This is an educational example built from a synthetic composite book. It shows how a lender can read its own data: first the headline metrics, then the slope, then the dealer and vintage attribution underneath the average.
Everything below is one example book run through the public tools: the dashboard, dealer scorecard, vintage static pool, vehicle-to-term matcher, and covenant projector. Read it top to bottom as a method note, not as evidence that any outside portfolio was reviewed.
The first pass is the headline view: net charge-offs running 9.6% annualised, 90+ delinquency at 4.2%, weighted FICO 574. The example NCO covenant cap is 13.5%, so the book begins almost four full points under its cap.
If the review stopped right here, the book would look fine. Many internal dashboards stop at the snapshot, which is why the slope underneath the average matters.
Look at the "Monthly Δ" column. NCO is not parked at 9.6%, it is climbing 0.65 points every month. 90+ DPD is climbing 0.30. The level is comfortable. The trajectory is not.
That slope is a straight line fit through the last six months of readings. Carry it forward and the comfortable gap to the cap closes faster than the snapshot implies.
| Metric | Current | Monthly Δ | Covenant cap | Headroom | Status |
|---|---|---|---|---|---|
| NCO (annualised) | 9.60% | +0.65 pp | 13.50% | 3.90 pp | ⚠ 6 months |
| 90+ DPD | 4.20% | +0.30 pp | 6.00% | 1.80 pp | ⚠ 6 months |
| WA FICO | 574 | −1.2 / mo | 560 floor | 14 pts | ✓ Watch |
| 60+ DPD | 7.10% | +0.40 pp | n/a | n/a | ⚠ Elevated |
| Advance rate (blended) | 112% LTV | stable | n/a | n/a | ✓ In policy |
The next question is whether the whole book is deteriorating or whether a small number of channels are dragging the average. That answer determines whether the issue is broad portfolio drift or channel concentration.
So the report attributes loss by dealer. Every dealer is ranked by loss and early-payment-default behavior, not just by volume.
| Dealer | Loans | % of book | Net loss | EPD rate | Severe 60+ | Flag |
|---|---|---|---|---|---|---|
| Dealer N | 92 | 4.6% | 29.3% | 38.1% | Toxic | |
| Dealer H | 148 | 7.4% | 27.0% | 35.8% | Toxic | |
| Dealer C | 200 | 10.0% | 27.8% | 34.2% | Toxic | |
| Dealer F | 118 | 5.9% | 9.1% | 18.3% | Watch | |
| Dealer M | 95 | 4.8% | 8.4% | 17.1% | Watch | |
| 13 remaining dealers | 967 | n/a | 6.8% | 13.2% | Clean |
Three names do almost all of the work: Dealers C, H, and N. Together they are 22% of your originations and 51% of your severe delinquency. Their early-payment-default rate is around 28%, nearly four times your network median. That is the tell. EPD this high means these loans were not good loans that went bad. They were bad the day they were written.
Meanwhile your 13 clean dealers are running 5.1% loss, comfortably under market. You do not have a book problem. You have a three-dealer problem hiding inside a book-level average.
Knowing who is half the answer. Knowing when shows whether the deterioration is still happening or already behind the lender. Each origination quarter is lined up as its own static pool and aged at the same number of months on book. That strips out the "newer loans look better because they are younger" illusion.
| Vintage | Loans | Orig $ | Avg MOB | 60+ DPD | Charged off | Cum net loss |
|---|---|---|---|---|---|---|
| 2023 Q1 | 371 | $5.9M | 39 | 6.1% | 9.4% | 9.8% |
| 2023 Q2 | 368 | $5.8M | 36 | 6.4% | 8.9% | 9.3% |
| 2023 Q3 ▲ | 374 | $5.9M | 33 | 8.8% | 11.2% | 12.4% |
| 2023 Q4 ▲ | 369 | $5.8M | 30 | 9.1% | 10.8% | 11.9% |
| 2024 Q1 | 377 | $6.0M | 27 | 5.9% | 5.2% | 6.1% |
| 2024 Q2 | 141 | $2.1M | 24 | 4.8% | 3.1% | 3.4% |
The break is the back half of 2023. The Q3 and Q4 pools are running 12% cumulative loss at month 30, while the older 2022 and early-2023 paper sat near 9% at the same age. Same dealers underneath, same loan structure. And notice 2024 is already coming in cleaner, which suggests whatever changed in late 2023 has partly self-corrected, while the bad vintage is still bleeding.
Here is the why, because when the bank asks, you want to say you understand the cause, not just that you spotted the symptom. The flagged paper is 72-month terms on 8 to 10 year old vehicles. Put the depreciation curve next to the amortization curve and the problem draws itself.
You advanced above the car's value on day one, that is your 112% blended LTV. On a 9-year-old vehicle the value falls off a cliff while a 72-month note barely moves in the early years. The negative-equity gap is widest right where these loans actually default, months 18 to 36. A borrower who hits a bump there cannot sell or refinance their way out, the car is worth thousands less than they owe, so the keys come back instead.
This is the covenant view. The measured slopes are carried forward to the line, matching the style of runway math a warehouse surveillance team would use.
NCO and 90+ DPD both break in month six. The same month. October. A breach trips the cash sweep, the sweep halts new originations, and access to the line is constrained at the exact moment the book would need room to grow out of the problem. The FICO floor is not the immediate worry. That is a year out. The fourth card shows the same book after the modeled intervention.
The instinct under covenant pressure is a book-wide pullback. That is a blunt move, and it treats the 13 clean dealers the same as the three channels creating the loss. Because the report attributes loss to named dealers, the modeled intervention can be more precise.
That one move flattens your slope from 0.65 to 0.22 a month, which pushes the breach from October out past the 18-month horizon. You recover roughly 140 basis points of yield and about 1.8 million of covenant headroom versus the book-wide cut, and your healthy dealers never feel a thing. That fourth covenant card from the last section, the green one, that is this scenario.
The example output below is short enough to act on this week and documented enough to support the next surveillance discussion.