Kroll Bond Rating Agency reported this week that its auto-finance indexes that watch both the non-prime and prime spaces moved in similar directions in April.
But a deeper look at the latest data showed some “slightly less sanguine results.”
Analysts indicated annualized net losses in KBRA’s Prime Auto Loan Index fell 5 basis points month-over-month and 12 basis points year-over-year to land at 0.60%. KBRA noted the number of borrowers more than 60 days delinquent declined 8 basis points month-over-month and 6 basis points year-over-year to 0.36%.
KBRA pointed out that April marked the 15th consecutive month that net losses and delinquency rates have fallen on a year-over-year basis within its Prime Auto Loan Index.
KBRA went on to share that its Non-Prime Auto Loan Index for April showed a similar month-over-month trend with annualized net loses and 60-day delinquencies falling 129 basis points and 75 basis points to 7.18% and 4.20%, respectively.
On a year-over-year basis, analysts determined non-prime net losses declined 26 basis points in April, while 60-day delinquencies rose slightly, ticking up by 6 basis points.
“Although our indices showed improved year-over-year delinquency metrics during the March collection period, loan level data showed slightly less sanguine results,” said Brian Ford, who oversees structured finance research at KBRA.
“The number of prime and non-prime borrowers that went from 60-days delinquent to current in March came in at 24.8% and 21.5%, respectively. This is slightly lower than the 25.6% and 26.9% cure rate experienced in March 2018,” Ford continued.
“Meanwhile, the number of borrowers that were 60 days delinquent to start the month and were subsequently charged-off in March came in at 15.6% for prime loans and 22.0% for non-prime loans, versus 17.1% and 20.5%, respectively, one year ago,” he went on to say.