...Despite the weak economy and high unemployment levels, auto lenders did benefit from seasonal trends in the first half of the year, thanks in part to the 16.4% improvement in the Manheim Used Vehicle Value Index since year-end 2008, although loss rates did continue to increase year over year. Fitch Ratings believes the recovery in used car values could lose momentum as higher prices and the government's Cash-for- Clunkers program attracts buyers to the new car market instead. Potential declines in recovery rates combined with upticks in second-quarter delinquency rates, which are a common seasonal trend, signal higher loss rates in the back half of the year, and contracting portfolios will continue to push loss rates higher. Still, some lenders are starting to sound a bit more optimistic about 2010 credit performance, as poorly performing 2006 and 2007 vintages hit peak seasoning by year end and more recent originations start to account for a greater portion of portfolio performance early...
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