"Subprime credit losses are accelerating faster than the prime segment, and this trend is likely to continue as a result of looser underwriting standards by lenders in recent years," said Michael Taiano, a director at the credit-ratings agency.


"The tightening of underwriting standards is likely a response to expected deterioration in used vehicle prices and the weaker credit performance experienced in the subprime segment," added Taiano.

Used-car price declines have accelerated more recently, which will likely pressure recovery values on defaulted loans and lease residuals, the analysts said.

One measure, NADA's Used-Vehicle Price Index, tracking wholesale prices of used vehicles up to eight years old, declined over 6% in 2016 and was down 8% year over year in February 2017, marking the eighth consecutive monthly decline.

Comments: Be the first to add a comment

add a comment | go to forum thread