I'd say it's the collar, but I don't know about wore out. I think it was made that way. My buddy got it at harbor freight for 60 bucks and it was already like that from the factory. Just some cheap chinese junk. Hell I probably could have done better with my hand drill lol. It got the job done, but I wouldn't recommend buying one. I was looking at a Ryobi last night at home depot that is a lot more solid and has a laser light to line up your drill, but I think I'll take my time and find a good deal on craigslist or ebay.
just my opinion,but if you enjoy machining,get a good one,,look in your local papers for auction sales,oil field has gone to shit again,just as it does every 10 yrs,,thats why i got out of it,,but you could pick up and small lathe and mill cheap right now,mill can do all your drill work too as you know,,and with a lathe,if you know how to do off center work ,you can even drill with lathe,when i got out of it,was when they first came out with horizntal drilling,we made fishing tools that had 4 and sometimes 5 holes all the way threw 4ft long by 8in od parts,,crazy shit,,and doing it stoned wasnt a great idea unless you dont have a problem eating stell coming out a chuck at 350 rpm's hahah,,ya to old for job shop work anymore,but something you never forget ,always a backup plan and trade,i went on to mechanic work ,so machinery and shit like that comes pretty easy,body just cant keep up,lmao started messing with cnc in early 90's wasnt really my bag of tea,,now i wish i would have hung with it,,hardest part is programing,setup and shit,,i never put a single tape in that worked ,days programming then boring ass 3weeks of same part after part,,i enjoyed and considered job shop as art and technic from cutting it off a roll to shipping it out the door it was mine