The arrears rates among the Australian prime car loans that provide collateral for asset-backed securitisations deteriorated over the first quarter of 2016. The annualised net-loss rate for these loans increased 13 basis points, quarter-on-quarter, to 0.54 per cent to the end of March 2016.This is according to Fitch Ratings' latest Dinkum ABS Index, which tracks performance of prime auto loans.Fitch expects rising delinquencies to translate into higher net losses in the next two quarter of 2016 calendar years. In addition, seasonality was the key driver of increased arrears and losses in 1Q16, with 30+ days' arrears at a record high of 1.46 per cent, amid historic low wage growth. "The 29 bp increase [compared to 4Q15] is the highest quarterly increase since the start of the Fitch Dinkum ABS Index in 2010 and above the five-year historical average of 17bp," Fitch said."Despite this, losses remain low and current ratings can withstand multiples of current loss levels," the agency said in its report, released this week. Strong sales in the first part of the year combined with a relatively low level of securitisation of car loans led Fitch to suggest pressure is building for more ABS activity.Looking further ahead, Fitch warns that wage growth which currently is below historical averages will be a major threat to borrower performance. However, other economic fundamentals remain strong, with stable consumer sentiment and declining inflation and unemployment rates.