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THE GOOD FIGHT: Paul John, executive director of the Georgia Independent Automobile Dealers Association, discusses how the association fought against state legislation that would have raised the taxes on used-car purchases.

Delinquencies Rise, Outlook Remains Stable

Delinquencies Rise, Outlook Remains Stable Featured

The seasonably slow summer months are translating to notable increases in annualized losses and delinquencies for U.S. subprime auto loan ABS, according to the latest index results from Fitch Ratings. In contrast, prime auto ABS saw fairly stable performance last month, though the pace of losses is likely to increase as the fall approaches.Subprime 60-plus-day delinquencies rose 13 percent month-over-month in July to 4.59 percent. This rate was still below the record peak 5.16 percent level recorded in early 2016. Subprime ABS annualized net losses (ANL) hit 7.39 percent in July.The summer months typically produce weaker asset performance as consumers head for vacation. Increased losses are emanating from weaker collateral pools in the 2013-15 transactions, which have weaker credit quality including lower FICO scores, higher amounts of extended loan terms (over 60 months) and higher LTVs. Further, early defaults on extended term loans in pools are driving loss severity higher along with loss rates in 2016.Prime delinquencies moved higher month-over-month to 0.4 percent in July. Prime ANL were at 0.48 percent last month. Prime auto ABS continues to produce solid asset performance in 2016, supported by a surprisingly strong wholesale vehicle market, which is benefitting from very robust truck and SUV values.Ratings performance remains solid in 2016, with Fitch issuing 47 upgrades through mid-August versus 41 during the same period in 2015. Fitch's prime sector outlook for the remainder of 2016 is stable for asset performance even with losses expected to rise, and positive for the ratings outlook. The outlooks are both stable for the subprime sector.Fitch's auto loan ABS indices track the performance of $93.5 billion of outstanding collateral, of which 60 percent is backed by prime collateral and remaining 40 percent subprime.
Read 5324 times Last modified on Monday, 29 August 2016 18:16
Consumer Reports Ranks Brands For Reliability

Consumer Reports Ranks Brands For Reliability

Toyota and Lexus once again finished atop the Consumer Reports’ Annual Auto Reliability Survey, but the news was the No. 3 finisher – Buick.The General Motors division became the first...

Kawasaki Recalls Motorcycles for Shock Absorbers

Kawasaki Recalls Motorcycles for Shock Absorbers

Kawasaki Motors Corp., U.S.A. is recalling 2,383 2017-18 ZR900AH, ZR900BH and ZR900BJ motorcycles. The rear shock absorber tie-rod frame mount holes can become elongated if the rear shock...

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