Ford Credit CFO Brian Schaaf told investors last week that the company posted "stunningly low losses" during a second quarter that saw repossession rates comparable to when the automaker halted involuntary repos during COVID-19.
Ford Credit reported a negative net charge-off rate of $9 million and a negative loss-to-receivables rate of 0.07 percent during the quarter.
"That's the first time that's ever happened," Schaaf said of the negative LTR.
Ford Credit attributed the charge-off and LTR stats to "government stimulus, changes in consumer spending behavior and high vehicle collateral values that contributed to historically low losses."
Ford Credit also might have set a record for customers keeping leased vehicles, according to Schaaf.
The return rate fell to 34 percent, compared with the "70 percent range" Ford typically sees, he said.
"I'm not aware of a time where it was ever that low," he said.
Only 36,000 vehicles were returned from leases during the quarter, compared with 58,000 a year ago, Ford Credit reported.
The lender attributed the lease return rate to "improved auction values" tied to dealer inventories curtailed by the semiconductor shortage.
Schaaf said Thursday that the return rate also reflected Ford Credit and Ford and Lincoln sales efforts to "proactively extend the lease" to encourage consumers to order vehicles that could be delivered later in the year.
He expected that the rate would "return to normal levels" when the supply issue was resolved.
But Schaaf also told investors not to anticipate the kind of vehicle supply found before the pandemic.
"There's some real benefits to operating with less inventory," he said. "While receivables will recover, we don't expect a complete return to pre-pandemic levels" for Ford Credit's wholesale business.
Schaaf said he felt auction prices might have "probably hit the peak for this year." He cited the seasonality the industry typically encounters.
"That normalization makes sense," Schaaf said.
However, while "the second quarter was stunning," prices would decline gradually, not "fall off a cliff," Schaff said. He said semiconductor supply and new-vehicle supply and pricing would influence future auction prices.