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. (more…)