Major car dealer cuts 40% of its locations, issues serious warning
Major car dealer cuts 40% of its locations, issues serious warning.
I haven't met many people who were actually able to afford a new car.
Sure, plenty buy them, but suffocating monthly loan payments mean the "affording" part isn't exactly met.
For decades, we shrugged off the warning that a new car loses 10% of its value the second it leaves the lot. The counter-argument was simple: You paid for peace of mind and the guarantee you wouldn't end up stranded on the road.
But today, even buying a used car is a crushing mathematical problem.
According to Edmunds , the average monthly new-car payment has hit a record $777 , and 20.3% of buyers pay $1,000 or more monthly. To cope, many stretch loans over six or seven years. Edmunds' Ivan Drury calls this a "mathematical trap," warning that pairing a 7.0% APR with an 84-month loan means handing over nearly $10,000 in interest alone, leaving buyers "highly vulnerable to falling underwater."
Used-car buyers are squeezed just as hard, financing an average of $30,414 at 10.5% interest. For subprime buyers, Experian data show interest rates averaging a staggering 19.4% to 21.7% .
That pressure isn't just hurting buyers. It is also hitting the dealerships that specialize in financing customers with weaker credit. Now, one of the largest chains in the country has dramatically reduced its footprint.
A major automotive retailer that operates a chain of used-car dealerships, America's Car-Mart reported on July 14, 2026, its fourth-quarter and full-year results for the period ended April 30, 2026.
The car dealer, which specializes in the "buy here, pay here" (integrated auto sales and financing) market, reported total revenue of $1.281 billion, down by 7.9% from fiscal 2025.
Net loss amounted to $139.11 million , versus net income of $17.93 million.
Net loss per share was $16.79, compared to earnings per share of $2.38. Source: America's Car-Mart official press release
In the report, America's Car-Mart confirmed it has consolidated 60 dealership locations in the period of 12 months (from April 30, 2025, to April 30, 2026). The company's active dealership count decreased from 154 to 94, resulting in a 40% footprint reduction.
America's Car-Mart began showing the first signs of trouble more than a year ago. After digging through its official reports, I found that in December 2024, the company's official Q2 FY25 Management Script said it had closed a $300 million term loan that removed the capital-related limits to optimize its store footprint and organization structure.
"Now with more flexibility, we're moving decisively on a multi-phase plan to optimize our footprint, cost structure, and strengthen capital efficiency," stated America's Car-Mart CEO Doug Campbell.
Campbell added that phase one was executed in early November by consolidating five underperforming stores and eliminating approximately 10% of its employees. The second phase was set for Q3 and was projected to result in more than $20 million in annualized SG &A savings.
On Jan. 13, America's Car-Mart confirmed in a press release it has completed phase 2 by consolidating 13 of its locations into higher-performing nearby dealerships. Combined with phase 1, that makes 18 consolidated locations in those two phases.
As of the July 14 earnings release, the company has not yet disclosed the locations of the remaining 42 dealership locations that were consolidated in the fourth quarter of fiscal 2026.
"Faced with limited origination capital and no revolving warehouse facility, we intentionally reduced originations and inventory to protect liquidity and avoided originating loans we lack the capacity to carry," Campbell said during the Q4 and full fiscal 2026 year earnings call .
