(Bloomberg) — U.S. Auto Sales, a car dealer that caters to consumers regardless of their credit history, has temporarily closed its dealerships as pressures in the auto market rapidly mount.
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The firm, founded in Lawrenceville, Georgia, is working on a solution to re-open its operations as soon as possible, according to a post on its website. The company, which says it offers financing for all credit levels, has several dozen locations across the southeastern part of the country.
Representatives for the firm didn’t immediately respond to a request for comment.
Financing for cars has become harder to come by as lenders tightened their underwriting standards for consumers who have burned through much of their pandemic-era savings. Capital One Financial Corp. recently announced that it’s exiting a lending business for car dealerships, citing a “more challenging economic environment.”
U.S. Auto Sales has regularly turned to bond markets to raise money from investors, packaging subprime auto loans into bonds known as securitizations for sale to institutional investors. It most recently sold a $233 million bond in June of last year.
As more auto loan borrowers fall behind on payments, the loans within those bonds have been performing worse. Late last month ratings agency Moody’s downgraded several portions of the bond it sold in 2022 as well as another it sold in 2021, after an entity connected to U.S. Auto Sales restated gross and net loss data for the underlying loan pools, according to a March 31 report by Moody’s.
U.S. Auto Sales said in its post that its affiliated loan servicing company is still accepting payments.
–With assistance from Michael Sasso.
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Source: https://finance.yahoo.com/news/subprime-car-firm-u-auto-152639500.html