Tricolor’s Fall and the Subprime Fault Line
Tricolor’s Fall and the Subprime Fault Line
Tricolor Auto’s collapse rattled a narrow corner of the subprime auto world.
A month later, only a few stocks — CarMax and Car-Mart — show lasting damage, while banks barely moved. Markets seem to be testing the edges of credit stress, not yet a full alarm.
Abstract: The September bankruptcy of Tricolor Auto Group, a private subprime auto lender, offered a rare real-time test of investor sentiment toward riskier consumer credit. This note examines how equity markets — from used-car retailers to banks with auto portfolios — responded in the weeks that followed the bankruptcy.
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https://bernsteinbook1958.substack.com/4d9daaf9I.
Introduction
The September 2025 bankruptcy of Tricolor Auto Group, a private subprime auto lender, offered a natural experiment for public-market investors.
