Auto loan delinquencies hit record

Via Fitch:

Pandemic Pressures ABS Performance Record High Delinquency:Both 30+ and 60+ day quarter-end arrears reached record highs of 2.7% and 1.7%, respectively, by end-2Q20. The increase in delinquencies reflects the impact of the coronavirus pandemic on individual borrower and business income; payment assistance provided by lenders has been mitigating some of the impact on borrowers. Higher arrears are also partly attributable to the reduced size of the index, as ABS issuance ceased at the start of the pandemic.

Spikes in 30+ day arrears are a result of a small number of lenders who reported COVID-19-affected loans as arrears. This provides some insight into future performance, although Fitch Ratings expects the full effect of the pandemic to be delayed past 1Q21, following the cessation of payment assistance and government support that offset some of the near-term performance deterioration.

There are 885 words left in this subscriber-only article.

Start your free 14-day trial today!

Comments are hidden for Membership Subscribers only.