NEW YORK — Reporting on November results just before the holidays, Fitch Ratings said the strong momentum in the used-vehicle market continues to buck seasonal norms, leading to "uncharacteristically stable" auto asset-backed collateral performance.

Going into the first quarter of 2011, Fitch said it has dubbed ABS ratings performance for both prime and subprime as "stable/positive."

"Fitch remains cautious with its medium-term outlook," officials pointed out. "Fitch will also monitor the rise of gas prices and its effect on used-vehicle values into 2011."

Discussing the strong used-vehicle market, Hylton Heard, senior director, said, "Tight vehicle supply continues to push used-vehicle values to record levels."

And while he said the company is optimistic about the impact of the strong values on the auto ABS sector in the near term, Fitch remains cautious when looking to the medium term.

"Manufacturers will likely increase production levels at the same time that underwriting standards begin to loosen," he noted.

Looking at prime results, Fitch discovered that these auto loan ABS annualized net losses were mostly stable in November, coming in at a rate of 0.83 percent.

"This is well below even pre-recessionary averages, as tight vehicle supply (as reflected in the unusually high used-vehicle values) combined with conservative underwriting standards from manufacturers continue to contribute to improved loss levels," the Fitch team reported.

The company expects prime ANL levels to range from 0.80 percent to 1 percent going into the first quarter of 2011.

Prime auto loan ABS delinquencies 60-plus days dropped to 0.54 percent in November, down 6.9 percent from October. This continues the trend seen most of the year as market conditions continue to improve in the sector, officials highlighted.

Meanwhile, subprime 60-plus day delinquencies were also down for the month to 3.12 percent, reflecting a 5.5-percent decline since October and a 29.4 percent decrease from 2009.

"Exhibiting a slight departure from the rest of Fitch's indices in November, subprime ANLs increased to 7.05 percent, a month-over-month increase of 12.1 percent," the team revealed. "Fitch notes that due to the limited subprime auto ABS issuance in recent periods, monthly subprime index results are more subject to individual transaction volatility."

The company upgraded 61 classes of auto ABS notes through November, compared with 24 upgrades during the same time in the previous year.

Fitch said its prime auto loan indices totaled about $49.5 billion issued from 77 transactions, while the subprime indices include the performance of 21 transactions totaling about $7.6 billion.