European auto ABS performance was mixed over the 12 months to March 2026. Loan performance softened year-over-year (YoY), with annualised losses and late-stage delinquencies moving higher, while lease performance remained more stable and 60+ day arrears declined. Despite some recent softening in loan metrics, index levels remain low in absolute terms across both loan and lease pools. March data also showed a month-on-month (MoM) increase in both loan and lease annualised losses, pointing to some additional pressure at period-end.
The backdrop became somewhat less supportive toward period-end, as higher fuel costs and a pickup in energy-led inflation added to household cost pressures. Separately, in the UK, the Financial Conduct Authority's (FCA) finalisation of its motor finance compensation scheme has reduced uncertainty around the potential scale of redress, although the key analytical focus for UK auto ABS remains operational risk at the lender or servicer, rather than…
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