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Posted on 10/28/2025 9:05:30 AM PDT by delta7
PrimaLend Capital Partners filed Chapter 11 bankruptcy protection, beckoning the start of America’s personal loan crisis. The subprime auto lender catered to those “buy-here-pay-here” dealerships that cater to those with bad credit. The people cannot pay their loans and the subprime lenders are folding. Delinquencies are rising, repossessions are surging, and the auto-loan market is signaling stresses in the broader economy.
The same issue happened in September with Tricolor Holdings when it filed for Chapter 7 bankruptcy liquidation. Primalend Capital Partners’ assets and liabilities are estimated to be between $100 million and $500 million, as this was no small lender. The auto loan market in the US has seen balances double over the past 12 years. Subprime borrowers have faced the steepest repercussions, with 6.6% of borrowers currently 60 days past due on auto loans, or the highest rate of delinquency on record.
Auto lenders have $1.66 trillion in outstanding loans across the nation, 5% of which are at least 90 days late, up 12.6% YoY. Vehicle costs have soared in recent years, with the average price for a new vehicle coming in at $50,000. Twenty percent of new car owners are paying over $1,000 monthly for their autos.
New car loans have hit 9%, but used cars have hit nearly 14% and buyers seeking buy-here-pay-here loans are willing to take on an even higher fee. Expenses on car repairs alone have soared 33% since the beginning of the pandemic in 2020.
Vehicle repossessions are at their highest level since 2009 during the Great Recession. The trend naturally correlates to historic highs in consumer debt, which spreads into every facet of the economy. The big banks like Barclays and JPMorgan are also taking on hundreds of millions in losses related to these failures and credit stress is on the rise.
Cars are essential for employment in the majority of the nation and subprime borrowers are willing to take on more debt, even when they do not have the funds, to access transportation. This is a massive red flag, especially given the rising rate of unemployment. Consumers have been stretched too thin and it will cause a ripple effect throughout the economy.
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https://www.thestreet.com/automotive/auto-industry-subprime-lender-files-for-chapter-11-bankruptcy
"....The Dallas-based company operated 65 locations in Texas, Arizona, California, New Mexico, Nevada, and Florida.
An economic downturn among combination auto dealer-subprime lenders also created financial distress for subprime lenders who provide them with financing....
>>The subprime auto lender catered to those “buy-here-pay-here” dealerships that cater to those with bad credit.
Who knew that lending money to people who routinely fail to pay their debts would be risky?
It’s hard for Tricolor’s borrowers to make payments when they’re being deported.
Got a prison record....we don’t care.
Don’t have a job...we don’t care.
Don’t expect to pay us....that’s when we care.
That’s why they have ridiculous interest rates.
A huge number of people believe you can turn in a car and just walk away. They believe the debt just goes away.
Paid for in the driveway, sure beats working for your car.
Do they though, when they know the "Too Big to Fail" money is coming?
Although the cash for clunkers program was a while back, it significantly distorted the car market by taking older vehicles off the market. The average cost of repairs probably went down somewhat. But as more vehicles get older, the cost of repairs tends to go up. I think that as the cars that remain age, the cost of repairs could easily go up by 33%, having nothing to do with what Armstrong said.
Why are these nasty lenders loaning people money who clearly can’t afford it and have no businesses borrowing money in the first place?
But they’re NOT cheaper.
It's too bad these people have dug themselves a hole, but a high payment car loan doesn't really help you.
“the upside is cheaper, much cheaper used cars, a good thing.”
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As long as you don’t mind the lingering odor and stains of tacos and burritos.
Made car loans to illegals who who them decided to drive home for a vacation and a new ID.
I have no had an auto loan in 20 or more years. I do as you do. Pay used cash, drive em till the wheels fall off.
Once a year or so if we are doing a long trip I don’t want to fly to, we will rent a car from Enterprise if it’s more than 500 miles.
They charge north of 30% interest. Their business model is designed to make money if 1/4 of their customers don’t pay.
In finance, subprime lending is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. Historically, subprime borrowers were defined as having FICO scores below 600, although this threshold has varied over time. These loans are characterized by higher interest rates, poor quality collateral, and less favorable terms in order to compensate for higher credit risk.
Very few real conservatives are subprime borrowers. Opinion.
Subprime lenders gave us 2008. This will be on the final.
I was wondering the same thing. How many of the delinquent loans are associated with deportations?
Makes sense. We are retired, everyday is saturday. We don’t take many trips. All eight grand kids live a stones throw.
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