Used-car dealer U.S. Auto Sales temporarily closes
The southeastern used-vehicle dealership chain U.S. Auto Sales has closed its 39 locations indefinitely, the company’s website stated Tuesday.
“We have temporarily closed our dealerships and are working on a solution to re-open them as soon as possible,” a pop-up on usautosales.info said late Tuesday morning. “But don’t worry, we aren’t going anywhere!”
The group, which works with car buyers regardless of credit history, told customers its consumer auto loan servicing company USASF Servicing remained open for business and car payments.
A phone call to U.S. Auto Sales was met with a similar recorded message: “Unfortunately, we have had to temporarily close our dealerships,” it began.
A U.S. Auto Sales customer service representative reached by Automotive News said no one was available to talk.
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 recently announced that it’s exiting its floorplan 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.
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.
Founded in 1992 in Lawrenceville, Ga., U.S. Auto Sales’ 39 locations span Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee. The group had 459 vehicles in its inventory as of late Tuesday morning.
U.S. Auto Sales’ closure follows the sudden closure of American Car Center, which Bloomberg said had more than 40 locations.
Bloomberg contributed to this report.