The latest installment of our Q&A series from the recent Power 300 issue of Auto Remarketing features Anil Goyal, the vice president of automotive valuation and analytics at Black Book. 

In this feature, Goyal looks at maximizing big data in the auto market and offers his take on used-car price trending, as well.

Auto Remarketing: What are some of the ways that big data can prevent the used-car bubble from bursting?

Anil Goyal: Data today is enabling much more visibility into the factors that go into the decision-making process. As an example, dealers and remarketers are using data and analytics in real time to make faster decisions for their businesses. Data can help us buy and sell cars for specific customers either locally or from out-of-town.

What’s more, while seasonal patterns have remained, data helps us navigate subtle hiccups that can disrupt normal seasonal patterns, such as last year when we had a longer-than-normal winter that altered the spring selling season slightly.

AR: How can big data help dealers navigate inventory management and wholesale purchases?

AG: Dealers today need to navigate their virtual inventory. Access to data can provide them with robust visibility into their entire inventory, even when they are on the road or at an auction.

Additionally, online auctions have become a normal part of business, and it’s critical to have the right insight within seconds in order to compete and maximize margin potential. Knowing exactly what’s in your virtual inventory at all times can help you make the right decisions at today’s speed of business.

AR: What are the major ways big data can help lenders and dealers work toward responsible auto finance arrangements, avoiding a repeat of 2007?

AG: Especially for lenders, data and analytics can bring more visibility into a portfolio so lenders can make more profitable decisions on which cars, trucks and segments to focus on.

What’s more, real-time data means lenders can refresh and analyze their portfolios more frequently than just annually, which allows them to have more insightful conversations with dealers about certain cars and trucks they can be more aggressive on for special offers and terms. Lastly, readily available collateral insight means lenders can make decisions without focusing primarily on credit.

AR: What are the factors behind the expected leaner price drops for used cars this year?

AG: Pent-up demand has been a large factor since the end of the recession on why used-car prices have remained strong. However, over a period of time that pent-up demand will start to work through. Now that we have had several strong years of leasing, off-lease volumes will start to chip away at the usedcar price strength. Black Book feels the industry will not begin to feel the majority of these two areas until 2015, which is what will keep prices from dropping too heavily this year.

However, access to real-time data that’s helping dealers and remarketers make quicker decisions has also helped them with their own inventory discipline and keeping them from adding too many cars at any one time.

Editor's Note: Keep tabs on Auto Remarketing Today to find Goyal's weekly look at used-vehicle pricing. 

Other features in this special section include:

4 questions with NextGear’s Brian Geitner
4 questions with NADA Used Car Guide's Larry Dixon
4 questions with Infiniti CPO manager Sam Liang

Stay tuned to Auto Remarketing Today for more.