1. Scott Cary – Division Director Major Dealer, NextGear Capital Amplify Your Earnings Increase Profitability and Growth through Used Inventory Finan cing

2. Agenda 2 Todd Gunderson | NextGear Capital | DVP, Franchise & Major Dealer | todd.gunderson@nextgearcapital.comtodd.gunderson@nextgearcapital.com Auto Industry Update Used Sales Impact on Franchise Dealers Manufacturer vs. non- Manufacturer Financial Providers Summary and Q&AQ&A

3. Auto Industry Update 3 56.4 MILLION New and used vehicles in 2015 (up 5.6% from 2015) 38.3 MILLION NEW USED *Source Edmunds.com 18.1 MILLION +4.0% Overall transaction price

4. 4 Used Sales Impact on Franchise Dealers + 2.5 MORE THAN NEW CARS USED 42 MILLION SOLD

5. 5 Used Sales Impact on Franchise Dealers Source: Manheim 31%31% of Franchise Dealership Sales Dollars USED SALES 13.1 % Dealership Margins Fell to

6. Used Vehicle Margins Decline 6 YearProfit Margins200910.7% 20109.7% 20119.7% 20129.2% 20138.8% 20148.6% Gross percent of used sales – 20 % over last 6 years

7. Used Vehicle Margins Decline 7 Fresh Cars Deliver The Best Gross

8. What Impact Do Used Sales Have on Rest of Business? 8 Increased Used Vehicle Sales Velocity Equals Related Gains in F&I and Service/Parts Departments

9. Key Considerations for Used Vehicle Segment 9 1.Market days supply Benchmark: 70 days o 65 days or less will usually sell quickly o Balance needed 2. Cost-to-market Benchmark: 45 days o Reconditioning and packing units can hurt ROI and profitability o 84% cost-to-market metric Source: NADA, NIADA, vAuto 3. Inventory Age Benchmark: 45 days Vehicles lose front-end profit at 45 days due to: o High cost to acquire units o Price competition o Carrying costs o Depreciation

10. Manufacturer vs Non-Manufacturer Floor Plan Providers 10 WHAT’S IMPORTANT TO DEALERS? Level of Service Technology Collaborative Relationship Does your floor plan lender offer this for your used inventory? Source: JD Power

11. Manufacturer Floor Plan Providers 11 Geared more to New Cars Loyal to Product Instead of Dealer RESTRICTIONS Mileage Age

12. Non-Manufacturer Floor Plan Providers 12 MAXIMUM CASH FLOW No longer have to wholesale or invest cash to sell unit and impact cash flow. Can sell unit on lot rather than at an auction. Can add products (GAP, VSC, wheel- and-tire) to unit. Auction Purchases Trade-ins Wholesale Units Dealer-owned Inventory Private Owner Purchases $ FINANCE FROM MULTIPLE BUYING CHANNELS

13. Non-Manufacturer Floor Plan Providers 13 PAYING OFF TRADE INS $ Does your floor plan provider do this for you? Saves time and energy on your behalf. FEWER RESTRICTIONS Capitalize on Current Market Environment

14. New-Age Thinking 14 Need a consultative partner – not just a lender Does your floor plan provider understand your business model? Can it speak to: Inventory management Finance and Service Department growth Fostering growth through non-manufacturer products and faster turn times?

15. Summary 15 NEW USED + = Manufacturer lenders maximize new supply Non-manufacturer lenders maximize profits & flexibility

16. Questions 16 CONTACT INFO Full Name: Scott Cary Company: NextGear Capital Job Title: Division Director, Major Dealers Email: scott.cary@nextgearcapital.com