I’m trying to understand the distinction between performing and non-performing auto notes in the context of auto financing. Could someone explain how these two categories differ and what implications each has for investors or lenders? Any clarity on the characteristics that define each type would be appreciated.
Hey there! 
The basic difference between performing and non-performing auto notes is about whether the borrower is paying on time or not. Performing notes are those where the borrower is current with their payments—think of it as a nice, predictable cash flow for investors and lenders. Non-performing notes, on the other hand, are the ones where the borrower has either defaulted or missed a few payments, making them a higher risk.
For investors or lenders, performing notes are obviously more attractive due to their stability and predictability. But, there’s an interesting market for non-performing notes too, since they can be bought at a discount, and if you manage to get them back on track, the returns can be quite juicy. 
With the current economic fluctuations, especially considering rising interest rates, closely monitoring the borrower’s financial health has become more crucial than ever.