Losses on the collateral in auto-loan securitizations edged higher in February, according to Fitch Ratings.
This applied to both sub-prime and prime deals.
Asset performance has deteriorated over the past six months, but loss rates still remain only moderately above the historic lows posted in 2012-2013 and below previous years.
The agency sees losses narrowing in March and April thanks to tax refunds flowing back to borrowers.
In the prime sector, annualized net losses totaled 0.49% in February month-over-month, from 0.48% in January. Losses in the subprime segment rose more meaningfully to 7.5% in February from 6.91% in January. This was 25% higher than a year earlier with performance deteriorating over the past year.
While losses rose, delinquencies either remained unchanged or actually fell.
In the prime sector, payments due past 60 days did not budge between February and January, staying at 0.39%. And subprime delinquencies totaled 3.8% from 3.84% in “prior months” Fitch said.
This slight downtrend is a positive for the near future, the agency said.
In Standard & Poor’s auto loan ABS tracker released last week for the month of January, the agency said that net losses had marginally mixed results for prime and subprime sectors, while recovery rates and 60-plus-day delinquencies fell slightly.
S&P said that losses in prime were 0.58% in January from 0.57% in December, while the figure for subprime was 7.16% from 7.19% month-over-month.
Meanwhile, as gauged by S&P, past-due payments beyond sixty days in the prime sector were 0.41% in January, unchanged from December. The number for subprime deals was 3.84%, from 4.13% in January.
But S&P believes that, as a broader trend, subprime auto-loan performance will deteriorate, according to a report the agency put out February 26.
"Looking back over the past 12 years, we view the trend of higher delinquencies and losses as a normalization of lending standards, and part of the normal ebb and flow of consumer lending," the agency said.