overshadow the rest of the market as their respective

February 2014: Index unchanged at 124.6

Vehicles up to eight years in age. Seasonally adjusted.

basis. Mid-size cars, utilities and vans rounded out the

100

90

80

list of segments whose prices remained elevated

70

compared to last year, up by a range of 0.4% to 3.2%. Month

As for declines, compact car prices were down by a slight 0.1% relative to last year. Prices for compact utilities and their luxury segment counterparts were

Source: NADA Used Ca r Guide

Monthly AuctionNet Price Change - January vs. February 2014 Vehicles up to eight years in age. 4.2%

on average 0.6% lower than last year. Bringing up the

3.2%

rear was once again the luxury car segment, whose

2.2%

2.4% decline adds another month onto the group’s 14

1.2%

2.2%

Percent Change

month streak of year-over-year losses.

AuctionNet® volume trends

2.0%

1.7%

2.2%

1.7% 1.0% 0.3%

0.2%

-0.1% -0.8%

-1.8%

The number of AuctionNet sales of units up to eight

-2.8%

years in age grew by 3% on a prior-month basis in

-3.8%

February. 2014 model year sales nearly doubled,

3.2%

3.2%

Compact Car

Compact Utility

Large Pickup

Large SUV

Luxury Car Luxury Utility Mid-Size Car

Mid-Size Utility

Mid-Size Van

Market Average

Segment Source: NADA Used Car Guide Source: NADA

increasing from 819 sales in January to nearly 1,600 in February, while large quantities of off-lease units

Annual AuctionNet Price Change - YTD, 2013 vs. 2014 Through February. Vehicles up to eight years in age.

pushed 2012 model volume up by 8.5%. Volume for

12.0%

10.6%

the 2013 model year fell by a slight 0.2%, but 2011

10.0%

8.0%

model volume rose by 1.5%.

the 2010 model year dropped by nearly 10%, while

Percent Change

Reflecting waning off-lease volume, transactions for

6.5% 6.0%

4.0%

2.6%

3.2%

2.0%

1.0%

0.4%

dealer consignment activity pushed volume for model years 2007–2009 up by an average of 3.9%.

0.0%

-0.1%

-0.6%

-0.6%

-2.0%

-2.4% -4.0%

In terms of transaction share, the 2011 and 2013

Compact Car Compact Utility

Large Pickup Large SUV

Luxury Car

Luxury Utility

Mid-Size Car

Mid-Size Utility

Mid-Size Van

Market Average

Segment Source: NADA Used Ca r Guide Source: NADA


3


[ NEW & USED MARKET TRENDS continued ] AuctionNet® Auction Volume Trends The average number of weekly AuctionNet transactions.

Period Prior 4-wk Avg. Current 4-wk Avg. Difference (%)

2007 8,440 8,789 4.1%

2008 7,517 7,814 4.0%

2009 4,397 4,558 3.7%

Model Year 2010 2011 7,896 13,804 7,125 14,015 -9.8% 1.5%

2012 10,634 11,542 8.5%

2013 13,498 13,469 -0.2%

2014 819 1,592 94.3%

Source: NADA Used Car Guide

model years remain the dominant sources of sales with a combined share of 20%, followed closely by 2012’s share

through June.

of nearly 17%. The 2010 model year’s share fell from

By comparison, prices increased by a similar 1.2% in

11.8% in January to 10.3% last month, while share for

March 2013 but fell by a less steep average of 1.7% in the

2007–2009 models remained essentially flat at 30.7%.

second quarter (last year’s more subdued rate of

Year-to-date, the number of 2013

depreciation was due in part to

model year AuctionNet sales is

the fact that prices grew less than

15% lower than those of 2012 model year sales recorded over the same period last year. Again, this can likely be chalked up to an abnormally harsh winter impeding the progress of rental units to auction. Volume for model years 2010–2012 is on

NADA expects used prices to rise by an additional 1% in March before falling by an average of 2.5% to 3% per month from April through June.

usual over the first quarter). At a segment level, prices are expected to increase by 1% to 2% on vans and pickups (both mid-size and large), compact utilities and luxury utilities in March; growth for remaining segments is forecast to be less than 1%. In the second

average 24% higher than what

quarter, luxury car, mid-size utility

was observed for like-age units

and luxury compact utility prices

last year, which is unsurprising

are expected to drop closer to the upper end of our

given the annual rise in new vehicle sales that’s occurred

forecast range, while mid-size and large pickup

since 2009.

depreciation should remain below the overall market

March 2014 used vehicle price forecast

average. Downward movement for other segments is

NADA expects that the uptick in auto demand associated with the receipt of tax refund checks will remain in effect for another month before dissipating as we head into the

expected to slot in between the former and latter groups.

March Official Used Car Guide® value movement

second quarter of the year. Specifically, our forecast has

Trade-in values in March’s edition of the Official Used Car

prices rising by an additional 1% in March and then falling

Guide were raised by an average of 0.7% relative to

by an average of 2.5% to 3% per month from April NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b © 2014 NADA Used Car Guide

4


[ NEW & USED MARKET TRENDS continued ] February’s edition. Car values were raised by an average of 1%, with mid-size car figures rising by a segment leading average of 1.4%, followed by respective compact and large car increases of 1.2% and 1.1%. In terms of declines, luxury car segments were decreased by a combined average of 0.3%. Compared to cars, truck values were raised by a smaller average of 0.2% in March’s edition. In terms of increases, mid-size van and compact utility segments led the pack with respective gains of 1.7% and 1.1%. Luxury truck segment declines were larger than their car counterparts as values were decreased by an average of 0.8%.

New vehicle sales flat at –0.1%, SAAR drops to 15.27M units The industry’s bout with volatile winter weather continued in February, which produced themes similar to that of January, but overall results were generally improved versus the previous month.

Winter weather dampens new vehicle sales, new deliveries fall by a scant 0.1% in February.

New sales declined by a scant 0.1% on 1.19 million deliveries, marking the third year-over-year decrease in the past six months after 27 consecutive months of gains. While the automotive sector’s slow start to the year is noticeable, optimists contend that can be attributed to the incessant inclement weather around the country, which has negatively affected retail businesses and consumption, in general. Following the same pattern as last month, there was a stark contrast in performance between mainstream and luxury brands as the former combined to sell 0.5% fewer units while sales for the latter improved by 4.1%. Although a higher number of mainstream brands

New Vehicle Sales New Vehicles Sales

1.6

result was undoubtedly better than the 4% drop

1.4

enjoyed positive growth as the 10 brands posting gains were up a collective 6.1% while the only two brands to slide, Volvo and Cadillac, were down 6.9%.

YoY Change

20% 15%

1.2 10%

1.0 0.8

5%

0.6

0%

0.4 -5%

0.2

From a segment perspective, cars performed poorly

0.0

-10%

with sales falling by 6% and the major mid-size and Month Source: WardAuto


5

Percent Change

from a month ago. Additionally, more luxury makes

Sales Volume (millions)

exhibited falling sales than in January, the overall


[ NEW & USED MARKET TRENDS continued ] compact car segments down a respective 12% and

New Vehicle SAAR SAAR

17

season had less of an effect on light trucks, which

16

wheel drive utility vehicles. Overall, February’s seasonally-adjusted annual rate (SAAR) fell a slight 0.39% from last year’s 15.3 million units to 15.27 million. Although the decline

YoY Change

14% 12% 10%

15

8%

14

6% 4%

13

2% 12

0%

11

-2%

was small, the SAAR dropped for the second consecutive month after rising for nearly three and a half years.

Month Source: WardAuto

Fiat Chrysler forges ahead while other domestics slide back Collectively, the Big Three’s struggles carried over from January with slow sales resulting from the especially harsh winter that kept many buyers away from dealerships. Although sales for domestics were up only a mere 0.2%, the tally was an improvement over last month’s negative performance for each automaker, which generates some optimism for better sales as the temperature rises in the coming months. Fiat Chrysler posted the fourth-highest sales in February with 155,000 units, but what is notable is that it was the only automaker in the top four to grow year-over-year, with deliveries up over 11%. Despite the company’s sales leader, Dodge, selling 11% fewer vehicles, the rest of the brands improved by a collective 26% and were again led by Jeep and Ram, which were up 47% and 28%, respectively. Jeep enjoyed increased sales for all of its models, highlighted by the Cherokee’s 11,795 sales, which was a 671% improvement over the discontinued Liberty. General Motors was not quite able to turn things around in February, but sales were not far off from last year’s performance and were down only 1%. Just like a month ago, Buick was the best performing brand as its deliveries were up a healthy 19% with every model seeing a lift in sales, led by the Encore and Regal, up 93% and 50%, respectively. The rest of the company’s lineup was down 2.5% altogether and while GMC realized only a 0.6% drop, Chevrolet and Cadillac were both down 2.9%. Ford Motor Company’s struggles lingered as the automaker experienced a 6.4% decline,


6

Percent Change

were up 6%, likely due to high demand for larger, all-

New Vehicle SAAR (millions)

5.4%. On the other hand, the snowy and blustery


[ NEW & USED MARKET TRENDS continued ] with the namesake brand, Ford, reeling with sales down 7.5%. The sales-leading F-Series pickup inched up 2.1%, but was unable to offset falling sales of the Fusion, Focus and Taurus, which were down a collective 19%. Lincoln was able to maintain momentum from January as it grew by 36% thanks primarily to its MKZ, which was up a significant 222%. Mainstream Brand Performance (Units Sold)

Imports improve over last month, but finish behind domestics Import sales were relatively flat as sales were down a small 0.4% due to a 4.3% decrease in deliveries for European vehicles while Asian automakers were up 0.4%. Interestingly, although Japanese and Korean makes combined to sell more cars than a year ago, the increase was solely a result of impressive gains from Nissan and Subaru, which together were up almost 18% while the remaining automakers were down 5.1%. Meanwhile, European sales slid as Volkswagen, BMW and Volvo were down over 10%; however, Daimler, Audi, Jaguar Land Rover and Porsche had a solid month with 4.4% growth. Subaru has been undoubtedly scorching hot for quite a

Buick Chevrolet Chrysler Dodge Fiat Ford GMC Honda Hyundai Jeep Kia Mazda Mini Mitsubishi Nissan Ram Scion Smart Subaru Toyota Volkswagen

year. Its 24% leap was 8.2 percentage points ahead of second place Nissan and the company is nearly 22% above its 2013 pace. Aside from the soon-to-be discontinued Tribeca, the only model with declining sales was the Legacy (down 31%), but this is not all too surprising as the brand is preparing to launch its all-new

Jan-14 13,278 119,089 21,113 34,905 3,222 144,221 27,733 80,808 44,005 41,910 37,011 18,813 2,543 4,867 81,472 25,596 4,011 521 33,000 124,717 23,494

Feb-13 16,150 158,541 25,083 55,639 3,302 186,782 35,778 96,623 52,311 31,164 41,505 24,936 4,302 6,051 90,489 23,421 5,052 783 28,163 143,986 31,456

Change From Month Ago Year Ago 45% 19% 29% -2.9% 19% 0.6% 43% -11% 7.5% 4.9% 20% -7.5% 28% -0.6% 10% -8.0% 11% -6.3% 10% 47% 11% -0.7% 29% -2.4% -3.3% -43% 23% -1.2% 30% 17% 17% 28% 13% -10% 81% 20% 5.8% 24% 9.0% -5.6% 15% -14%

Feb-13 11,364 10,877 21,311 13,845 9,147 1,148 3,905 17,339 4,883 23,268 2,805 4,867

Change From Month Ago Year Ago 6.7% 1.6% 7.7% 0.0% 21% 3.3% 18% -2.9% 8.1% 6.4% 15% 35% -14% 2.6% 6.9% 8.7% 12% 36% 0.6% 3.3% 4.4% 15% 5.2% -18%

Source: Wa rds Auto

Luxury Brand Performance (Units Sold)

while and that continued to be the case in February as the automaker had the biggest improvement over last

Feb-14 19,192 153,913 25,230 49,744 3,465 172,725 35,562 88,860 49,003 45,946 41,218 24,341 2,459 5,977 105,631 29,972 4,529 941 34,909 135,900 27,112

Acura Audi BMW Cadillac Infiniti Jaguar Land Rover Lexus Lincoln Mercedes-Benz Porsche Volvo

Feb-14 11,545 10,881 22,017 13,437 9,729 1,552 4,006 18,855 6,661 24,030 3,232 3,991

Jan-14 10,823 10,101 18,253 11,386 8,998 1,347 4,674 17,637 5,973 23,892 3,096 3,792

Source: Wa rds Auto

replacement in the coming months. The rest of the lineup was up 32% particularly due to 95% growth in Forester sales and even the rear-wheel drive BRZ sports car sold 197 more units than last February in spite of winter weather causing havoc across the country. Nissan North America had a fantastic month as its sales increased by 15,724 units to


7


[ NEW & USED MARKET TRENDS continued ] achieve nearly 16% growth. Infiniti was up 6.4%, but the

55%) was the driver behind the brand’s performance,

Nissan brand really stood out with well over 105,000

which is not shocking as its bigger size and acclaimed all-

deliveries, which was an improvement of close to 17%.

wheel drive technology make it a logical choice for buyers

While the Altima was up a solid 11%, Nissan’s

wary of the snow.

performance had a lot to do with its strong utility vehicle

Incentive spending continues upward in February

sales as the Frontier (up 112%), Juke (up 84%), Xterra (up 83%) and Rogue (up 73%) all had an excellent February.

Total incentives climbed to $2,718 per unit on average

Toyota Motor Sales sold 4.3% fewer vehicles year-over-

and were up 8.6% versus last year, per Autodata. The

year after the Toyota brand skidded to a 5.6% decline

jump in spending was the third-highest in the past 21

despite Lexus growing by 8.7% with its IS sedan up 130%.

months and February was the fifth consecutive month of

Some of Toyota’s utility vehicles did well as the

7.6% growth or more. Spending increased across all

Highlander (up 30%), RAV4 (up 23%) and 4Runner (up

discount types for the first time since February 2008 and

17%) all gained positive traction, but the automaker’s

dealer cash (up 10.9%) grew by double-digit percentage

sales leading Camry was down 7.3% and negated the

points for the fourth consecutive month. Automakers also

brand’s strong performers. Scion was down 10%, but

offered greater lease incentives (up 9.2%) and although

enjoyed better sales of the tC (up 9.6%) and xD (up 11%),

finance and customer cash spending was up, they

which had been sliding in months past. Curiously, though

increased by a relatively small 2.2% and 2.6%,

the two models were developed together and share

respectively.

much of the same DNA, the FR-S sports car was down

General Motors reversed its trend from the past couple

24% even as its Subaru BRZ twin exhibited growing sales.

months and spent a little more in February as incentives

American Honda Motor Co. had an even worse sales

were up across all its brands. Buick (up 5%), Chevrolet (up

month than in January as the company’s sales fell by 7%

2%) and GMC (up 1%) did not deviate too far from last

on an 8% sales decline for Honda-branded vehicles. The two Honda models that consistently account for

Incentives

roughly half of the brand’s total sales are the Accord

$2,800

the month. Considering how significant these two vehicles are to the company’s sales success, it’s no wonder the automaker was even more negatively affected by the chaotic winter season than many of its competitors. Acura managed to increase sales by

14% 12%

$2,700 10%

$2,650 $2,600

8%

$2,550 6%

$2,500 $2,450

4%

$2,400 2%

$2,350 $2,300

1.6%, but a closer look reveals that its MDX SUV (up

0%

Month Source: Autodata


8

Percent Change

respectively, and represented 52% of all deliveries for

YoY Change

$2,750

Average Incentive Spending

and Civic, which were down 12% and 5%,

Average of Total


[ NEW & USED MARKET TRENDS continued ] year’s averages, but Cadillac stood out by spending 22% more. The Ford brand’s spending went up by 10%, but its incentives were actually its lowest on average since September 2013 and while Lincoln was up less with a 6% climb, it was higher than it’s been at any point in the past year. Fiat Chrysler’s most noteworthy accomplishment was its sales growth of its Jeep products despite cutting back incentives by 14%. Toyota Motor Sales was even more aggressive with its Toyota brand than in January as spending increased by 13% versus last year, but it was not enough to drastically change its fortunes. Lexus had another positive sales month yet incentives growth of 24% again outweighed the brand’s incremental sales gains. The Honda brand opened up its coffers and spent 54% more year-over-year only for the weather to not cooperate, but Acura moved in the right direction while cutting back on spending by 25%. Nissan North America had an excellent month as Infiniti sales grew in spite of a 14% pullback in incentives, and although the Nissan brand’s spending went up by 16%, the move clearly paid off with healthy sales growth. The most frugal automaker continues to be Subaru as the company grew the most in February even though it spent only $864 on average, which was a 21% drop from 2013 and represented the second biggest decrease of all mainstream brands after Mazda (down 22%). Porsche spent the least in the industry at $584 per unit and its 55% pullback from last year was the largest drop-off of all brands. Mini spent 102% more than a year ago, which was the greatest jump in the industry, but was unable to take advantage as it realized 43% fewer sales while Volkswagen did not fare much better as its sales decreased by 14% even with a 49% growth in incentives.

Overall new vehicle days’ supply rises by 10 days compared to last year

New Vehicle Days' Supply Days' Supply

settle at 74 days. Jaguar Land Rover had the secondhighest drop in days’ supply as its inventory

Days of Supply

decreased greatly, down 27 days from last year to

13

70 60

8

50 40

3

30 20

-2

10 0

-7

decreased by 17 days from a year ago, tying it with Subaru for the lowest level at 32 days.

Month Source: WardAuto


9

Day Change

again, Acura was notable in that its days’ supply

18

80

and although it was 10 days higher than in 2013, it was actually 14 days less than a month ago. Once

YoY Change

90

Inventory in February reached 75 days for supply


[ ECONOMIC TRENDS ] The U.S. government slashed its estimate for 2013 fourth-quarter growth as consumer spending and exports were less robust than initially thought, leaving the economy on a more sustainable path of modest expansion. GDP expanded at a 2.4% annual rate, down sharply from the 3.2% pace reported in January and the 4.1% logged in the third quarter. Americans boosted spending in January despite the

Real Gross Domestic Product Percent change from preceding period (%, SAAR)

in December than initially reported. The Commerce Department reported that spending rose 0.4% in January following an insignificant 0.1% gain in December, which had initially been reported as a stronger 0.4% increase. Income grew 0.3% in January following no increase at all in December.

Percent Change from Preceding Period

harsh winter weather, but activity was much weaker

Consumer spending is closely watched because it

6.0 5.0 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 -3.0 -4.0 -5.0 -6.0 -7.0 -8.0 -9.0

drives 70% of economic activity.

Quarter

Source: U.S. Bureau of Economic Analysis

Job creation ramped up somewhat in February, posting a better-than-expected gain of 175,000,

Unemployment and Labor Participation Rates Seasonally Adjusted

despite expectations that weather would keep the

trend of where it had been for the past year, during which monthly job creation has averaged 189,000. The poor employment situation has posed a

8.0

65.0

7.0 6.0

64.0

5.0

63.0

4.0 3.0

62.0

2.0 1.0

61.0 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14

improvement, February's number remains below

66.0

9.0 Unemployment Rate (%)

over the past two months, and while an

67.0

Month Source: U.S. Bureau of Labor Statistics

quandary for the Federal Reserve, which is unwinding its monthly asset purchase program known as quantitative easing but holding to its zero interest rate policy for short-term rates. Though the U.S. central bank has set a 6.5% target for the jobless number before it will consider raising rates, it likely will have to reconsider and could do so as soon as its March meeting. The declining rate has been a mix of middling job creation and labor force participation


10

Labor Participation Rate (%)

of Labor Statistics. Employment growth had waned

Unemployment Rate

10.0

count low. The unemployment rate edged higher to 6.7%, according to the latest report from the Bureau

Participation Rate

11.0


[ ECONOMIC TRENDS continued ] that has languished around 35-year lows. At the same time, long-term unemployment remains a major structural impediment, making the Fed's final decision on interest rates likely more reliant on an arbitrary qualitative impression of economic health. The number of people without jobs for 27 weeks or longer grew 203,000 to 3.8 million—a group that now represents fully 37% of the unemployed.

Total Housing Starts, Privately Owned Seasonally Adjusted 1300.0

professional and business services, which added

1100.0

79,000 positions. Temporary help grew by 24,000 while wholesale trade gained 15,000 jobs and bars and restaurants contributed 21,000 and construction also added 15,000. Retail lost 4,000

Housing Starts (thousands)

Biggest job gains in February came from

900.0 700.0 500.0 300.0

jobs for the month while government

Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14

100.0

employment was little changed. However, electronics and appliances lost 12,000, the first sign

Month Source: U.S. Census Bureau

of the impact of mass retail store closures across the country.

S&P/Case-Shiller 20-City Composite Home Price Index Three-month moving average published with a two-month lag.

Existing-home sales, which are completed

190.0 180.0

transactions, fell in January to the lowest level in 18

170.0

months, but ongoing inventory shortages continue

Total existing-home sales dropped 5.1% to a seasonally adjusted annual rate of 4.62 million in January from 4.87 million in December; sales are also 5.1% below the 4.87 million-unit pace in

150.0 140.0

130.0 120.0 110.0 100.0 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13

to the National Association of Realtors.

Index Level

to lift prices in much of the United States, according

160.0

Month Source: S&P Dow Jones

January 2013. Last month’s level of activity was the slowest since July 2012, when it stood at 4.59 million. The median existing-home price for all housing types in January was $188,900, up 10.7% from January 2013. Distressed homes – foreclosures and short sales – accounted for 15% of January sales, compared with 14% in December and 24% in January 2013. Total housing inventory at the end of January rose 2.2% to 1.90 million existing homes


11


[ ECONOMIC TRENDS continued ] available for sale, which represents a 4.9-month supply at the current sales pace, up from 4.6 months in December. Unsold inventory is 7.3% above a year ago, when there was a 4.4-month supply. A supply of 6 to 6.5 months represents a rough balance between buyers and sellers. According to Freddie Mac, the national average rate mortgage slipped to 4.43% in January from 4.46% in December; the rate was 3.41 % in January

U.S. crude oil refinery inputs averaged over 15.2 million barrels per day during the week ending Feb. 28, 2014, 87 thousand barrels per day less than the previous week’s average. Refineries operated at

Average Price Per Gallon

$ YoY Change

$4.00

$0.40

$3.90

$0.30

$3.80

$0.20

$3.70

$0.10

$3.60

$0.00

$3.50

($0.10)

$3.40

($0.20)

$3.30

($0.30)

$3.20

($0.40)

$3.10

($0.50)

Price Change

2013.

Regular Grade Gasoline Prices (all formulations)

Average Price

commitment rate for a 30-year, conventional, fixed-

87.4% of their capacity last week. Gasoline million barrels per day. Distillate fuel production decreased last week, averaging 4.6 million barrels per day. Gross exports of petroleum products from the (bbl/d) in December 2013, the first time exports exceeded 4 million bbl/d in a single month. December exports cap a year of steady growth and bring average exports for full-year 2013 to 3.5

Month

On-Highway Diesel Fuel Prices Average Price Per Gallon

$ YoY Change

$4.15

$0.20

$4.10

$0.15

$4.05

$0.10

$4.00

$0.05

$3.95

$0.00

$3.90

($0.05)

$3.85

($0.10)

$3.80

($0.15)

$3.75

($0.20)

$3.70

($0.25)

million bbl/d, 350,000 bbl/d (11%) higher than in 2012. The increase in exports was broad-based, affecting multiple products.

Source: U.S. Energy Information Admi nistration

Month

The U.S. average retail price of regular gasoline increased 4 cents to $3.48 per gallon as of March 3, 2014, 28 cents lower than last year at this time. The national average diesel fuel price was down less than a penny to remain at $4.02 per gallon, 11 cents lower than last year at this time.


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Price Change

United States reached 4.3 million barrels per day

Source: U.S. Energy Information Admi nistration

Average Price

production increased last week, averaging over 9


[ ECONOMIC TRENDS continued ] Considering the slower pace in the start of the year, a modest slowdown in the first quarter of 2014 is likely in any case, with growth accelerating as the year unwinds. What’s more, there’s a decent chance of an upside surprise. Consumer spending and confidence is still way below what would be considered normal levels by the standards of past economic expansions. As job growth returns and consumers feel more secure, a virtuous cycle of spending begetting more consumer income begetting more spending could be initiated. If this occurs, quarterly growth is likely to exceed an annualized pace of 3%. If that doesn’t pan out in 2014, it is very likely to happen before the end of 2015.


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[ NADAGUIDES.COM SEARCH TRENDS ] NADAguides.com is the most comprehensive vehicle information website on the internet today, offering a broad range of information and services to help educate consumers in the market to buy, sell, trade, or simply shop for a vehicle. NADAguides is an alliance partner of NADA Services Corporation. The figures contained below are based on consumer activity on nadaguides.com and are calculated by measuring the number of unique lookups for a given period of time. Annual Change in Consumer Activity: Used Make

Annual Change in Consumer Activity: New Make Jaguar

77%

GMC Mitsubishi

0%

Mazda

-1%

Acura

-9%

Subaru

-11%

Smart

-12%

Porsche

-17%

Jeep

-20%

Kia

-21%

Volvo

-24%

Mercedes-Benz

-26%

Infiniti

-28%

Nissan

-29%

Audi

-30%

Buick

-31%

Cadillac

-36%

Honda

-36%

Chevrolet

-39%

Toyota

-42%

Land Rover

-43%

Lincoln

-48%

Chrysler

-48%

Hyundai

-51%

Lexus

-52%

Dodge

-52%

BMW

-53%

Volkswagen

-53%

MINI Ford

Kia Hyundai Porsche Audi Subaru Jaguar Mazda Mercedes-Benz Nissan GMC Suzuki Infiniti Mitsubishi BMW Scion Acura Volvo Chrysler Jeep MINI Cadillac Ford Buick Chevrolet Honda Lincoln Toyota Saab Volkswagen Dodge Lexus Mercury Hummer Saturn Pontiac Land Rover -4%

9%

-58% -60%

Scion -67%

-80%

-60%

-40%

Source: NADAguides.com

-20%

0%

20%

40%

60%

80%

Percent Change

1 2 3 4 5 6 7 8 9 10

MY 2014 2014 2014 2014 2014 2014 2015 2014 2014 2014

MAKE Chevrolet Ram Truck Honda Jeep Ford Ford GMC Honda Jeep Toyota

54% 47% 45%

37% 36% 34% 34% 28% 26% 26% 25% 25% 23% 23% 21% 20% 19% 19% 19% 19% 18% 18% 18% 17% 16% 15% 15% 15% 12% 7% 6% 6% 2% 0%

10%

20%

30%

40%

50%

60%

70%

80%

Percent Change

Source: NADAguides.com

Top 10 Researched New Models Rank

-10%

100%

73%

59%

Top 10 Researched Used Models MODEL Silverado 1500 1500 Accord Sedan Grand Cherokee F-150 Mustang Yukon CR-V Wrangler Unlimited Tacoma

Rank 1 2 3 4 5 6 7 8 9 10

MAKE Ford Chevrolet Dodge Honda Toyota BMW Nissan Chevrolet Ford Chevrolet

MODEL F-150 Silverado 1500 Ram 1500 Accord Sdn Camry 3 Series Altima Silverado 2500HD Mustang Impala


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[ NADA OFFICIAL USED CAR GUIDE® TRENDS ] Monthly Change in NADA Used Car Guide Value February 2014 v. March 2014

NADA Segment

2009MY

2010MY

2011MY

2012MY

2013MY*

Compact Car Compact Utility Large Pickup Large SUV Luxury Car Luxury Utility Mid-Size Car Mid-Size Utility Mid-Size Van

0.9% 0.4% 0.2% -1.2% -0.3% -1.2% 1.8% -1.3% 0.6%

0.9% 1.0% 0.1% -0.3% -0.4% -0.7% 1.9% -0.7% 2.0%

0.7% 0.9% 0.1% -1.0% -0.7% -1.2% 0.9% -0.7% 1.9%

0.8% 0.9% 0.4% -0.7% -0.4% -0.2% 0.9% -0.3% 1.6%

0.4% 0.5% 0.2% -1.4% 0.1% 0.0% 0.6% -0.5% 1.1%

*Value movement can be influenced by newly valued vehicles.

Annual Change in NADA Used Car Guide Value March, 2013 v. 2014

NADA Segment Compact Car Compact Utility Large Pickup Large SUV Luxury Car Luxury Utility Mid-Size Car Mid-Size Utility Mid-Size Van

5YR 2.1% 1.9% -0.8% 1.5% -1.1% 2.3% 0.3% -0.1% 1.8%

4YR 2.2% 1.9% 0.3% 3.9% -0.3% 2.5% -1.0% -0.3% 2.2%

3YR 1.7% 2.0% -0.3% 2.6% -0.8% 2.4% 0.4% 0.1% 2.5%

2YR 1.8% 1.6% 0.1% 3.3% 0.2% 1.9% 0.6% 0.3% 2.2%

1YR 1.0% 1.2% 0.5% 2.4% 0.4% 1.6% 1.4% 0.4% 2.2%

YoY Segment Change 1.8% 1.7% -0.1% 2.7% -0.3% 2.1% 0.3% 0.1% 2.2%

*Calculations are based on vehicle age, i.e. values for 1 year old vehicles in CY2014 are compared against values for 1 year old vehicles in CY2013.

YTD Change in NADA Used Car Guide Value January — March 2014

NADA Segment Compact Car Compact Utility Large Pickup Large SUV Luxury Car Luxury Utility Mid-Size Car Mid-Size Utility Mid-Size Van

2009MY 2.3% 0.6% 2.5% 10.2% 9.4% -2.3% -3.4% 5.2% 5.7%

2010MY 5.4% 2.7% 2.3% 15.9% 2.9% 1.5% 2.8% 4.0% 0.6%

2011MY -2.1% 2.1% 3.8% 10.9% -4.5% 1.4% -6.0% 1.0% 15.4%

2012MY -0.2% -0.3% 3.1% 9.0% 1.5% 1.9% 13.8% 1.0% 2.5%

2013MY* YTD Segment Change 1.9% 1.5% 1.7% 1.4% 2.6% 2.9% 6.1% 10.4% 2.5% 2.4% 3.6% 1.2% -1.9% 1.1% 5.0% 3.2% 4.9% 5.8%


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AT NADA USED CAR GUIDE What’s New Available on iPhone, iPad and Android devices, the recently enhanced NADA MarketValues is the fastest, easiest and most cost-efficient way to make smart vehicle decisions on the go. This native app allows you to get your NADA values anywhere, anytime without an Internet connection. Subscriptions start at $50 per month and when you download NADA MarketValues from Google Play or the Apple Store for $1.99, you’ll receive a FREE 30-day trial!

On the Road NADA Used Car Guide is exhibiting at the Consumer Bankers Association’s CBA Live 2014 in Washington, DC on March 31 – April 2, 2014. Stop by booth #40 to see Dan Ruddy, Steve Stafford and Jonathan Banks. NADA President Peter Welch is speaking at CBA Live’s Auto Finance Forum at 8:00 a.m. on Wednesday, April 2. Andy Koblenz, general counsel and executive vice president of legal and regulatory affairs, will also be in attendance. Jonathan Banks and Steve Stafford are attending the Auto Finance Risk Summit 2014 from May 5 – 6 in Newport Beach, California. On Tuesday, May 6 at 11:15 a.m., Banks is participating on panel titled “Collateral Values: How Much Will Valuations Drop?” The panel will focus on the state of collateral values today, a possible timeline for a steeper decline and metrics for better portfolio management.

About NADA Used Car Guide Since 1933, NADA Used Car Guide has earned its reputation as the leading provider of vehicle valuation products, services and information to businesses throughout the United States and worldwide. NADA’s editorial team collects and analyzes over one million combined automotive and truck wholesale and retail transactions per month. Its guidebooks, auction data, analysis, and data solutions offer automotive/truck, finance, insurance and government professionals the timely information and reliable solutions they need to make better business decisions. Visit nada.com/b2b to learn more.

Financial Industry, Accounting, Legal, OEM Captive Steve Stafford 800.248.6232 x7275 [email protected]

Credit Unions, Fleet, Lease, Rental Industry, Government Doug Ott 800.248.6232 x4710 [email protected]

Automotive Dealers, Auctions, Insurance Jim Dodd 800.248.6232 x7115 [email protected]

Director, Sales and Customer Service Dan Ruddy 800.248.6232 x4707 [email protected]

Automotive OEMs Stu Zalud 800.248.6232 x4636 [email protected]

PR Manager Allyson Toolan 800.248.6232 x7165 [email protected]

Business Development Manager Jim Gibson 800.248.6232 x7136 [email protected]


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NADA CONSULTING SERVICES NADA’s market intelligence team leverages a database of nearly 200 million automotive transactions and more than 100 economic and automotive market-related series to describe the factors driving current trends to help industry stakeholders make more informed decisions. Analyzing data at both wholesale and retail levels, the team continuously provides content that is both useful and usable to the automotive industry, financial institutions, businesses and consumers. Complemented by NADA’s analytics team, which maintains and advances NADA’s internal forecasting models and develops customized forecasting solutions for automotive clients, the market intelligence team is responsible for publishing white papers, special reports and the Used Car & Truck Blog. Throughout every piece of content, the team strives to go beyond what is happening in the automotive industry to confidently answer why it is happening and how it will impact the market in the future. Senior Director, Vehicle Analysis & Analytics Jonathan Banks 800.248.6232 x4709 [email protected]

Senior Manager, Market Intelligence Larry Dixon 800.248.6232 x4713 [email protected]

Automotive Analyst David Paris 800.248.6232 x7044 [email protected]

Automotive Analyst Joseph Choi 800.248.6232 x4706 [email protected]

ADDITIONAL RESOURCES Guidelines

White Papers

Updated monthly with a robust data set from various industry sources and NADA’s own proprietary analytical tool, Guidelines provides the insight needed to make decisions in today’s market.

NADA’s white papers and special reports aim to inform industry stakeholders on current and expected used vehicle price movement to better maximize today’s opportunities and manage tomorrow’s risk.

NADA Perspective

Used Car & Truck Blog

Leveraging data from various industry sources and NADA’s analysts, NADA Perspective takes a deep dive into a range of industry trends to determine why they are happening and what to expect in the future.

Written and managed by the Market Intelligence team, the Used Car & Truck Blog analyzes market data, lends insight into industry trends and highlights relevant events.

Connect with NADA Read our Blog

Follow Us on Twitter

Find Us on Facebook

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nada.com/usedcar

@NADAUsedCarGde

Facebook.com/NADAUsedCarGuide

Youtube.com/NADAUsedCarGuide

Disclaimer: NADA Used Car Guide makes no representations about future performance or results based on the data and the contents available in this report (“Guidelines”). Guidelines is provided for informational purposes only and is provided AS IS without warranty or guarantee of any kind. By accessing Guidelines via email or the NADA website, you agree not to reprint, reproduce, or distribute Guidelines without the express written permission of NADA Used Car Guide.


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