NEW YORK -

Kroll Bond Rating Agency (KBRA) spotted delinquency increases in both the prime and non-prime market segment in January, but analysts see metrics remaining on “solid footing” at least in the short term.

According to the firm’s latest report looking at January data, early stage delinquencies— what it classifies as 30 to 59 days past due — within the KBRA Prime Auto Loan Index climbed 7 basis points month-over-month to 1.04%, while late-stage delinquencies — 60 days or more past due — remained unchanged at 0.39%.

Meanwhile, analysts determined early and late-stage delinquencies in the KBRA Non-Prime Auto Loan Index climbed to 7.60% and 4.41%, respectively. Those January readings represented rises of 23 basis points and 19 basis points compared to the previous month.

In both indices, KBRA said delinquency metrics remained “meaningfully” lower on a year-over-year basis since government stimulus and hardship assistance programs have helped to keep many contract holders current on their monthly payments

“Similarly, annualized net loss rates continue to trend up, but remain well below pre-pandemic levels, partly driven by a strong used-car market and low delinquency rates since the start of the pandemic,” analysts said in the report.

“Moreover, recoveries on a large number of loans charged off early in the pandemic were delayed until later in the summer and fall, which has also helped to keep net losses subdued to date,” analysts continued.

“We expect auto loan credit metrics to remain on solid footing for the time being, as borrowers benefit from a second round of stimulus checks and an additional $300 of federal unemployment compensation passed by Congress and signed into law in December 2020,” they went on to say. “The additional impact of a third round of stimulus, which is currently being negotiated in Congress, would only serve to extend the positive credit trends we have seen since March 2020.”

KBRA closed its latest update by reviewing its examination of January’s Reg AB II asset-level disclosures. What analysts found was mixed credit metrics.

The firm said the percentage of prime and non-prime contract holders who went from 30 days or more delinquent to current came in at 31.9% and 28.9%, respectively. Those January readings constituted jumps of 112 basis points in prime pools and 188 basis points in non-prime pools compared to the previous month.

Furthermore, KBRA indicated the percentage of prime contract holders who rolled from 60 days or more past due to charge-off in January dropped to 13.9%; that’s down 53 basis points month-over-month. In the non-prime space, that roll rate into charge-off dropped 54 basis points to 21.5%.