KBRA releases its auto loan ABS indices for February 2022.

February remittance reports showed that auto loan credit performance continued to soften across prime and non-prime loan pools during the January collection period. Broadly, we expect credit performance to continue to weaken in both indices throughout 2022, as inflationary pressures and the lack of further stimulus weigh on consumer balance sheets. However, tight labor markets, excess savings built up throughout the pandemic, and the approaching tax refund season should help to hamper any sudden or meaningful deterioration in credit. It is also probable that auto loan net loss rates will eventually come under increasing pressure as used vehicle values begin to normalize, but this may not occur in 2022.

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KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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