1. Trends in the Used Vehicle Market – Causes & Consequences ACVL Webinar 2/10/11

2. 2 Source: Manheim Consulting January 1995 = 100 Manheim Used Vehicle Value Index

3. 3 All Manheim U.S. sales (5+ million annually) Classify by market segment Account for shifts in mileage Weight to provide unchanging mix Seasonally adjust Steps: A single measure of used vehicle price change that is independent of underlying shifts in the characteristics of vehicles being sold Concept:

4. 4 Manheim Index Sample Distribution by Market Class Source: Manheim Consulting

5. 5 Luxury Vehicles as % of Total Auction Sales

6. 6 Percent Distribution of Auction Sales By Model Year Source: Manheim Consulting

7. 7 Average Mileage - Compact Cars Sold at Auction

8. 8 Source: Manheim Consulting Average Auction Price – Fullsize SUVs

9. 9 Price Changes for Selective Market Classes Source: Manheim Consulting Annual Average % Change, 2009 - 2010

10. 10 Manheim Used Vehicle Value Index – Annual Average Percent Change Source: Manheim Consulting

11. 11 Source: Bureau of Labor Statistics New Vehicle CPI 1982-1984 = 100

12. 12 Year-over-Year Percent Change in New Vehicle CPI Source: Bureau of Labor Statistics

13. 13 Source: Bureau of Labor Statistics & Manheim Consulting Dollar Change Over 3 ½ Years in New Vehicle CPI and Manheim Index

14. 14 Manheim Index versus Mix & Quality Adjusted New Vehicle Price 3 ½ Years Prior Source: Bureau of Labor Statistics & Manheim Consulting

15. 15 Rental: Stability Ahead New vehicle sales into rental stabilizing at “new normal”. Shift from program cars to risk units is completed. Increased service life for risk units has leveled off. Off-rental prices will show stability at current high base.

16. 16 New Vehicle Sales Into Rental & Rental Fleet Size Source: Bobit Business Media

17. 17 Distribution of New Vehicle Sales into Rental - Program versus Risk Source: Bobit Business Media & Manheim Consulting

18. 18 Average Mileage – Rental Risk Units Source: Manheim Consulting

19. 19 Average Auction Price – Rental Risk Units Source: Manheim Consulting

20. 20 Leasing: Growth in Originations & Satisfaction Source: Manheim Consulting Lease Originations - Millions of Units

21. 21 Lease Penetration Rates by Manufacturer 20082009 2010 Chrysler17.0%2.9%9.2% Ford15.1%5.5%9.8% GM11.1%2.1%8.8% Honda19.4%18.7%28.7% Toyota15.8%15.6%24.5% Hyundai2.4%2.2%12.3% BMW51.0%51.3%48.6% Mercedes-Benz49.2%46.6%51.7% Total Industry17.9%13.1%19.1% Source: J.D. Power and Associates

22. 22 Source: Ally GMAC Sales Proceeds as % of ALG – U.S. Lease Terminations

23. 23 Off-Lease Volumes – Another Down Cycle Ahead Source: Manheim Consulting

24. 24 Repossessions: Lower Volumes & Older Units Source: Manheim Consulting Number of Repossessions - Millions of Units

25. 25 Source: 1999-2009 NAAA Surveys, 20010-2015 Manheim Consulting estimate Dealer Consigned Vehicles Sold at NAAA Member Auctions Dealer Consignment: Steady Growth Ahead

26. 26 Source: Automotive News Seasonally Adjusted Annual Rate - 3-Month Moving Average New Car & Light-Duty Truck Sales

27. 27 New Vehicle Sales: A long-term perspective millions of units Source: Automotive News New Car & Light-Duty Truck Sales Used Vehicle Production

28. 28 Vehicles in Operation from 2 & 3 Model Years Past (in millions of units)

29. 29 Used Vehicle Retail Sales Source: CNW Marketing Research

30. 30 Ratio of Used Vehicles Retailed to New Vehicles Retailed Source: Automotive News & CNW Marketing Research

31. 31 Certified Pre-Owned Sales In Millions Source : Automotive News

32. 32 % Change Used Units Retailed – Same Store Basis ( Publicly-traded Dealership Groups) Source: Company filings Weighted average for KMX *, AN, PAG, SAH, GPI, ABG, and LAD *KMX shifted forward one month to correspond with calendar quarter

33. 33 Monthly Change In Nonfarm Payrolls 3-month moving average – in thousands Source: Bureau of Labor Statistics

34. 34

35. 35 Retail Sales Recover from Summer Slowdown Retail Sales, excluding motor vehicles - Monthly Percent Change - Seasonally Adjusted Source: U.S. Department of Commerce

36. 36 Source: Bureau of Economic Analysis Personal Savings as % of Disposable Personal Income Savings Rate Rises

37. 37 Source: Bureau of Economic Analysis Personal Income & Wages and Salaries Year-over-year percent change based on 3-month moving average

38. 38 Household net worth rises in third quarter of 2010 Source: Federal Reserve Board Percent Change from Previous Quarter

39. 39 Household net worth recovers, but remains $11 trillion below its peak. Household Net Worth – In Trillions

40. 40 Outlook and Implications New vehicle sales –A lower underlying trend –Movements around that trend driven by labor market and credit conditions –Manufacturers maintain inventory and pricing discipline Retail sales and profits continue to shift in favor of used vehicles Less supply and stable demand means strong used vehicle pricing Economic recovery may surprise to the upside in the near-term, but we will fail to achieve previous peaks in employment, household net worth, and new vehicle sales prior to the next recession.