While firms estimate car prices using internal and third-party models, these often include a degree of subjectivity. As a result, these approaches can produce inaccurate, inconsistent, or biased values that can affect estimations and stress testing programs.
Moody’s Analytics AutoCycle™ solution provides purely quantitative forecasts of car prices under baseline and stressed scenarios, incorporating cyclical economic dynamics affecting the automotive industry. The solution offers a consistent and documented methodology for incorporating economic factors into residual forecasts by accounting for supply and demand drivers, seasonal effects and key macro variables such as gasoline prices.
Banks, captive finance, insurers, auto dealers, rental networks and other firms can evaluate plausible outcomes and mitigate risk for their portfolios of varying makes, models, mileage, years and features, at an 11-digit VIN level. AutoCycle can be used for multiple applications, including as a benchmark for setting future residual values, challenging third-party and internal models, identifying long-term influences on prices, creating competitive advantage, and regulatory stress testing.