  Loan seasoning and inefficient consumer interest rate refinance behavior are
well-known for mortgages. Consumer automobile loans, which are collateralized
loans on a rapidly depreciating asset, have attracted less attention, however.
We derive a novel large-sample statistical hypothesis test suitable for loans
sampled from asset-backed securities to populate a transition matrix between
risk bands. We find all current risk bands eventually converge to a super-prime
credit, despite remaining underwater. Economically, our results imply borrowers
forwent \$1,153-\$2,327 in potential credit-based savings through delayed
prepayment. We present an expected present value analysis to derive lender
risk-adjusted profitability. Our results appear robust to COVID-19.
