The roller-coasterish nonprime industry struck a second major downdraft in September when No. 1 independent AmeriCredit Corp. came off a peak fiscal year to report a sudden liquidity crunch.

With its stock plummeting from a high of $47.80 in April to nearly $9.00 as of Oct. 1, the Fort Worth, Texas-based lender warned that losses from delinquent loans were posing a major concern in subsequent quarters. The stock’s 2002 low was $6.00 a share as short-sellers swarmed to reap profits.

To cushion the losses, AmeriCredit filed a secondary offering seeking more than $600 million in fresh capital. The development came in the wake of Ford Motor Co.’s July shutdown of nonprime loan provider Fairland Credit, of Colorado Springs, Colo.

Another Ford subprime subsidiary, Triad Financial, of Manhattan Beach, Calif., was assuming Fairlane business from Ford dealers, however, in a sign of continuing demand for nonprime loans as economic conditions worsened for a growing number of vehicle buyers.

“Resiliency” of secondary auto finance was cited by one subprime lender CEO, WFS Financial’s Tom Wolfe, as an outgrowth in part of the general economy’s ailments. Shoppers experiencing pocketbook and investment setbacks are increasingly reliant on nonprime loans and even leases to finance their cars and trucks, he said.

The upbeat trend in the special finance market also elevated the portfolio of a consolidator of “buy here/pay here” stores, America’s Car-Mart based in Bentonville, Ark. Six new dealerships were opened by the firm in the summer months, and CEO T.J. (Skip) Falgout reported below-average credit losses and “strong” sales in the face of the “weak economy and labor market.”

Before its liquidity crunch, AmeriCredit Corp. had reported a record fiscal year and June quarter sales and earnings. The lender said its quarterly and annual results were so substantial, with loan volume up 25 percent and net income up 35 percent, that it expected auto loan originations for the 2003 fiscal year to rise to between $10.25 billion to $11.05 billion, compared to $8.9 billion in fiscal 2002.

In racking up a fourth fiscal year quarter of a record $2.43 billion in auto loan purchases throughout the U.S., AmeriCredit in only ten years of existence has mirrored the growth of the subprime market.

AmericCredit’s CEO, Michael R. Barrington, forecast that auto loan originations in the September quarter could increase to $2.55 billion, now that its U.S.-Canada customer roster has surpassed the one million mark and its auto receivables have topped $14 billion.

Record auto contract purchases also were reported by WFS Financial’s parent company, Westcorp, headquartered in Irvine, Calif. The second quarter brought in $1.5 billion in new loans, up 16 percent from the previous year, and enabled Westcorp’s first-half income to spurt 12 percent to $2.8 billion.

For the balance of 2002, CEO Tom Wolfe projects loan originations rising 13 percent to 15 percent to about $5.5 billion for the full year. Westcorp reported record net income of $21.7 million in the June quarter, with Wolfe pointing to “a business model that has been successful even during difficult economic periods.”

Wolfe said in a conference call to analysts and media that WFS had increased its dealer portfolio to about 7,700, of which 75 percent are franchised. “Our relationship with dealers, now covering all states, has never been closer,” he added.

In response to the rocky business climate, Credit Acceptance Corp. (CAC) put the brakes on its loan origination policy in the second quarter, although it still achieved $8.5 million in net profit for the quarter and $14.8 million in the half. The Southfield, Mich.-based lender, a pioneer in the subprime field dating back to 1972, cut its dealer portfolio from 1,046 to 726 as part of a program described by Chief Financial Officer Douglas W. Busk as “an increased focus on improving the return on capital and maximizing the amount of economic profit per share.”

Credit Acceptance, which also is establishing a nationwide network of “boutique” dealers to handle subprime financing, originated 11,990 loans in the June quarter, down 23.4 percent from a year ago, with a value of $137.4 million, compared to $166.5 million.

“The company’s efforts to improve return on capital,” said Busk, “have focused on increasing the spread between the amount advanced to dealer-partners and the predicted collection rate.”

Barrington, Wolfe and CAC’s president, Cincinnati Chevrolet dealer Keith P. McCluskey, agreed that independent lenders in the nonprime field have benefited from the decision by Ford Credit to reduce its subprime loans and close its Fairlane Credit.

America’s Car-Mart said its secondary-finance-only used-vehicle dealerships had exceeded estimates for the company’s first fiscal-year quarter, ended July 31. It has 61 dealerships in seven states and estimates it raised 2002 fiscal revenues to $116.7 million from $97.8 million in fiscal 2001, when it was known as the Crown Group.

AmeriCredit stock is traded on the New York Stock Exchange; Westcorp, Credit Acceptance and Car-Mart stocks trade on NASDAQ.