Subprime Auto Performance Deteriorates in June; PTI Emerges as a New Differentiator

The latest dv01 Auto Performance report finds the Subprime Auto market reversed course in June, with nearly all metrics underperforming seasonal trends after May's brief outperformance. Increases in impairments and charge-offs ran 2.5 times above seasonal norms, the worst June on record aside from 2022.

What the Data Shows

• PTI is emerging as a new performance differentiator: Loans with PTI below 6, and to a lesser extent from 6 to 9, have materially outperformed higher-PTI cohorts since 2024. Performance gaps across PTI ranges have also widened more than those across income ranges, reinforcing PTI’s growing importance in in differentiating Subprime Auto performance.
• LTV remains the strongest divider: Above 115 LTV loans, now 42% of the outstanding universe, sit over 1,100 bps above pre-COVID levels. By contrast, every LTV range below 105 remains within roughly 110 bps.
• Loss severity set a new record: Severities rose over 100 bps for a second consecutive month, eclipsing 55% for the first time in the available loan-level data history.

What We’re Watching

• With 2026 tracking the 2024/2025 seasonality pattern, how high will impairments climb in the fourth quarter, and will charge-offs finally surpass 2019 levels?
• With PTI emerging as a performance differentiator, will it receive the LTV treatment and take years to be incorporated into pricing decisions?
• How much will the recent improvement in impairments among loan ages 9 to 26 months affect ultimate performance in 2027, and can it override the increased seasoning of the benchmark overall?