BLUE BOOK II CAR

[Pages:4]USED

BLUE BOOK

CAR

EDITION

Market Report

March

2014

Automotive Insights from Kelley Blue Book

Kelley Blue Book Public Relations Contacts:

Chintan Talati | Senior Director, Public Relations Joanna Pinkham | Senior Public Relations Manager Brenna Robinson | Senior Public Relations Manager Natalie Kumaratne | Public Relations Coordinator

949.267.4855 | ctalati@

404.568.1735 | jpinkham@

949.267.4781 | berobinson@

949.267.4770 | nkumaratne@

USED-CAR MARKET ANALYSIS:

Used-Car Values Rise Sharply, Some Values Hit Peak

$19,000 $18,500 $18,000 $17,500 $17,000

Used-Car Values Rise Sharply

In This Issue:

USED-CAR MARKET ANALYSIS Used-Car Values Rise Sharply, Some Values Hit Peak

Toyota Corolla Leads Compact Car Segment

SUV/Crossover Values Expected to Increase through April

Full-Size Pickup Truck Values Reverse Downward Trend in March

Mid-Size Sedan Values Move Upward in March

Full-Size Car Values Increase; Hyundai Azera Leads Segment

Auction Values

$16,500

$16,000

$15,500

$15,000

$14,500

CY 2012 CY 2013 CY 2014

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Kelley Blue Book Automotive Insights

? Auction values rose sharply in March 2014, moving up 1.4 percent or $260. This puts the average auction value for March at $18,230, or higher than previously seen in 2013 and 2012.

"This strong upward momentum was expected, as values typically follow a strong seasonal pattern," said Alec Gutierrez, senior analyst for Kelley Blue Book. "However, a number of luxury segments have not seen any price appreciation in the past couple of months, which signals that in some cases values may already have begun to reach their annual peak."

Toyota Corolla Leads Compact Car Segment

Toyota Corolla Ford Focus Kia Soul

Hyundai Elantra Suzuki SX4

Nissan Sentra Honda Civic

Dodge Caliber Kia Forte

Mazda MAZDA3 Chevrolet Cruze Volkswagen Beetle Volkswagen Jetta

Scion tC Buick Verano

Scion xB Nissan cube Toyota Prius Dodge Dart Chevrolet HHR Mitsubishi Lancer Hyundai Veloster Subaru Impreza

Lexus HS Scion xD Honda Insight Lexus CT Ford C-MAX Hybrid Mitsubishi i-MiEV Chevrolet Volt Nissan LEAF

-12.3% -12.6%

-15%

Compact Segment YTD (%)

-8.5%

-4.9% -5.3%

-0.7% -0.8% -1.0% -1.3% -1.9% -2.0% -2.2% -2.5% -2.5%

March 21, 2014 vs. January 1, 2014

1.8% 1.6% 1.2% 0.6% 0.2% 0.1%

6.9% 6.2% 6.0% 5.5% 5.4% 4.6% 4.6% 4.1% 3.9% 3.6% 3.6%

-10%

-5%

0%

5%

10%

Source: Kelley Blue Book Automotive Insights

? The compact car segment as a whole has outperformed every other segment on a year-to-date basis, increasing 4.2 percent since January 2014.

? Looking at model years 2011, 2012 and 2013, as pictured in the chart to the left, the Toyota Corolla has outperformed the compact segment with a 6.9 percent increase, followed closely by the Ford Focus and Kia Soul.

"Alternative fuel and hybrid vehicles within the segment have been some of the worst performing due to the low fuel prices seen throughout the year," said Gutierrez. "This includes the more popular alternative fuel and hybrid vehicles such as the Toyota Prius, Lexus CT, Ford C-MAX Hybrid, Chevrolet Volt and Nissan LEAF."

USED-CAR MARKET ANALYSIS:

continued

SUV/Crossover Values Expected to Increase through April

$24,000 $23,000 $22,000 $21,000 $20,000

SUV/Crossover Values Increase

? In spring, we often see values move upward as part of a seasonal trend. In March 2014, values increased significantly, surpassing where they were in 2013.

? While full-size and mid-size luxury SUV/crossover values have dropped (down 0.3 percent and 0.2 percent, respectively), there have been positive gains for nonluxury values (1.8 percent on average).

? Looking forward, Kelley Blue Book expects values to continue to increase through April.

Auction Values

$19,000

$18,000

CY 2012 CY 2013 CY 2014

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Kelley Blue Book Automotive Insights

Four-Week % Difference

Compact SUV/Crossover Mid-size SUV/Crossover

Full-Size SUV/Crossover

Luxury Compact SUV/Crossover Luxury Mid-size SUV/Crossover -0.2% Luxury Full-size SUV/Crossover -0.3%

-1%

0%

1%

1%

March 21, 2014 vs. February 21, 2014

1.7% 2.3%

1.4% 1.3%

2%

2%

3%

Source: Kelley Blue Book Automotive Insights

Full-Size Pickup Truck Values Reverse Downward Trend in March

Auction Values

$19,500 $19,000 $18,500

Full-Size Pickup Truck Values

? Values for 1- to 3-year-old pickups increased at the end of the first quarter, reversing the recent downward trend in auction values and ending March only 0.12 percent below levels seen at the start of 2014.

? Values rose 1.16 percent month-to-month from February 2014, and 1.31 percent year-over-year compared to March 2013.

$18,000

$17,500

$17,000

CY 2012 CY 2013 CY 2014

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Kelley Blue Book Automotive Insights

"Despite the recent downturn in residential construction starts, optimism may be growing in expectation of the spring homeselling season, as privately owned housing units authorized by permits rose 7.7 percent in February 2014 from January 2014, and 6.9 percent above February 2013 level," said Gutierrez.

? If increasing permits lead to increasing construction starts and spending, demand for full-size trucks may keep 2014 values above 2013 values.

2 BLUE BOOK Used-Car Market Report March 2014

USED-CAR MARKET ANALYSIS:

continued

Mid-Size Sedan Values Move Upward in March

Auction Values

$20,000

Mid-Size Sedans

$18,000

$16,000

$14,000

$12,000

$10,000

CY 2012 CY 2013 CY 2014 $8,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Kelley Blue Book Automotive Insights

Despite the aggressive month-over-month increase, the mid-size sedan segment as a whole still is down 12 percent in comparison to this time last year...

- Alec Gutierrez

? In March, the mid-size sedan segment rose 3.7 percent from the previous month. Year-to-date, the segment is up 5.7 percent. ? Typically, around this time of year, values aggressively shift upward. This is caused by consumers with a little extra cash, due to tax refunds and

consumers wanting to get into a newer vehicle after the winter months. ? Despite the aggressive month-over-month increase, the mid-size sedan segment as a whole still is down 12 percent in comparison to this time last

year. The segment is still lower in comparison to last year, due to higher used-car supply in the market. Furthermore, the mid-size sedan segment is a highly competitive segment, which allows consumers more room for negotiation, thus driving prices down.

Malibu Passat Camry MAZDA6 Optima Altima Accord Fusion Legacy Sonata

0.0%

Four-Week % Difference

March 21, 2014 vs. February 21, 2014 4.9%

3.7%

3.6%

3.4%

3.3%

3.1%

2.3%

2.2%

2.2%

1.8%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Source: Kelley Blue Book Automotive Insights

? The vehicles with the largest upward movement within mid-size sedan segment are the Chevrolet Malibu, Volkswagen Passat and Toyota Camry, which are up by 4.9 percent, 3.7 percent and 3.6 percent, respectively.

3 BLUE BOOK Used-Car Market Report March 2014

Auction Values

MY13 Retained Value (Auction Value/MSRP)

Full-Size Car Values Increase; Hyundai Azera Leads Segment

$16,000 $15,500 $15,000

Full-Size Car Values Increase

? Full-size car segment values consistently are moving upward in 2014, staying true to seasonal market trends.

? The best-performing vehicles in the full-size car segment for March 2014 were the Chevrolet Impala, Nissan Maxima and Mercury Grand Marquis (up 4.7 percent, 4.0 percent and 2.4 percent, respectively).

$14,500

$14,000

$13,500

$13,000

$12,500

CY 2012 CY 2013 CY 2014

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Kelley Blue Book Automotive Insights

? Chevrolet Impala is performing well due to the halo effect surrounding the all-new 2014 model-year vehicles. Nissan Maxima is enjoying strong demand due to its appealing alternative to many entrylevel sedans, while Mercury Grand Marquis is still holding value due to strong customer loyalty. The last production model year was 2011.

? The worst-performing vehicles in the full-size car segment for March 2014 were the Ford Crown Victoria and Buick Lucerne (down 2.3 percent and 1.3 percent, respectively).

? Ford Crown Victoria demand has dropped as customer preference shifted to smaller, more fuel-efficient vehicles. The last production model year was 2011.

? Buick Lucerne can no longer compete with new, more appealing luxury sedans in today's competitive market. The last production model year was 2011.

Impala Maxima

Four-Week % Difference

March 21, 2014 vs. February 21, 2014 4.7%

4.0%

MY13 Retention % - Full-Size Car

Impala

49.2%

Grand Marquis Taurus CC

2.4% 2.0% 1.8%

Maxima Taurus

55.6% 57.6%

Charger Avalon Azera

0.9% 0.9% 0.5%

300 Charger

63.4% 64.7%

300

0.3%

Avalon

74.1%

Lucerne

-1.3%

Crown Victoria -2.3%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Source: Kelley Blue Book Automotive Insights

Azera

74.7%

0%

50%

100%

Source: Kelley Blue Book Automotive Insights

? Retention values for the 2013 Chevrolet Impala have dropped to 49.2 percent, down 6.3 percent year-over-year. This can be attributed to unchanged model offerings since 2007 as well as the release of the all-new redesigned 2014 model.

? The launch of the refreshed 2013 Hyundai Azera is leading the segment in overall retained value at 74.7 percent.

The statements set forth in this publication are the opinions of the authors and are subject to change without notice. This publication has been prepared for informational purposes only. Kelley Blue Book assumes no responsibility for errors or omissions.

About Kelley Blue Book ()

Founded in 1926, Kelley Blue Book, The Trusted Resource?, is the only vehicle valuation and information source trusted and relied upon by both consumers and the automotive industry. Each week the company provides the most market-reflective values in the industry on its top-rated website , including its famous Blue Book? Trade-In and Suggested Retail Values, and Fair Purchase Price, which reports what others are paying for new cars this week. The company also provides vehicle pricing and values through various products and services available to car dealers, auto manufacturers, finance and insurance companies, and governmental agencies. Kelley Blue Book Co., Inc. is a subsidiary of AutoTrader Group, which includes , vAuto, VinSolutions and HomeNet Automotive. AutoTrader Group is a majority-owned subsidiary of Cox Enterprises.

4 BLUE BOOK Used-Car Market Report March 2014

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