NEW YORK--(BUSINESS WIRE)--Link to Fitch Ratings' Report: Auto ABS Index: In the Auto ABS Driver's
Seat
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=804268
Delinquencies and losses climbed for U.S. auto ABS during third-quarter 2014 (3Q'14) following typical fall season patterns, with the slowdown likely to continue this quarter and into next year, according to Fitch Ratings in its latest quarterly auto ABS index.
Though still within Fitch's initial expectations, subprime auto ABS losses reached levels not seen in four years last month. Additionally, used vehicle values have fallen for five straight months. 'While still healthy, the wholesale auto market will be pressured from rising volumes into 2015,' said Senior Director Hylton Heard.
Lease residuals are also seeing some pressure. Auto lease ABS residual values (RV) losses rose in 3Q'14, with some platforms now seeing losses for the first time in several years. Fitch's RV Index declined to a 2.1% gain through 3Q2014, down from 8.4% through Q2.
Not surprisingly, increased market competition is contributing to the recent market volatility. 'With auto lenders jostling for market share, both underwriting and credit quality will suffer if lenders look to expand share and grow their portfolios aggressively,' said Heard.
The U.S. Auto ABS Index report is part of Fitch's series of structured finance index reports. The index reports are updated quarterly and are available at 'www.fitchratings.com' or by clicking on the above link.
Additional information is available at www.fitchratings.com.
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