Standard & Poor's in a note released today said that it expects easing underwriting standards to drive subprime auto collateral losses modestly higher versus current historical low levels.

However, ratings are still expected remain stable, analysts stated.

Although 1Q12 delinquencies and repossessions dropped, auto lenders have also eased credit underwriting standards. S&P cited data from Experian Automotive.

The proof for easing credit underwriting standards include an 11% year-over-year growth in subprime borrowers in 1Q12, the average credit scores decreasing 6 points for buyers of new cars and 4 points for purchasers of used-cars as well as larger auto loans that feature longer terms and lower APRs.

However, in terms of the used-car market, S&P added that seasonal trends and lower gas prices can lower the demand for used cars, and because of this June used-car prices will probably have a modest dip versus near historic highs, citing the, NADA Used Car Guide. The company expects price decreases for hybrids, small and midsize cars because of year-to-date price appreciation.

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