NEW YORK -

Kroll Bond Rating Agency (KBRA) noticed “signs of improvement” within the auto loan ABS market in December.

According to its latest report shared with SubPrime Auto Finance News, analysts indicated annualized net losses in KBRA’s Prime Auto Loan Index remained flat on both a month-over-month and year-over-year basis, coming in at 0.74%. KBRA reported the percentage of prime contract holders who were 60 days or past due rose 1 basis point month-over-month in December by edged 4 basis points lower year-over-year to settle at 0.45%.

Meanwhile. KBRA’s Non-Prime Auto Loan Index posted what analysts called “solid results” in December.

KBRA determined non-prime annualized net losses declined 50 basis points month-over-month and 59 basis points year-over-year to come in at 8.95%. Analysts found that non-prime 60-day delinquencies registered in at 5.30% in December, representing a decrease of 6 basis points versus the previous month and 11 basis points compared to a year ago.

“We expect delinquency and loss rates in KBRA’s Prime and Non-Prime Indices to remain elevated over the next couple of months, before beginning a downward trend in March (February collection period), as borrowers begin to receive tax refunds, providing an additional source of cash flow to help them pay their auto loans,” analysts said in the latest report.

KBRA acknowledged its examination of loan level data showed mixed performance in December.

Analysts uncovered that the percentage of prime contract holders who went from 60 days or more delinquent to current sunk 70 basis points on both a month-over-month and year-over-year basis to 20.4%. KBRA also found the percentage of those prime contracts going from 60 days or more delinquent to charged-off fell 80 basis points month-over-month and 230 basis points year-over-year to 15.6%.

Finally, KBRA pointed out the percentage of non-prime contract holders who cured their delinquencies in December fell to 12.5%, down 100 basis points month-over-month and 230 basis points year-over-year.

Analysts added the non-prime delinquency to charge-off roll rate came in at 23.6% in December, down 30 basis points versus November but 170 basis points higher compared to December 2018.