Annualized net losses and delinquencies generally improved month-over-month (MoM) in both our prime and non-prime indices, as tax refunds received during the March collection period have likely provided borrowers with an additional source of cash to make loan payments. With the Internal Revenue Service (IRS) increasing the standard deduction by $900 (7%) for 2023 tax returns in efforts to ameliorate the impact of high inflation, the refund amount received by consumers increased 4.6% year-over-year (YoY) on average. The improvement in net losses was also driven by higher recovery rates.
We expect auto loan credit performance to improve for the next month or two, before tax-related seasonal tailwinds begin to dissipate and summer travel begins to weigh on consumer balance sheets. Current index values as well as MoM and YoY changes are presented in the table below based on April remittance report data. Additional information is available in the graphs that follow.
The data shown in this…