Monthly Overview
Annualized net losses and early-stage (30-59 day) delinquency rates increased 4 basis points (bps) and 7 bps month-over-month (MoM) in KBRA’s Prime U.S. Auto Loan ABS Index but fell 43 bps and 31 bps MoM in our Non-Prime Index. Meanwhile, late-stage (60+ day) delinquency rates posted MoM improvements in both indices. Notably, on a year-over-year (YoY) basis, net losses and delinquency rates remain elevated.
Auto loan performance tends to follow a predictable seasonal pattern—typically improving in the early months of the year as borrowers use tax refunds to catch up on payments. By June, however, this trend often reverses, with net loss and delinquency rates generally rising higher throughout the remainder of the year. We expect credit performance to display this seasonality once again in 2025, especially if evolving U.S. trade policy contributes to slower economic growth, persistent inflation, and a softening labor market in the months ahead.
That said, we except the…