Auto lending in Europe has traditionally been dominated by companies that lend exclusively to customers of a particular manufacturer. And typically loans made by so-called captive lenders have been less risky than those made by non-captives.

Over the last three years, however, the share of portfolios of securitized European auto loans originated by non-captives has risen significantly. And Moody’s Investors Service says this trend has historically indicated a higher credit risk overall for the market.

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