Carbiz Inc. Loses Funding, Ceases Operations
Carbiz Inc. has officially ceased operations, according to documents filed with the Securities and Exchange Commission. The news follows months of uncertainty for the buy-here, pay-here (BHPH) dealer group, which operated 25 stores in nine states.
SARASOTA, Fla. — Carbiz Inc. has officially ceased operations, according to documents filed with the Securities and Exchange Commission. The news follows months of uncertainty for the buy-here, pay-here (BHPH) dealer group, which operated 25 stores in nine states.
The company had been working to secure a new line of credit after receiving notices of default from its two senior secured lenders, Dealer Services Corp. (DSC) and Wells Fargo Preferred Capital, in late January.
Carbiz and DSC joined forces last year after Carbiz's former financial partner, SWC Services LLC, filed for bankruptcy. With SWC, the company launched an ambitious expansion plan in late 2007. Carbiz would add 26 dealerships and a significant amount of debt to its books before SWC folded.
The trouble began in August 2009, when Carbiz failed to make its scheduled payment to DSC only months after securing a $20 million revolving credit facility with Wells Fargo. Negotiations for costly deferral fees followed, but DSC suspended funding of new inventory for the dealer group.
SEC filings indicate that Carbiz's portfolios were performing well, but the company had to find another source of funding to stay in business. The dealer group's CFO, Stanton Heintz, made this clear in a January 2009 filing, in which he wrote:
"Without further funding from DSC and/or Wells Fargo, and without the ability to use the payments on the leases and loans that secure the indebtedness to DSC and Wells ... the Company will have no ability to make payroll or pay its other debts, and will likely be forced to file for bankruptcy in the very near future."
More Auto Finance
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Auto Credit Plentiful
June numbers show lenders are readily granting access, including to risky borrowers, as consumers leverage themselves to take on high prices.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Cars a Tad More Affordable
May averages show that combined circumstances gave auto consumers slightly better buying power for the month, though average prices were up year-over-year.
Read More →
First-Quarter Sees Long Auto Loan Growth
Experian data show more consumers are tapping the method, along with refinancings, to afford buying. Meanwhile, subprime borrowers are getting more access.
Read More →
Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →