Skins Alternative ways to generate higher resolution AO maps?

Ever since I began creating skins for Assetto Corsa I used Content Manager to generate the ambient occlusion layers in higher resolution than the ones provided by each car's template. However, these AO layers are very far from being perfect, if you spend some time looking closely at certain areas of the skin you'll see some ugly details like little squares that affect the base color of the car. I figured out this wouldn't be much of a problem since it's barely noticeable if you're not looking for it and most people drive in cab view, but I wonder if there's a better way around this. I'm still fairly a rookie when it comes to texture creation and I need to learn a lot of things yet.
 
Usually 4x4 squares of offcolor pixels are more due to DDS compression than the AO you use, you might want to play around with the DDS settings to see if there's a less visible error mode (eg. set it to minimize hue error instead of luminance)
 
also if you create AO bakes with CM, for me it always automatically wants to save as dds, but you can choose png which is the better format to use if you want to further work with it in photoshop or some other tool.
 
Usually 4x4 squares of offcolor pixels are more due to DDS compression than the AO you use, you might want to play around with the DDS settings to see if there's a less visible error mode (eg. set it to minimize hue error instead of luminance)
Right when I began skinning I had some doubts about the appropiate DDS profiles to use when rendering skins. I use DXT5 with interpolated alpha as someone suggested me once.

also if you create AO bakes with CM, for me it always automatically wants to save as dds, but you can choose png which is the better format to use if you want to further work with it in photoshop or some other tool.
I actually do this, I save the baked AO file as PNG, because if I try to save the baked AO file as a DDS then Photoshop CS6 doesn't let me open it.
 
Then it's just the nature of DXT5 for you... it's actually a pretty low quality thing for skins since it only does 565 color (instead of 888) and each 4x4 block can only have 2 real colors in it.
 
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