![]() ![]() Two further factors, Future Trends and Fuel Efficiency are specific to the master vehicle being forecast. This profile is applied according to the vehicle sector and fuel type and accounts for the additional inflation/deflation expected for the target vehicle when compared to the sector average. The first metric is an adjustment for the vehicle age. The next adjustment to apply is to the model life overlay which consists of 3 distinct metrics which combine to create the total model life, which contains adjustments for up to 7 years of model life, with the 7 year values being used for any model over this age. More information on Year on Year Deflation In Gold Book iQ these assumptions are exposed for each individual year in the future. For example, the following graphs show how a specific sector and fuel type can differ in terms of overall market deflation:ĭeflation adjustments are applied at the 12/20, 24/40, 36/60, 48/80 and 60/100 age/mileage points and consist of a percentage adjustment to the values obtained at the end of step 2. Each deflation profile is identified according to the vehicle age, sector and fuel type and gives the market-only movement predicted for this group of vehicles.īy breaking the forecasts down into this level of granularity, we can ensure a more accurate and specific deflation forecast. YOY% deflation forecasts are calculated through regression analysis, which is carried out using a wide range of macro-economic supply and demand factors to identify those that are significant in predicting value movements. At a later stage we also capture an additional (+/-) amount related to the age of the individual model, calculated by sector & fuel type from historical data (see Step 4– Applying Model Life Overlay). Since this involves tracking the same models over time, it also incorporates an element of model aging and as a result this will often be a negative (deflationary) adjustment. The overall market is segmented by age, vehicle sector and fuel type and separate YOY% estimates are provided for each age/sector/fuel combination. This is derived from tracking changes to the same age/mileage value for the same vehicles over time and is a ‘pure’ market measure, unaffected by the impact of model replacement (which is taken account of in the starting Black Book value as above). Our expectation of future market movements are expressed in terms of Year Over Year % Deflation/Inflation (YOY%). Step 3 – Applying Deflation (YOY%) Forecasts Therefore the proportional (%) difference typically increases at 4 and 5 years, and this is accounted for via the Black Book proportion adjustment applied to the master vehicle derived values. As the vehicle increases in age and decreases in value, the £ difference between successive generations continues to decrease, but at a slower rate than the vehicle itself. ![]() Proportional (%) differences between successive generations are generally consistent at 1-3 years. A similar process is followed for all 5 benchmark points as necessary. So if a current master vehicle was worth +8% more than the donor vehicle at 12/20, but was not available at 24/40, we would increase the 24/40 value for the donor vehicle by +8% to get the expected 24/40 value for the current vehicle. To create a Black Book value for a current vehicle where it does not already exist in Black Book, we apply a proportional difference (usually an uplift) to the value for the donor vehicle to provide an expected value for the current vehicle (what it would be worth if it was available today at the selected age/mileage). Donor vehicles are always selected as the most closely related to the master vehicle being forecast, however, in some examples it may be necessary to choose a different range, possibly even from a different manufacturer. This could require one or more donor vehicles. Otherwise, we will need to identify a string of ‘donor vehicles’ which will enable us to calculate a Black Book value at the benchmark points. Where these are already available in current Black Book they will be incorporated automatically. Our first aim is to generate current Black Book values for the benchmark points (12/20, 24/40, 36/60, 48/80 and 60/100). Step 2 – Identify Current Black Book Values Forecasts for other vehicles within the range will be set via the Walk-Up process (see later). On some occasions we may select a different benchmark vehicle to aid with competitor comparisons within the vehicle sector. ![]() This is usually the derivative which CAP believes will likely see the most volume in the market, as this will generate more Black Book data for use in reforecasting. Step 1 – Identification of Master Vehicleĭetailed analysis is based on a single vehicle to represent the model range. The following steps describe the forecasting process used to create a Gold Book forecast. ![]()
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