Forecast: Auto Residual Values

Dynamic and accurate vehicle value forecasts for the U.S. and Australian wholesale automotive market.

Moody’s Analytics AutoCycle provides data-driven auto price forecasts by leveraging industry-leading economic forecasts. The AutoCycle solution offers a rigorous, quantitative and transparent methodology for integrating economic factors into auto price projections, ensuring accuracy and reliability in your forecasting. Our solution enables you to:

• Calculate forecasts for extensive vehicle portfolios of varying makes, models, mileage, and propulsion types (EV, PHEV, ICE, etc.) with precision at the VIN level for the U.S. and at the model level for Australia
• Account for macroeconomic variables such as gasoline prices, market supply-and-demand variables, and seasonal trends, ensuring a holistic view of factors influencing residual values
• Evaluate alternative scenarios and understand potential risks by generating vehicle price forecasts under normal and stressed scenarios

Moody’s Analytics auto price forecasts are back-tested, transparent and fully documented. They are supported by our dedicated client service team and include direct access to our economists. Forecasts are delivered via API or Excel add-in.

BENEFITS

• Precise vehicle valuation at any mileage at any point in the future
• Unlimited forecasts allow for testing different mileage and/or economic assumptions on the same vehicle
• Granular VIN-level residual value forecasts with U.S. Autocycle
• Granular make, model, and model year residual value forecasts with Autocycle Australia
• Quantitative methodology eliminates all qualitative bias
• Forecasts available for nine different economic stress scenarios-including high unemployment, low oil prices, and stagflation-designed by experienced macroeconomists
• Challenge internal and third-party models’ traditional valuation approaches
• Meet regulatory requirements with in-depth model documentation and validation support
• Leverage Moody’s Analytics expertise in modeling and forecasting
• Get direct and swift access to forecasters, economists and model developers
• High-speed API integration or easy-to-use Excel add-in access
• Strategically enhance profitability with a cost-efficient solution

USE CASES

• Fleet management
• Lease/loan origination
• Loan recovery forecasting
• Securitization and residual risk estimation
• Capital management and planning
• Portfolio analysis
• Loss reserves
• Challenger modeling
• Insurance rate-setting
• CCAR and CECL compliance
• Auditor and IFRS9 compliance

HOW WILL CLIMATE CHANGE IMPACT VEHICLE VALUES?

As the world confronts the realities of climate change, its effects reach far beyond just the environment. The financial system faces a range of impacts, from physical risks such as extreme weather events causing significant losses for businesses and insurers, to transition risks associated with the shift toward a low-carbon economy affecting vehicle values.

The Network for Greening the Financial System, comprised of central banks and supervisors, is leading the initiative to incorporate climate-related risks into financial stability monitoring. NGFS posts multiple climate scenarios that outline potential paths the global economy might take based on various decisions and actions to mitigate climate risk. These economic scenarios are further developed and expanded upon through Moody’s Analytics Climate Risk Scenarios.

Clients have the option to integrate Moody’s Analytics Climate Risk Scenarios into the AutoCycle VIN-level forecasts and Autocycle Australia vehicle-level forecasts. AutoCycle allows you to explore the anticipated impacts on vehicle prices resulting from different assumptions under six distinct NGFS-based climate scenarios.