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Second PE-Firm-Owned Subprime Auto Dealer & Lender Suddenly Shuts Down after its Subprime Auto-Loan Bonds Make a Huge Mess

April 19, 2023

by Wolf Richter Wolf Street

“Net losses and gross charge-offs were understated” – Oopsie?

U.S. Auto Sales, a dealer chain owned by a private equity firm and focused on selling and financing lower-end older used vehicles to subprime-rated customers, suddenly “temporarily” shut its 39 dealerships in six southern states today, with a terse announcement on its website:

Attention U.S. Auto Customers. We have temporarily closed our dealerships and are working on a solution to re-open them as soon as possible. But don’t worry, we aren’t going anywhere! U.S. Auto’s affiliated loan servicing company (USASF Servicing LLC) is still open to accept your payments and assist in servicing your account. Please continue to make your payments as scheduled and reach out to us with any account questions.

Sincerely, -The U.S. Auto Team

The Lawrenceville, GA, headquartered company is owned by PE firm Milestone Partners.