™ 41 st Annual AFLA Conference Volatility & Opportunities While Managing the Matrix of Change September 10,

What a Year Since We Last Met The Perfect Storm Economy-got much worse, starting to turn? Credit Issues-more available, but still squeezed Gas Prices-came off the peak, bottomed out, creeping back Volatility & Opportunities

Economy  Slow Retail Sales – Auto & Consumer Goods  Government  local cut backs  lower tax collections  schools cutting back  only the Federal Gov’t not cutting back  Unemployment 9.7%…but not the worst ever

Unemployment Rates - Historical Source : Nov./Dec % Aug %

Unemployment Rates Source : Unemployment Rates by State, seasonally adjusted, July National Average for August 2009 = 9.7% Historical High in Nov./Dec = 10.8% R.I. 12.7

Home Equity Tighter Credit Scores Tighter Funding Home Mortgages – Foreclosures/Values Automotive Credit Issues

Auto Loan Delinquency Auto Loan Delinquency DirectIndirect Highest in 19 years! Q Q1 1991Q Q Q Q1 1996Q Q Q1 1998Q Q1 2000Q1 2001Q1 2002Q Q Q Q1 2006Q1 2007Q Q Percent Source : American Bankers Association

Other Loan Delinquencies

Foreclosure Rates

Gasoline Prices Source :

Automotive Trends

Year-To-Year Trend Jan.08 Aug.08 Dec.08 Jan.09 Apr.09 Aug.09 Domestic Car Domestic Truck Import Car Import Truck

Year-To-Year Trend Domestic Domestic Truck Import Import Truck Average Dollar Change in 3Year Old Vehicle Jan.-Aug.09Jan.-Aug.08

Best Performers* of 2008 & 2009 Sporty Car -$642 (-3.1%) Entry Mid-Size Car -$98 (-0.8%) Upper Mid-Size Car -$76 (-0.6%) Entry Level Car -$58 (-0.7%) Compact Car $642 (6.3%) Jan.-Aug. '08 *2006 Models Full-Size Pickup +$2493 (+15.6%) Full-Size SUV +$3837 (+21.8%) Mid-Size SUV +$2915 (+20.7%) Compact SUV +$2825 (+21.7%) Luxury SUV +$2468 (+8.2%) Jan.-Aug. '09 *2007 Models *3 Year Old Vehicles

Greatest Volume Fleet Vehicles * *Q out of top 11 vehicles are Impalas

2007 Chevrolet Impala LS Trend to Continue?

2007 Vehicle Trends

Fleet Model Years * % % % % % % % * Q2 2009

Fleet Vehicles (Biggest Losers*) Luxury Car Mid-Size Car Compact Car Full-Size Car Sporty Car Aug08Aug09 *2007 Vehicles Only Sold in Q2 2009

Fleet Vehicles (Winners*) Cargo Van Crossover SUV Passenger Van Mid-Size SUV Pickup Aug09Aug08 *2007 Vehicles Only Sold in Q2 2009

Looking Ahead… The Opportunities

36-Month $ Residual Trend

36-Month % Residual Trend *2010 Residuals as of 9/01/ * median= 47.26median= 47.23median= 41.28median= mean= 46.96mean= 47.27mean= 41.97mean= sdev= 7.14sdev= 6.61sdev= 7.41sdev= 6.62 N= 285N= 291N= 273N= month Jan.1 Percent.Residuals [percent] for 2007, 2008, 2009, 2010 [All Models]

36-Month $ Residual Trend

36-Month % Residual Trend *2010 Residuals as of 9/01/ * median= 47.48median= 47.25median= 41.72median= mean= 47.32mean= 47.29mean= 40.86mean= sdev= 6.94sdev= 6.62sdev= 6.56sdev= 6.07 N= month Jan. 1 Percent.Residuals (Common Models) [percent] for 2007, 2008, 2009, 2010 Models

36-Month $ Residuals : Winners and Losers Difference is in 36-month Residuals when expressed in dollars. Note : Number in parenthesis indicates number of models in segment. (4) (3) (2) (5) (3) (2) (6) (5) (4)

36-Month % Residuals : Winners and Losers Difference is in 36-month Residuals when expressed in percentage Note : Numbers in parenthesis indicate number of models in segment (3) (2) (4) (5) (4) (5) (1) (4)

 Flex Fuel  Hybrid  Hybrid 2-Mode : GM, BMW, Chrysler (gone)  Diesel  Electric  Driving CAFÉ Standard by 2016 Alternative Fuels

Hybrid vs. Gasoline (Escape)

Diesel Over Gas Premium* [$]

Diesel Over Gas Premium [%] * 2006 & 2007 Models 280% 125% 163% 35%

Dollars Volatility to Reasonable to Steady +$ wks -$ wks -$ wks +$ wks +$ wks +$500 7 wks +$ wks

Volatility (Trucks) 2007 Models Values [$]

Volatility (Trucks) 2007 Models Values [$]

Volatility (Trucks) 2007 Models Values [$]

Volatility (Cars) Values [$]

Volatility (Cars) Values [$]

Volatility (Cars) Values [$]

Bankruptcy* Effect on Values 0% 5% 10% 15% 20% 25% 30% 35% 40% 2-Year Depreciation (2007 Models) [%] Bankruptcy Extinct Remaining Vibe Matrix Caliber Cobalt Corolla FocusMalibu Fusion Camry Tahoe G6 Expedition VUE CR-V Rav4 Outlook Acadia *Lower is Better

Bankruptcy* Effect on Values $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 2-Year Depreciation (2007 Models) [$] Bankruptcy Extinct Remaining Vibe Matrix Caliber Cobalt Corolla FocusMalibu Fusion Camry Tahoe G6 Expedition VUE CR-V Rav4 Outlook Acadia *Lower is Better

 Cash for Clunkers (What’s Ahead for Retail?)  Bankruptcy Brand  Fewer Dealerships-Smaller Inventories  Remarketer’s Internet Auctions  Types of Models, Engine Size, Fuel Efficiencies  Alternative Fuels – CAFÉ by 2016 (35.5 mpg)  Gas Prices and Their Effects  Limited Supply of Used Vehicles  How High Can It Go? (Monthly $, New vs. Used)  Information is King! Final Thoughts  Change-Tough But Inevitable…What You Did in the Past Won’t Work Today or Tomorrow-Applies to Buying and Remarketing  Timely, Independent, Accurate

™ Thank you Ricky Beggs P.O. Box 758 Gainesville, GA