Off Lease Only, a used-car retailer that ran six dealerships in Florida and Texas, filed for bankruptcy after shutting down, succumbing to the pandemic-fueled rise in used-car prices and fresh competition from traditional dealers that had jumped into the secondhand market, WSJ Pro Bankruptcy reported. The private company, owned by alternative investment firm Cerberus Capital Management and its founders, closed its operations when its liquidity dried up following deteriorating performance and after online bank Ally Bank tightened the terms and conditions on a credit line that financed the bulk of the company’s inventory, according to court papers filed by Leland Wilson, Off Lease Only’s former chief executive who now serves as an independent contractor for the company. The company started in 2004 and grew to be the biggest used car-dealership in Florida, according to Wilson’s filing. During the COVID-19 pandemic, supply-chain disruptions pushed up vehicle prices and reduced the pool of relatively new used cars available for Off Lease Only. The company’s business model is centered on selling cars that are less than four years old and have been driven less than 40,000 miles, according to the court filing. By the middle of this year, used-car prices remained 40% above the prepandemic level, Wilson also said. Additionally, inflation and high interest rates have reduced customers’ ability to purchase cars, according to the court filing.
