An already disastrous year for the subprime auto lending industry ended on a ominous note as Moody's Investors Service reported a sharp rise in loan losses in some of the sector's better portfolios.

"Most of chargeoff increases we've seen before have been due to companies digging deeper into the credit spectrum," said Moody's analyst Richard Cantor. "But what we're seeing now is rising losses in pools of loans that have had good payment histories."

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