Fitch Ratings is warning that the subprime delinquency rate is on the rise.

Even with sales booming, the auto industry got another warning about easy credit as Fitch Ratings reported that delinquencies on U.S. subprime auto-related asset backed securities have reached a level not seen since the 2008-2009 recession.

The underperforming loans, which have been bundled into securities sold to investors, come from recent vintages driving the increase, according to Fitch. A recent report from Experian also noted rising level of delinquencies in car loans.

Earlier this week, analysts from J.D. Power & Associates, while predicting strong sales for February, noted consumers are opting for leasing and long-term loans at record levels. So far in February, leases and loans of 72 months or longer combined to represent 65.1% of all retail sales, a record level for any month. The previous record was set in January 2016 at 64.3%, according to John Humphrey, J.D. Power & Associates top analysts.

“February sales should reveal solid growth and continued momentum in the auto industry,” said Alec Gutierrez, senior analyst for Kelley Blue Book. “Economic indicators remain positive for the industry, with the unemployment rate down below 5%, average home prices on the rise and gas prices averaging under $2 per gallon. However, increased incentives also are helping consumers close deals, as in recent months incentive spend has approached pre-recession levels.”

Fitch Ratings said subprime delinquencies of 60 days or more hit 4.98% in January, marking the highest level since September 2009. Despite the rise in delinquencies, subprime annualized net losses (ANL) leveled off at 8.72%. Subprime loans were still up 6.5% year-over-year and are expected to trend higher in 2016 closer to the 10% range.

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The rating service also said the weaker performance in the subprime sector is being driven mainly by the weaker credit quality present in the 2013-2015 securitized pools, along with marginally lower used-vehicle values.

“Subprime 60-plus-day delinquencies are trending higher closer to the peak index level of 5.04% recorded in early-2009. Delinquencies rose 6% month-over-month (MOM) in January, and were 4.8% higher than a year earlier. ANL were down 1% in January MOM, and 6.5% higher year-over-year.

Fitch also said it expects both prime and subprime auto loan ABS asset performance will improve over the spring months with the onset of tax refunds hitting U.S.

(Click Here for more on the CR Automotive Report Card.)

The ratings company, however, only rates the two largest issuers in the subprime auto loan asset-backed securities (ABS) sector, namely General Motors Financial and Santander Consumer USA’s SDART ABS platforms. Cumulative net losses on their recent 2013-2015 transactions are rising marginally, but remain well within Fitch’s expectations.

Fitch has consistently upgraded their subordinate bonds in 2015 and early 2016 as the transactions perform in line with expectations.

The asset-backed securities, in theory, are filled with a mixture of high and medium rate car loans and the subprime paper offered by automakers. But defaults on asset-backed securities filled with mortgages skyrocketed in 2007 and 2008 when sub-prime borrowers failed to repay their loans.  The default crisis was amplified by derivatives such as collateral debt obligations or CDOs, which also wound up in default.

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However, despite deteriorating performance, Fitch continues to have a stable outlook for subprime auto ABS asset and ratings performance in 2016. Fitch expects ANL to rise to or surpass the 10% mark in 2016 as asset performance slows. In the prime sector, 60-plus-day delinquencies were at 0.42% in January, up 8% MOM but 7% lower versus a year earlier. Prime ANL rose to 0.65% in January.

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