Auto loan recoveries monitor
Since the beginning of the COVID-19 pandemic in March 2020, auto loan recovery rates have demonstrated extreme volatility, bouncing between all-time lows and highs. This dashboard uses selected data from Elicient's database of 11.5+ million auto loans in publicly-issued auto ABS deals to track the latest recovery rates by issuer, and shows that much of the volatility in recovery rates is attributable to timing differences between when loans are first charged-off and when they ultimately realize recoveries.
For a more in-depth look at the metrics used in this dashboard, please see Kroll Bond Rating Agency's January 19, 2021 Auto Loan ABS: Working Through the Liquidation Backlog report [free kbra.com account required].
Adjusted recovery rates
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The Standard Recovery Rate is simply the ratio of the total recoveries to the total charge-offs that occurred in a given month. This rate fell precipitously in April 2020, but by late summer had climbed to all-time highs for most shelves.
Time to Liquidation, using the secondary axis, illustrates the average number of months that passed between when a loan was first charged-off and when it realized recoveries. This value increased throughout the pandemic as repossession moratoriums were lifted, allowing servicers to finally liquidate vehicles for loans that had been charged off at the beginning of the pandemic.
The Adjusted Recovery Rate seeks to correct the standard recovery rate for these timing differences by calculating the ratio of the total recoveries in a given month to the charge-offs initially reported for only the loans that had been recovered in that month, rather than the new charge-offs that occurred that month.
Charge-off recoveries
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Elicient subscribers may filter by individual shelves.
The standard recovery rate is highly correlated with the ratio of the initial charge-offs of total loans recovered on during the given month to the new charge-offs during the given month. Historically, the amount of new charge-offs during a given month has outpaced the amount of new and previous charge-offs for loans recovered on during that month. That trend inverted, however, between July 2020 and November 2020.
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