September 11, 2025
Dear Members,
This important update is brought to us by ARA member James Waldron. As many of us who’ve weathered past economic cycles can attest, signs of trouble often start quietly—then hit hard. We’re beginning to see patterns that resemble the early stages of the last major downturn in auto finance.
What’s Happening Now:
In just the past few weeks, several major developments have emerged:
- Tricolor Auto Group (and its affiliates) furloughed over 1,000 employees and shuttered locations. They’re a major BHPH (Buy Here Pay Here) operation across the southern U.S. and as of today, filed for Chapter 7 bankruptcy.
Bloomberg: Tricolor Bonds Drop After Report of Furloughs - Automotive Credit Corporation (ACC) announced they are indefinitely halting all new loan originations.
Dealership Guy: ACC Pauses Loan Originations - Mechanics Bank has transferred its auto portfolio management to Westlake.
- VW Credit and Audi Financial have transitioned their U.S. loan servicing to Wells Fargo.
Automotive News: VW Loan Business Moves to Wells Fargo
Behind these headlines, banks and finance companies are quietly scaling back or halting originations altogether. This shift is already starting to affect us in the repossession space—and not in a good way.
Why This Matters to You:
If history repeats itself—as it often does—we could be heading into a period of significant disruption in the repossession industry. Here’s what happened during the last major financial crunch nearly 20 years ago:
- Lenders delayed repossessions 90–120+ days, often accepting any partial payment to avoid charge-offs.
- Deferments became widespread, many stretching across multiple months.
- Auto finance companies folded, leaving behind thousands of unpaid invoices to repossession agencies.
- Forwarders collapsed as well, adding to the unpaid receivables.
- Portfolios were sold off to recover liquidity, frequently to unknown third parties with little or no regard for existing vendor relationships.
We watched once-strong agencies shrink or shut down altogether. In our own case, we went from working with 20–30 direct clients to just 3–5 within two years—many swallowed up by forwarders or centralized under companies like Santander, who quickly emerged as dominant players.
The outcome? Agencies unable to match ultra-low pricing or absorb the loss of direct business folded. One of the largest operators in the country went from 30+ trucks—to nothing.
What You Can Do Now:
We’re not sharing this to cause alarm—but to help you prepare:
- Watch your receivables. Don’t let unpaid invoices linger.
- Track client health. Pay attention to credit ratings and warning signs in your lender base.
- Avoid overextending. What looks like a wave of opportunity can quickly crash.
- Diversify. Relying too heavily on one or two large clients, or a single forwarder, increases your risk.
- Stay informed. Trends in auto finance affect us downstream—sometimes drastically.
We’ve seen this cycle before: when things seem too good to be true, they often are. Let’s learn from the past and protect ourselves—and our industry—from repeating the same mistakes.
Stay sharp and stay safe,
American Recovery Association Board of Directors
