America’s Car-Mart schedules most of its customers’ car payments around payday. About 78% of payments are due weekly or every two weeks, according to the company’s latest quarterly report, and the company says frequent due dates help it deal with problem accounts quickly.
Since Sept. 4, the Arkansas-based buy-here-pay-here chain has been on a similar schedule with its own lenders.
In six weeks, Silver Point Finance and the other lenders on Car-Mart’s $300 million term loan have extended the company’s default waiver seven times. Each extension ran about a week: to Sept. 11, then Sept. 18, Sept. 24, Oct. 1, Oct. 8, Oct. 15 and, in the latest filing, Oct. 22. Every one of them got its own Form 8-K at the Securities and Exchange Commission. The current extension runs through Thursday, Oct. 22.
On Tuesday, Bloomberg reported that Car-Mart is negotiating a sale, which could be done through Chapter 11 or through a shareholder vote. Car-Mart’s own Oct. 15 filing names no buyer. It says the company “believes it has made significant progress towards a transaction” and that talks with outside parties and its lenders are still active.
Car-Mart has 94 dealerships, mostly in small cities across the South-Central U.S., and most of its customers owe their car loan to the same company that sold them the car. Whatever happens to Car-Mart happens to the company collecting their payments.
A five-year loan that needed a waiver in its first year
According to the company’s November 2025 filing, Car-Mart signed the Silver Point credit agreement on Oct. 30, 2025. It was a $300 million senior secured term loan due in 2030, backed mainly by Car-Mart’s customer loans, its inventory and stock in its subsidiaries. The rate was 7.50% on the standard tranche.
Before the loan was eight months old, Car-Mart was operating under forbearance. On June 19, 2026, it signed an amendment and limited waiver covering five problems that had already happened or were expected:
- missing its minimum liquidity covenant
- missing its minimum collateral coverage ratio
- expecting it could not deliver a clean, unqualified audit opinion for the fiscal year ended April 30
- failing to deliver required borrowing-base and liquidity reports
- failing to notify the lenders about any of the above
The waiver came at a price. The interest margin went up 3 percentage points, putting the standard rate at 10.50%. Car-Mart agreed to pay the lenders and their agent up to $18 million in fees. The covenant was also rewritten into a weekly test: Car-Mart had to hold at least $7 million in liquidity “as of Friday of each week” and at least $5 million at all other times.
Starting with the Sept. 24 extension, the lenders also gave Car-Mart temporary relief from those lower liquidity floors and from the collateral coverage ratio.
The amendment required Car-Mart to put two new independent directors with restructuring experience on its board and its special committee. The company’s filing says each is paid $45,000 a month, for at least three months, plus $4,000 for any day his board work runs past four hours. Houlihan Lokey, FTI Consulting and Mayer Brown are advising the company.
About two cars a week per store
The Auto Wire reported on Car-Mart’s cash squeeze in July. The 10-Q for the quarter ended July 31 shows how far the dealership side had shrunk by then.
In that quarter, Car-Mart sold 2,450 cars at retail, down 81.9% from 13,568 a year earlier. The chain had 94 stores, down from 154, after closing 60 locations in fiscal 2026. On average, each store sold 8.7 cars a month, or roughly two a week. A year earlier the figure was 29.4.
Total revenue fell 57.3% to $145.8 million. Car-Mart lost $69.0 million in the quarter, compared with $5.7 million a year earlier. Inventory fell to $35.2 million from $54.1 million just three months before. Wholesale sales, meanwhile, almost doubled to $21.0 million.
Car-Mart’s own explanation is that it didn’t run out of shoppers. The company told the SEC that cutting back on inventory purchases and new loans, “rather than any change in underlying customer demand,” drove nearly every decline in the report.
The problem is where the money goes. Under the structure used in most of Car-Mart’s outstanding securitizations, a large share of what customers pay goes directly to paying down the asset-backed notes sold against those loans. That leaves less cash for buying cars to sell. The filing says Car-Mart also has no revolving warehouse line to fund new loans.
Customers, meanwhile, have kept paying. In the quarter, Car-Mart collected an average of $594 a month per active customer, up from $585 a year earlier. Total collections on its finance receivables were $108.8 million, while it made only $41.0 million in new loans. The share of balances 30 or more days past due rose to 4.6% from 4.1% at the end of April.
Car-Mart’s homepage still invites shoppers to “get pre-qualified.” As of Wednesday, it did not mention the strategic review.
If you have a Car-Mart loan
Car-Mart has not said publicly how a sale or bankruptcy filing would affect its customers. Its SEC filings do show how the loans are set up, though, and that structure points to a few practical points.
The loan doesn’t go away. Car-Mart’s customer contracts are its most valuable asset. Many have already been moved into securitization trusts that issued bonds backed by them, and the Silver Point loan is secured mainly by those receivables. Whoever comes out of this with the company or its loan portfolio will be counting on borrowers to keep paying. A Chapter 11 filing would protect Car-Mart from its creditors. It would not cancel its customers’ contracts.
Keep paying, and keep proof. Car-Mart and its subsidiaries currently service the loans, including the ones held in its securitization trusts. If servicing ever moves to another company, you should get written notice with new payment instructions. Until then, use Car-Mart’s official payment channels, save every receipt and confirmation number, and be suspicious of unsolicited calls or texts telling you to pay somewhere new.
Repossession rules don’t change because the lender is in trouble. Your contract and your state’s law still govern what happens if you fall behind. Car-Mart says it modifies about half of its contracts at some point, usually by stretching the term to lower the payment. If you’re struggling, ask about that before you miss a payment.
Watch the add-ons. In most states, Car-Mart sells an “accident protection plan” that cancels the remaining loan balance if the car is totaled or stolen. It also sells service contracts. At July 31, Car-Mart’s balance sheet carried $34.0 million in deferred accident-protection revenue and $32.8 million in deferred service-contract revenue. Those are obligations to customers that have been paid for but not yet delivered. The filings don’t say how a buyer or a restructuring would handle them, so keep your paperwork.
If something goes wrong with your account, you can file a complaint with the Consumer Financial Protection Bureau or your state attorney general.
Thursday
Car-Mart’s filings list among its risks whether it can get the waiver period pushed to November 2026. Under the June amendment, the deadline could be extended automatically to Nov. 6 if certain conditions were met. Instead, it has been extended one week at a time.
The Silver Point loan turns one year old on Oct. 30. The current reprieve ends eight days before that.
If you financed a car through a buy-here-pay-here dealer, would you know who actually owns your loan right now?
Top photo: File photo of a used-car lot in Mid-City New Orleans, not a Car-Mart location. Photo: Infrogmation of New Orleans / Wikimedia Commons, CC BY 2.0