NEW YORK — Sixty-plus-day delinquency levels on U.S. prime auto loan ABS jumped 10.4 percent in August to 0.85 percent, which approached the 10-year record high set back in the first quarter, Fitch Ratings reported this week.

The decade high is 0.87 percent, which was recorded in the first quarter.

Fitch attributed this surge in part to consumers challenged by rising unemployment and reduced credit access.

"With loss frequency remaining the biggest driver of loss rates on auto ABS, Fitch expects losses to rise further in coming months," explained senior director Hylton Heard.

"That being said, rising losses should remain in check as the resilient wholesale vehicle market should help mitigate loss severity," he added.

Default levels are also increasing simultaneously. Prime annualized net losses were 1.85 percent in August, a rise of 6.3 percent from July, marking the third straight monthly increase in the index.

And as the market heads into the "historically weak" autumn months, ANL is expected to approach 2 percent, Fitch projected.

"Loss severity is currently moderated by rising used vehicle values, helping to slow the rate of increase in loss rates in 2009," officials noted. "Reduced supply in the used-car market, among other factors, continues to support rising used vehicle values this year."

They continued: "The Manheim Used Vehicle Value Index, which tracks the health of the wholesale vehicle market, posted its eighth consecutive monthly increase in August and values are up almost 20 percent from their December 2008 lows."

Although asset performance has declined, Fitch said that most senior-level bonds have still performed "as expected."

Through Wednesday, Fitch has upgraded 20 classes of notes so far in 2009, versus 27 in the same period of last year.