June 16, 2024

Losses on securitized nonprime auto loans increase by 202 basis points

Net losses and delinquencies across prime and subprime securitized auto loans improved month over month but worsened year over year in April. The improvement in month over month performance can be attributed in part to tax refunds enabling borrowers to meet their loan obligations, as per the latest report from Kroll Bond Rating Agency’s auto loan index, which evaluated the performance of various auto loan portfolios in […]

1. What factors contributed to the improvement in auto loan performance month over month?
– Tax refunds played a significant role in enabling borrowers to make timely loan payments.

2. How did net losses and delinquencies differ between prime and subprime auto loans?
– While both categories saw improvements in performance compared to the previous month, year-over-year trends showed a worsening for both prime and subprime loans.

The analysis from Kroll Bond Rating Agency’s auto loan index highlights the impact of external factors such as tax refunds on the performance of auto loan portfolios. It is crucial for lenders and investors to closely monitor these trends to mitigate risks and make informed decisions.

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