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1 July 15, 2014

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Auction Industry Leaders, Class III, Spokane, WA

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3 Your Homework The wholesale market was strong and active and climbing in April when we last met. Has it turned, when did it turn and by how much? Relate this to values, consignment and conversion. Do you think the wholesale market is better or worse today than one year ago in 2013: values and volumes of offerings? Gas prices are getting the headlines. What do you feel they will peak at? What effects/reactions do you expect?

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The Broad View A solid spring: Strong tax season activity Later beginning of strength: Winter delayed Lasted longer on the calendar: Solid through 2 nd week of May Is the market better or worse?

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Most recent market changes

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Previous month market changes

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Previous year ago period market changes

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Better than previous 3 month period

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Year ago 3 month period

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Better than annual forecast

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Year ago 12 month market changes

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Is the Market Better or Worse? This Month, Quarter or Year over Year? In each comparable period The answer is lower depreciation today: Except May to June 2014

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NAAA physical auction volume: 2013 marked the second consecutive year of increase in unit volume since 2007. The number of units entered increased 4.3 percent to 15.2 million. The number sold grew 4.2 percent to 8.2 million for a conversion rate of 54.2 percent. Dealer-consigned vehicles represented the largest number of units sold at 58.8 percent. Financial/fleet accounted for 34.3 percent. Supply Levels Growing

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NAAA physical auction volume: Increased consignment and sales volume 2013 over 2012 Expect the same increase in 2014 Total new sales levels 15.6M in 2013 16.1M in 2014 projected 16.5M in 2015 projected Off lease increasing Part of trade-ins: just know when and sometimes where Supply Levels Growing

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High penetration of lease in New England Creates a tough remarketing area Online and Upstream to distribute the volume Transportation services Extra Reconditioning: Front Line Ready EOT Oversupply?

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2011: -7.7% 2012: -12.4% 2013: -12.8% 2014: -13.5% projected 2015: 15.5% Annual Depreciation Trends

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3 segments increased during June MPT, MVC & FPT show strength Greater than traditional depreciation: All Cars, mostly small 14 increased in last month of 1 st Qtr

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Solid Annual Market Changes Only the Prestige Luxury Cars over pre-recession annual depreciation 7 under 10% depreciation: All truck related

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End of 1 st Qtr Results If history repeats, second qtr could be better. Must overcome strong March. 1 st Qtr Results

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End of 2 nd Qtr Results History did repeat, second qtr was better as spring market extended into May. -5.2% -3.3% 2 nd Qtr Results

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Truck Market Continues Better Depreciation 2 nd Qtr market changes

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1 st Qtr market changes Cars and Trucks almost identical change for quarter

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Mazda activity Spring market seasonality is prevalent in the compact cars

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Mazda activity Mazda5 also affected by the spring market strength

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Mazda activity As the volumes have increased the seasonality spikes have leveled out somewhat

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Mazda activity CX-7 closing gap to segment in 2014

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Mazda activity Smoother movement in this segment in 2013 & 2014

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Land Rover activity Model fairing better than segment in 2014

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BMW activity Increased supply of 2010 EOT in current wholesale market? Mix in segment varied

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Toyota Activity Spring market seasonality is prevalent in the compact cars Every March there is a climb

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Toyota Activity Combination of Hybrid, Electric and Plug-in reached 3.7%: Wards

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Toyota Activity 2014 brings better retention in relation to segment average

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Seasonality variations

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Gas prices Heading up!

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Gas prices $.21 over year ago Less volatility in 2014, but lower overall points Will the current price trend continue?

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Gas prices Notice the level pricing of diesel throughout the year: Does this encourage more diesel products, car and truck?

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What do you expect? Are there certain concerns? Any additional questions or comments? Heading to the 3rd quarter Is your mobile app setup?

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41 Set Up Academy Members w/Mobile App? Complementary mobile app for each of you throughout the Auction Academy program. Auto and specialty markets: iPhone or Android

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42 Set Up Academy Members w/Mobile App? Values

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43 Just call or email Ricky Beggs VP, Managing Editor 770.533.5221 w, 404.915.4215 c Rbeggs@BlackBookUSA.com Tim West, VP, North American Auction Director 770.533.5230 w, 404.915.2428 c Twest@BlackBookUSA.com Questions?