ABS Alert: Retail auto loan and lease ABS performance

Research evidence excerpt

ABS Alert: Retail auto loan and lease ABS performance

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ABS Alert

Retail auto loan and lease ABS

performance

2025 vintage: Prime in line with 2024; subprime weaker 22 May 2026

Early performance indicators show cumulative net losses (CNL) for the 2025 vintage Securitized Products Strategy

(1H25 issuance) in the prime auto loan ABS sector are tracking broadly in line with the United States

2024 vintage, while subprime CNLs are exhibiting relative weakness. Meanwhile, the

2024 vintage is demonstrating improved performance relative to the 2023 vintage in

Chris Flanagan

the prime segment and relative to the 2022–2023 vintages in subprime. Despite this FI/MBS/CLO Strategist

improvement, the 2021–2025 vintages continue to perform worse than the 2020 BofAS +1 646 855 6119

vintage, which remains the strongest in the dataset. The outperformance of the 2020– christopher.flanagan@bofa.com

2021 vintages reflects favorable prior-period dynamics, including tighter underwriting Theresa O'Neill

standards, elevated used vehicle values, and pandemic-related stimulus support. In ABSBofASStrategist

contrast, the weaker performance of the 2022-2023 vintages reflects the expiration of +1 646 855 9285

theresa.oneill@bofa.com

stimulus, alongside elevated inflation and interest rates, rising borrower leverage, and

more accommodative underwriting. AlvinABS StrategistFung

BofAS

Prime auto loan ABS – credit metrics deteriorating +1alvin.fung@bofa.com646 855-9091

In March (April payment date), the prime auto loan 30+ day delinquency (DQ) rate

increased 13bp MoM and 2bp YoY to 1.83%. The net credit loss (NCL) rate increased See Exhibit 137 on page 26 for

6bp MoM and remained unchanged YoY at 0.71%. The one-month recovery rate was commonly used acronyms

59.3%, up 8.3ppts YoY.