UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
☑
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017March 31, 2024
OR
☐
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to


Commission file number 000-20202
CREDIT ACCEPTANCE CORPORATION
(Exact name of registrant as specified in its charter)
Michigan38-1999511
Michigan
(State or other jurisdiction of incorporation or organization)
38-1999511
(I.R.S. Employer Identification No.)
25505 W. Twelve Mile Road
Southfield,Michigan
48034-8339
(Address of principal executive offices)
48034-8339
(Zip Code)
(248) 353-2700
(Registrant’s telephone number, including area code)
Not Applicable
248-353-2700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former
fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $.01 par valueCACCThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerþ
þ
Accelerated filero
☐
Non-accelerated filero
(Do not check if a smaller reporting company)
☐
Smaller reporting companyo
☐
Emerging growth companyo
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No þ


The number of shares of Common Stock, $0.01$.01 par value, outstanding on OctoberApril 23, 20172024 was 19,310,211.12,110,976.



Table of Contents





TABLE OF CONTENTS


PART I. — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets - As of September 30, 2017March 31, 2024 and December 31, 20162023
1
Consolidated Statements of Income - Three and nine months ended September 30, 2017March 31, 2024 and 20162023
2
Consolidated Statements of Comprehensive Income - Three and nine months ended September 30, 2017March 31, 2024 and 20162023
3
Consolidated Statements of Shareholders’ Equity - Three months ended March 31, 2024 and 2023
4
Consolidated Statements of Cash Flows - NineThree months ended September 30, 2017March 31, 2024 and 20162023
45
Notes to Consolidated Financial Statements
56
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
3542
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
4957
ITEM 4. CONTROLS AND PROCEDURES
4957
PART II. — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
5058
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
59
ITEM 5. OTHER INFORMATION
59
ITEM 6. EXHIBITS
5060
SIGNATURES
5362


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PART I. - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS


CREDIT ACCEPTANCE CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

(Dollars in millions, except per share data)As of
 March 31, 2024December 31, 2023
ASSETS:  
Cash and cash equivalents$8.4 $13.2 
Restricted cash and cash equivalents559.2 457.7 
Restricted securities available for sale99.9 93.2 
Loans receivable10,483.5 10,020.1 
Allowance for credit losses(3,137.9)(3,064.8)
Loans receivable, net7,345.6 6,955.3 
Property and equipment, net44.6 46.5 
Income taxes receivable11.1 4.3 
Other assets28.2 40.0 
Total assets$8,097.0 $7,610.2 
LIABILITIES AND SHAREHOLDERS’ EQUITY:  
Liabilities:  
Accounts payable and accrued liabilities$342.7 $318.8 
Revolving secured lines of credit169.5 79.2 
Secured financing4,444.1 3,990.9 
Senior notes989.6 989.0 
Mortgage note8.3 8.4 
Deferred income taxes, net421.1 389.2 
Income taxes payable69.5 81.0 
Total liabilities6,444.8 5,856.5 
Commitments and Contingencies - See Note 16
Shareholders’ Equity:  
Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued— — 
Common stock, $.01 par value, 80,000,000 shares authorized, 12,220,580 and 12,522,397 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively0.1 0.1 
Paid-in capital303.5 279.0 
Retained earnings1,349.8 1,475.6 
Accumulated other comprehensive loss(1.2)(1.0)
Total shareholders’ equity1,652.2 1,753.7 
Total liabilities and shareholders’ equity$8,097.0 $7,610.2 

(Dollars in millions, except per share data)As of
 September 30, 2017 December 31, 2016
ASSETS:   
Cash and cash equivalents$4.9
 $14.6
Restricted cash and cash equivalents273.6
 224.7
Restricted securities available for sale46.1
 45.3
    
Loans receivable (including $1.4 from affiliates as of December 31, 2016)4,827.6
 4,207.0
Allowance for credit losses(376.2) (320.4)
Loans receivable, net4,451.4
 3,886.6
    
Property and equipment, net20.3
 18.2
Income taxes receivable5.5
 2.3
Other assets25.1
 26.3
Total Assets$4,826.9
 $4,218.0
    
LIABILITIES AND SHAREHOLDERS' EQUITY:   
Liabilities:   
Accounts payable and accrued liabilities$140.5
 $143.9
Revolving secured line of credit130.5
 —
Secured financing2,327.9
 2,062.4
Senior notes542.4
 541.3
Deferred income taxes, net333.6
 273.1
Income taxes payable0.2
 23.6
Total Liabilities3,475.1
 3,044.3
    
Commitments and Contingencies - See Note 15

 

Shareholders' Equity:   
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued—
 —
Common stock, $0.01 par value, 80,000,000 shares authorized, 19,310,226 and 19,877,381 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively0.2
 0.2
Paid-in capital138.4
 131.7
Retained earnings1,213.2
 1,042.0
Accumulated other comprehensive loss—
 (0.2)
Total Shareholders' Equity1,351.8
 1,173.7
Total Liabilities and Shareholders' Equity$4,826.9
 $4,218.0




See accompanying notes to consolidated financial statements.

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CREDIT ACCEPTANCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

(Dollars in millions, except per share data)For the Three Months Ended 
March 31,
 20242023
Revenue:  
Finance charges$469.2 $421.1 
Premiums earned21.9 17.4 
Other income16.9 15.3 
Total revenue508.0 453.8 
Costs and expenses:  
Salaries and wages78.5 77.2 
General and administrative23.7 18.0 
Sales and marketing23.9 22.1 
Total operating expenses126.1 117.3 
Provision for credit losses on forecast changes87.2 44.3 
Provision for credit losses on new Consumer Loan assignments98.8 93.1 
Total provision for credit losses186.0 137.4 
Interest92.5 54.4 
Provision for claims17.0 17.9 
Total costs and expenses421.6 327.0 
Income before provision for income taxes86.4 126.8 
Provision for income taxes22.1 27.3 
Net income$64.3 $99.5 
Net income per share:  
Basic$5.15 $7.62 
Diluted$5.08 $7.61 
Weighted average shares outstanding:  
Basic12,481,139 13,057,617 
Diluted12,646,529 13,073,316 

(Dollars in millions, except per share data)For the Three Months Ended 
 September 30,		 For the Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Revenue:     
  
Finance charges$259.4
 $223.9
 $749.2
 $641.9
Premiums earned10.3
 10.7
 30.9
 32.4
Other income14.2
 12.0
 42.6
 38.7
Total revenue283.9
 246.6
 822.7
 713.0
Costs and expenses:       
Salaries and wages33.7
 32.4
 101.9
 95.2
General and administrative14.2
 11.0
 42.1
 35.7
Sales and marketing14.2
 12.2
 43.7
 37.8
Provision for credit losses25.7
 22.8
 68.0
 62.8
Interest30.5
 25.1
 88.0
 71.5
Provision for claims5.5
 6.6
 17.6
 20.4
Total costs and expenses123.8
 110.1
 361.3
 323.4
Income before provision for income taxes160.1
 136.5
 461.4
 389.6
Provision for income taxes59.4
 50.6
 168.3
 144.4
Net income$100.7
 $85.9
 $293.1
 $245.2
Net income per share:       
Basic$5.19
 $4.22
 $15.01
 $12.02
Diluted$5.19
 $4.21
 $14.99
 $12.01
Weighted average shares outstanding:       
Basic19,407,344
 20,379,557
 19,528,175
 20,398,037
Diluted19,415,545
 20,384,624
 19,547,674
 20,415,981







































See accompanying notes to consolidated financial statements.

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CREDIT ACCEPTANCE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

(In millions)For the Three Months Ended 
March 31,
 20242023
Net income$64.3 $99.5 
Other comprehensive gain (loss), net of tax:  
Unrealized gain (loss) on securities, net of tax(0.2)0.8 
    Other comprehensive gain (loss)(0.2)0.8 
Comprehensive income$64.1 $100.3 





























(In millions)For the Three Months Ended 
 September 30,		 For the Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Net income$100.7
 $85.9
 $293.1
 $245.2
Other comprehensive income (loss), net of tax:       
Unrealized gain (loss) on securities, net of tax—
 (0.1) 0.2
 0.4
    Other comprehensive income (loss)—
 (0.1) 0.2
 0.4
Comprehensive income$100.7
 $85.8
 $293.3
 $245.6


























































See accompanying notes to consolidated financial statements.

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CREDIT ACCEPTANCE CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(UNAUDITED)
(Dollars in millions)For the Three Months Ended March 31, 2024
Common StockPaid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Shareholders’ Equity
Number of SharesAmount
Balance, beginning of period12,522,397 $0.1 $279.0 $1,475.6 $(1.0)$1,753.7 
Net income— — — 64.3 — 64.3 
  Other comprehensive loss— — — — (0.2)(0.2)
Stock-based compensation— — 10.9 — — 10.9 
Repurchase of common stock(351,368)— (1.0)(190.1)— (191.1)
Restricted stock units settled in common stock7,125 — — — — — 
Stock options exercised42,426 — 14.6 — — 14.6 
Balance, end of period12,220,580 $0.1 $303.5 $1,349.8 $(1.2)$1,652.2 
(Dollars in millions)For the Three Months Ended March 31, 2023
Common StockPaid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Shareholders’ Equity
Number of SharesAmount
Balance, beginning of period12,756,885 $0.1 $245.7 $1,381.1 $(2.9)$1,624.0 
Net income— — — 99.5 — 99.5 
Other comprehensive income— — — — 0.8 0.8 
Stock-based compensation— — 9.9 — — 9.9 
Repurchase of common stock(33,035)— (7.6)(7.3)— (14.9)
Restricted stock units settled in common stock100,757 — — — — — 
Stock options exercised12,300 — 4.1 — — 4.1 
Balance, end of period12,836,907 $0.1 $252.1 $1,473.3 $(2.1)$1,723.4 


























See accompanying notes to consolidated financial statements.
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CREDIT ACCEPTANCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In millions)For the Nine Months Ended September 30,(In millions)For the Three Months Ended March 31,
2017 2016 20242023
Cash Flows From Operating Activities:   Cash Flows From Operating Activities:  
Net income$293.1
 $245.2
Adjustments to reconcile cash provided by operating activities:   Adjustments to reconcile cash provided by operating activities:  
Provision for credit losses68.0
 62.8
Depreciation4.7
 4.7
Amortization7.5
 6.8
Loss on retirement of property and equipment0.1
 0.1
Provision for deferred income taxes60.5
 32.0
Stock-based compensation8.3
 5.6
Other
Other
Other
Change in operating assets and liabilities:   Change in operating assets and liabilities:  
Decrease in accounts payable and accrued liabilities(2.8) (0.9)
Decrease (increase) in income taxes receivable(3.2) 4.6
Increase (decrease) in income taxes payable(23.4) 2.0
Increase (decrease) in accounts payable and accrued liabilities
Increase in income taxes receivable
Decrease in income taxes payable
Decrease in other assets1.8
 0.6
Net cash provided by operating activities414.6
 363.5
Cash Flows From Investing Activities:   Cash Flows From Investing Activities:  
Increase in restricted cash and cash equivalents(48.9) (65.4)
Purchases of restricted securities available for sale(28.0) (28.3)
Proceeds from sale of restricted securities available for sale23.0
 25.5
Maturities of restricted securities available for sale4.3
 4.5
Principal collected on Loans receivable1,657.4
 1,493.2
Advances to Dealers(1,467.2) (1,476.4)
Purchases of Consumer Loans(686.7) (589.4)
Accelerated payments of Dealer Holdback(35.5) (43.4)
Payments of Dealer Holdback(100.8) (109.7)
Purchases of property and equipment(6.9) (3.6)
Net cash used in investing activities(689.3) (793.0)
Cash Flows From Financing Activities:   Cash Flows From Financing Activities:  
Borrowings under revolving secured line of credit3,076.7
 1,280.8
Repayments under revolving secured line of credit(2,946.2) (1,253.3)
Borrowings under revolving secured lines of credit
Repayments under revolving secured lines of credit
Proceeds from secured financing1,664.5
 1,433.3
Repayments of secured financing(1,396.8) (1,019.0)
Payments of debt issuance costs
Payments of debt issuance costs
Payments of debt issuance costs(9.1) (6.3)
Repurchase of common stock(123.5) (40.8)
Excess tax benefits from stock-based compensation plans—
 27.2
Other financing activities(0.6) 7.0
Proceeds from stock options exercised
Other
Net cash provided by financing activities265.0
 428.9
Net decrease in cash and cash equivalents(9.7) (0.6)
Cash and cash equivalents, beginning of period14.6
 6.3
Cash and cash equivalents, end of period$4.9
 $5.7
Net increase in cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents and restricted cash and cash equivalents beginning of period
Cash and cash equivalents and restricted cash and cash equivalents end of period
Supplemental Disclosure of Cash Flow Information:   Supplemental Disclosure of Cash Flow Information:  
Cash paid during the period for interest$88.9
 $73.5
Cash paid during the period for income taxes$132.1
 $75.2
Cash paid during the period for income taxes, net of refunds










See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1.           BASIS OF PRESENTATION


The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for interim periods are not necessarily indicative of actual results achieved for full fiscal years. The consolidated balance sheet as of December 31, 20162023 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K for the year ended December 31, 20162023 for Credit Acceptance Corporation (the “Company”, “Credit Acceptance”, “we”, “our” or “us”).


The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.


We have evaluated events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2017March 31, 2024 for items that could potentially be recognized or disclosed in these financial statements. For additional information regarding subsequent events, see Note 16 of theseWe did not identify any items that would require disclosure in or adjustment to the consolidated financial statements.


Reclassification


Certain amounts for prior periods have been reclassified to conform to the current presentation. We have reclassified certain prior period related party transactions to reflect the June 2016 sale of certain affiliated Dealers by our founder, significant shareholder and former Chairman of the Board. For additional information regarding this change, see Note 10 to the consolidated financial statements.

2.           DESCRIPTION OF BUSINESS


Since 1972, Credit Acceptance has offeredWe make vehicle ownership possible by providing innovative financing programssolutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history. Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our financing programs, but who actually end up qualifying for traditional financing.


Without our financing programs, consumers are often unable to purchase vehicles or they purchase unreliable ones. Further, as we report to the three national credit reporting agencies, an important ancillary benefit of our programs is that we provide consumers with an opportunity to improve their lives by improving their credit score and move on to more traditional sources of financing.


We refer to automobile dealers who participate in our programs and who share our commitmentdesire to changing consumers’provide an opportunity to consumers to improve their lives as “Dealers”.“Dealers.” Upon enrollment in our financing programs, the Dealer enters into a Dealer servicing agreement with us that defines the legal relationship between Credit Acceptance and the Dealer. The Dealer servicing agreement assigns the responsibilities for administering, servicing, and collecting the amounts due on retail installment contracts (referred to as “Consumer Loans”) from the Dealers to us. We are an indirect lender from a legal perspective, meaning the Consumer Loan is originated by the Dealer and assigned to us.
Substantially all
The majority of the Consumer Loans assigned to us are made to consumers with impaired or limited credit histories. The following table shows the percentage of Consumer Loans assigned to us with either FICO® scores below 650 or no FICO® scores:
For the Three Months Ended March 31,
Consumer Loan Assignment Volume20242023
Percentage of total unit volume with either FICO® scores below 650 or no FICO® scores
83.3 %84.5 %
  For the Three Months Ended September 30, For the Nine Months Ended September 30,
Consumer Loan Assignment Volume 2017 2016 2017 2016
Percentage of total unit volume with either FICO® scores below 650 or no FICO® scores
 95.2% 95.4% 95.7% 95.9%

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

In recent years, we have expanded our financing programs to consumers with higher credit ratings, which has contributed to the reduction in the percentage of total unit volume with either FICO® scores below 650 or no FICO® scores.

We have two programs: the Portfolio Program and the Purchase Program. Under the Portfolio Program, we advance money to Dealers (referred to as a “Dealer Loan”) in exchange for the right to service the underlying Consumer Loans. Under the Purchase Program, we buy the Consumer Loans from the Dealers (referred to as a “Purchased Loan”) and keep all amounts collected from the consumer. Dealer Loans and Purchased Loans are collectively referred to as “Loans”.“Loans.” The following table shows the percentage of Consumer Loans assigned to us as Dealer Loans and Purchased Loans for each of the last sevenfive quarters:
Unit VolumeDollar Volume (1)
Three Months EndedDealer LoansPurchased LoansDealer LoansPurchased Loans
March 31, 202372.1 %27.9 %68.1 %31.9 %
June 30, 202372.4 %27.6 %68.6 %31.4 %
September 30, 202374.8 %25.2 %71.7 %28.3 %
December 31, 202377.2 %22.8 %75.0 %25.0 %
March 31, 202478.2 %21.8 %76.6 %23.4 %
  Unit Volume Dollar Volume (1)
Three Months Ended Dealer Loans Purchased Loans Dealer Loans Purchased Loans
March 31, 2016 82.4% 17.6% 75.6% 24.4%
June 30, 2016 77.8% 22.2% 69.8% 30.2%
September 30, 2016 76.2% 23.8% 68.5% 31.5%
December 31, 2016 76.9% 23.1% 71.1% 28.9%
March 31, 2017 73.3% 26.7% 67.8% 32.2%
June 30, 2017 72.3% 27.7% 67.9% 32.1%
September 30, 2017 71.9% 28.1% 68.6% 31.4%
(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback (as defined below) and accelerated Dealer Holdback are not included.
(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.


Portfolio Program

As payment for the vehicle, the Dealer generally receives the following:
•a down payment from the consumer;
•a non-recourse cash payment (“advance”) from us; and
•after the advance balance (cash advance and related Dealer Loan fees and costs) has been recovered by us, the cash from payments made on the Consumer Loan, net of certain collection costs and our servicing fee (“Dealer Holdback”).


We record the amount advanced to the Dealer as a Dealer Loan, which is classified within Loans receivable in our consolidated balance sheets. Cash advanced to the Dealer is automatically assigned to the Dealer’s open pool of advances. We generally require Dealers make an election as to group advances into pools of at least 100 Consumer Loans. At the Dealer’s option, a pool containing at least 100how many Consumer Loans can(either 50 or 100) will be assigned to an open pool before it is closed, and subsequent advances are assigned to a new pool. Unless we receive a request from the Dealer to keep a pool open, we automatically close each pool based on the Dealer’s election. All advances within a Dealer’s pool are secured by the future collections on the related Consumer Loans assigned to the pool. For Dealers with more than one pool, the pools are cross-collateralized so the performance of other pools is considered in determining eligibility for Dealer Holdback. We perfect our security interest inwith respect to the Dealer Loans by obtaining control or taking possession of the Consumer Loans, which list us as lien holder on the vehicle title.


The Dealer servicing agreement provides that collections received by us during a calendar month on Consumer Loans assigned by a Dealer are applied on a pool-by-pool basis as follows:
•first, to reimburse us for certain collection costs;
•second, to pay us our servicing fee, which generally equals 20% of collections;
•third, to reduce the aggregate advance balance and to pay any other amounts due from the Dealer to us; and
•fourth, to the Dealer as payment of Dealer Holdback.


If the collections on Consumer Loans from a Dealer’s pool are not sufficient to repay the advance balance and any other amounts due to us, the Dealer will not receive Dealer Holdback. Certain events may also result in Dealers forfeiting their rights to Dealer Holdback, including becoming inactive before assigning 100 Consumer Loans.


Dealers have an opportunity to receive an accelerated Dealer Holdback payment each time 100a pool of Consumer Loans have been assigned to us.is closed. The amount paid to the Dealer is calculated using a formula that considers the number of Consumer Loans assigned to the pool and the related forecasted collections and the advance balance on the related Consumer Loans.balance.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
Since typically the combination of the advance and the consumer’s down payment provides the Dealer with a cash profit at the time of sale, the Dealer’s risk in the Consumer Loan is limited. We cannot demand repayment of the advance from the Dealer except in the event the Dealer is in default of the Dealer servicing agreement. Advances are made only after the consumer and Dealer have signed a Consumer Loan contract, we have received the executed Consumer Loan contract and supporting documentation in either physical or electronic form, and we have approved all of the related stipulations for funding. The Dealer can also opt to repurchase Consumer Loans that have been assigned to us under the Portfolio Program, at their discretion, for a fee.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

For accounting purposes, the transactions described under the Portfolio Program are not considered to be loans to consumers. Instead, our accounting reflects that of a lender to the Dealer. The classification as a Dealer Loan for accounting purposes is primarily a result of (1) the Dealer’s financial interest in the Consumer Loan and (2) certain elements of our legal relationship with the Dealer.


Purchase Program


The Purchase Program differs from our Portfolio Program in that the Dealer receives a one-time payment from us at the time of assignment to purchase the Consumer Loan instead of a cash advance at the time of assignment and future Dealer Holdback payments. For accounting purposes, the transactions described under the Purchase Program are considered to be originated by the Dealer and then purchased by us.


Program Enrollment


Dealers may enroll inare granted access to our Portfolio Program by (1) paying an up-front, one-time fee of $9,850, or (2) agreeing to allow us to retain 50% of their first accelerated Dealer Holdback payment.upon enrollment. Access to the Purchase Program is typically only granted to Dealers that meet one of the following:


received first accelerated Dealer Holdback payment•assigned at least 50 Consumer Loans under the Portfolio Program;
•franchise dealership; or
•independent dealership that meets certain criteria upon enrollment.


Seasonality

Our business is seasonal with peak Consumer Loan assignments and collections occurring during the first quarter of the year.  This seasonality has a material impact on our interim results, as we are required to recognize a significant provision for credit losses expense at the time of assignment. For additional information, see Note 3.

3.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Business Segment Information


We currently operate in one reportable segment which represents our core business of offering innovative financing programssolutions that enable Dealersautomobile dealers to sell vehicles to consumers regardless of their credit history. The consolidated financial statements reflect the financial results of our one reportable operating segment.


Cash and Cash Equivalents and Restricted Cash and Cash Equivalents


Cash equivalents consist of readily marketable securities with original maturities at the date of acquisition of three months or less. As of September 30, 2017March 31, 2024 and December 31, 2016,2023, we had $4.6$8.1 million and $14.3$12.8 million, respectively, in cash and cash equivalents that were not insured by the Federal Deposit Insurance Corporation (“FDIC”).

Restricted Cash and Cash Equivalents


Restricted cash and cash equivalents consist of cash pledged as collateral for secured financings and cash held in a trust for future vehicle service contract claims. As of September 30, 2017March 31, 2024 and December 31, 2016,2023, we had $273.1$554.7 million and $224.1$453.7 million, respectively, in restricted cash and cash equivalents that were not insured by the FDIC.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents reported in our consolidated balance sheets to the total shown in our consolidated statements of cash flows:
(In millions)As of
 March 31, 2024December 31, 2023March 31, 2023December 31, 2022
Cash and cash equivalents$8.4 $13.2 $8.1 $7.7 
Restricted cash and cash equivalents559.2 457.7 480.0 410.0 
Total cash and cash equivalents and restricted cash and cash equivalents$567.6 $470.9 $488.1 $417.7 

Restricted Securities Available for Sale


Restricted securities available for sale consist of amounts held in a trust for future vehicle service contract claims. We determine the appropriate classification of our investments in debt securities at the time of purchase and reevaluate such determinations at each balance sheet date. Debt securities for which we do not have the intent or ability to hold to maturity are classified as available for sale, and stated at fair value with unrealized gains and losses, net of income taxes included in the determination of comprehensive income and reported as a component of shareholders’ equity.


Loans Receivable and Allowance for Credit Losses


Consumer Loan Assignment. For legal purposes, a Consumer Loan is considered to have been assigned to us after the following has occurred:

•the consumer and Dealer have signed a Consumer Loan contract; and
•we have received the executed Consumer Loan contract and supporting documentation in either physical or electronic form.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)


For accounting and financial reporting purposes, a Consumer Loan is considered to have been assigned to us after the following has occurred:

•the Consumer Loan has been legally assigned to us; and
•we have made a funding decision and generally have provided funding to the Dealer in the form of either an advance under the Portfolio Program or one-time purchase payment under the Purchase Program.


Portfolio Segments and Classes. We are considered to be a lender to our Dealers for Consumer Loans assigned under our Portfolio Program and a purchaser of Consumer Loans assigned under our Purchase Program. As a result, ourOur Loan portfolio consists of two portfolio segments: Dealer Loans and Purchased Loans. Our determination is based on the following:
•We have two financing programs: the Portfolio Program and the Purchase Program. We are considered to be a lender to Dealers for Consumer Loans assigned under the Portfolio Program and a purchaser of Consumer Loans assigned under the Purchase Program.
•The Portfolio Program and the Purchase Program have different levels of risk in relation to credit losses. Under the Portfolio Program, the impact of negative variances in Consumer Loan performance is mitigated by Dealer Holdback and the cross-collateralization of Consumer Loan assignments. Under the Purchase Program, we are impacted by the full amount of negative variances in Consumer Loan performance.
•Our business model is narrowly focused on Consumer Loan assignments from one industry with expected cash flows that are significantly lower than the contractual cash flows owed to us due to credit quality. We do not believe that it is meaningful to disaggregate our Loan portfolio beyond the Dealer Loans and Purchased Loans portfolio segments.

Each portfolio segment is comprisedconsists of one class of Consumer Loan assignments, which is Consumer Loans originated by Dealers to finance purchases of vehicles and related ancillary products by consumers with impaired or limited credit histories. Our determination is based on the following:

•All of the Consumer Loans assigned to us have similar risk characteristics in relation to the categorization of borrowers, type of financing receivable, industry sector, and type of collateral.
•We only accept Consumer Loan assignments from Dealers located within the United States.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
Recognition and Measurement Policies. On January 1, 2020, we adopted Accounting Standards Update 2016-13, Measurement of Credit Losses on Financial Instruments, which is known as the current expected credit loss model, or CECL. Loans outstanding prior to the adoption date qualified for transition relief and are accounted for as purchased financial assets with credit deterioration (“PCD Method”).

Under the PCD Method, for each reporting period subsequent to the adoption of CECL, we:
•recognize finance charge revenue using the effective interest rate that was calculated on the adoption date based on expected future net cash flows; and
•adjust the allowance for credit losses so that the net carrying amount of each Loan equals the present value of expected future net cash flows discounted at the effective interest rate. The adjustment to the allowance for credit losses is recognized as either provision for credit losses expense or a reversal of provision for credit losses expense.

Consumer Loans assigned to us on or subsequent to January 1, 2020 do not qualify for the PCD Method and are accounted for as originated financial assets (“Originated Method”). While the cash flows we expect to collect at the time of assignment are significantly lower than the contractual cash flows owed to us due to credit quality, our Loans do not qualify for the PCD Method because the assignment of the Consumer Loan to us occurs a moment after the Consumer Loan is originated by the Dealer, so “a more-than-insignificant deterioration in credit quality since origination” has not occurred at the time of assignment. In addition, Dealer Loans also do not qualify for the PCD Method because Consumer Loans assigned to us under the Portfolio Program are considered to be advances under Dealer Loans originated by us rather than Consumer Loans purchased by us.

Under the Originated Method, at the time of assignment, we:
•calculate the effective interest rate based on contractual future net cash flows;
•record a Loan receivable equal to the advance paid to the Dealer under the Portfolio Program or purchase price paid to the Dealer under the Purchase Program; and
•record an allowance for credit losses equal to the difference between the initial Loan receivable balance and the present value of expected future net cash flows discounted at the effective interest rate. The initial allowance for credit losses is recognized as provision for credit losses expense.

The effective interest rate and initial allowance for credit losses are significantly higher for Consumer Loans assigned under the Purchase Program than for Consumer Loans assigned under the Portfolio Program, as contractual net cash flows exceed expected net cash flows by a significantly greater margin under the Purchase Program. Under the Purchase Program, we retain all contractual collections that exceed our initial expectations. Under the Portfolio Program, contractual collections that exceed our initial expectations are substantially offset by additional Dealer Holdback payments.

Under the Originated Method, for each reporting period subsequent to assignment, we:
•recognize finance charge revenue using the effective interest rate that was calculated at the time of assignment based on contractual future net cash flows; and
•adjust the allowance for credit losses so that the net carrying amount of each Loan equals the present value of expected future net cash flows discounted at the effective interest rate. The adjustment to the allowance for credit losses is recognized as either provision for credit losses expense or a reversal of provision for credit losses expense.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
Loans Receivable. Amounts advanced to Dealers for Consumer Loans assigned under the Portfolio Program are recorded as Dealer Loans and are aggregated by Dealer for purposes of recognizing revenue and evaluating impairment. We accountmeasuring credit losses. Amounts paid to Dealers for DealerConsumer Loans assigned under the Purchase Program are recorded as Purchased Loans and, for purposes of recognizing revenue and measuring credit losses, are:
•not aggregated, if assigned on or subsequent to January 1, 2020; or
•aggregated into pools based on forecasted cash flows insteadthe month of contractual cash flows as we do not expectpurchase, if assigned prior to collect all of the contractually specified amounts due to the credit quality of the underlying Consumer Loans. January 1, 2020.

The outstanding balance of each Dealer Loan included in Loans receivable is comprised of the following:

•cash paid to the Dealer (or to third-party ancillary product providers on the Dealer’s behalf) for the Consumer Loan assignment (advance under the Portfolio Program or one-time purchase payment under the Purchase Program);
the aggregate amount of all cash advances paid;
•finance charges;
•Dealer Holdback payments;
•accelerated Dealer Holdback payments; and
recoveries.•recoveries;

•transfers in;
Less:
•less: collections (net of certain collection costs);
•less: write-offs; and
write-offs.•less: transfers out.


AnUnder our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance and the related allowance for credit losses is maintained at anbalance to Purchased Loans in the period this forfeiture occurs. We aggregate these Purchased Loans by Dealer for purposes of recognizing revenue and measuring credit losses.

Allowance for Credit Losses. The outstanding balance of the allowance for credit losses of each Loan represents the amount that reduces therequired to reduce net asset value (Dealer Loan balancecarrying amount of Loans (Loans receivable less the allowance)allowance for credit losses) to the present value of forecastedexpected future net cash flows discounted at the yield established at the time of assignment.  This allowance calculation is completedeffective interest rate. Expected future net cash flows for each individual Dealer. Future cash flowsDealer Loans are comprised of estimatedexpected future collections on the assigned Consumer Loans, less any estimatedexpected future Dealer Holdback payments. We write off Dealer Loans once there are no forecastedExpected future net cash flows on anyfor Purchased Loans are comprised of the associated Consumer Loans, which generally occurs 120 months after the last Consumer Loan assignment.

Futureexpected future collections on Dealer Loansthe assigned Consumer Loans.

Expected future collections are forecasted for each individual DealerConsumer Loan based on the historical performance of Consumer Loans with similar characteristics, adjusted for recent trends in payment patterns. Our forecast of expected future collections includes estimates for prepayments and post-contractual-term cash flows. Unless the consumer is no longer contractually obligated to pay us, we forecast future collections on each Consumer Loan for a 120 month period after the origination date. Expected future Dealer Holdback ispayments are forecasted for each individual Dealer based on the expected future collections and current advance balance of each Dealer Loan. Cash flows from any individual Dealer Loan are often different than estimated cash flows at the time of assignment. If such difference is favorable, the difference is recognized prospectively into income over the remaining life of the Dealer Loan through a yield adjustment. If such difference is unfavorable, a provision for credit losses is recorded immediately as a current period expense and a corresponding allowance for credit losses is established. Because differences between estimated cash flows at the time of assignment and actual cash flows occur often, an allowance is required for a significant portion of our Dealer Loan portfolio. An allowance for credit losses does not necessarily indicate that a Dealer Loan is unprofitable, and seldom are cash flows from a Dealer Loan insufficient to repay the initial amounts advanced to the Dealer.

Purchased Loans.  Amounts paid to Dealers for Consumer Loans assigned under the Purchase Program are recorded as Purchased Loans and are aggregated into pools based on the month of purchase for purposes of recognizing revenue and evaluating impairment. We account for Purchased Loans based on forecasted cash flows instead of contractual cash flows as we do not expect to collect all of the contractually specified amounts due to the credit quality of the assigned Consumer Loans. The outstanding balance of each Purchased Loan pool included in Loans receivable is comprised of the following:

the aggregate amount of all amounts paid during the month of purchase to purchase Consumer Loans from Dealers;
finance charges; and
recoveries.
Less:
collections (net of certain collection costs); and
write-offs.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

AnWe fully write off the outstanding balances of a Loan and the related allowance for credit losses is maintained at an amount that reduces the net asset value (Purchased Loan pool balance less the allowance) to the value of forecasted future cash flows discounted at the yield established at the time of assignment. This allowance calculation is completed for each individual monthly pool of Purchased Loans. Future cash flows are comprised of estimated future collections on the pool of Purchased Loans. We write off pools of Purchased Loans once therewe are no forecastedlonger forecasting any expected future net cash flows on anythe Loan. Under our partial write-off policy, we write off the amount of the Purchased Loans included inoutstanding balances of a Loan and the pool, which generally occurs 120 months after the month of purchase.

Future collections on Purchased Loans are forecasted for each individual pool based on the historical performance of Consumer Loans with similar characteristics, adjusted for recent trends in payment patterns. Cash flows from any individual pool of Purchased Loans are often different than estimated cash flows at the time of assignment. If such difference is favorable, the difference is recognized prospectively into income over the remaining life of the pool of Purchased Loans through a yield adjustment. If such difference is unfavorable, a provision for credit losses is recorded immediately as a current period expense and a correspondingrelated allowance for credit losses, is established.if any, that exceeds 200% of the present value of expected future net cash flows on the Loan, as we deem this amount to be uncollectable.


Credit Quality. Substantially allThe vast majority of the Consumer Loans assigned to us are made to individuals with impaired or limited credit histories or higher debt-to-income ratios than are permitted by traditional lenders.histories. Consumer Loans made to these individuals generally entail a higher risk of delinquency, default, and repossession and higher losses than loans made to consumers with better credit. Since most of our revenue and cash flows are generated from these Consumer Loans, our ability to accurately forecast Consumer Loan performance is critical to our business and financial results. At the time thea Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan. Based on these forecasts, an advance or one-time purchase payment is made to the related Dealer at a price designed to maximize our economic profit, a non-GAAP financial measure that considers our return on capital, our cost of capital, and the amount of capital invested.


We monitor and evaluate the credit quality of Consumer Loans on a monthly basis by comparing our current forecasted collection rates to our initial expectations. We use a statistical model that considers a number of credit quality indicators to estimate the expected collection rate for each Consumer Loan at the time of assignment. The credit quality indicators considered in our model include attributes contained in the consumer’s credit bureau report, data contained in the consumer’s credit application, the structure of the proposed transaction, vehicle information and other factors. We continue to evaluate the expected collection rate offor each Consumer Loan subsequent to assignment primarily through the monitoring of consumer payment behavior. Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast. Since all known, significant credit quality indicators have already been factored into our forecasts and pricing, we are not able to use any specific credit quality indicators to predict or explain variances in actual performance from our initial expectations. Any variances in performance from our initial expectations are thea result of Consumer Loans performing differently thanfrom historical Consumer Loans with similar characteristics. We periodically adjust our statistical pricing model for new trends that we identify through our evaluation of these forecasted collection rate variances.


When overall forecasted collection rates underperform our initial expectations, the decline in forecasted collections has a more adverse impact on the profitability of the Purchased Loans than on the profitability of the Dealer Loans. For Purchased Loans, the decline in forecasted collections is absorbed entirely by us. For Dealer Loans, the decline in the forecasted collections is substantially offset by a decline in forecasted payments of Dealer Holdback.


Methodology Changes. For the three and nine months ended September 30, 2017March 31, 2024 and 2016,2023, we did not make any methodology changes for Loans that had a material impact on our financial statements.



Finance Charges

Sources of Revenue. Finance charges is comprised of: (1) interest income earned on Loans; (2) administrative fees earned from ancillary products; (3) program fees charged to Dealers under the Portfolio Program; (4) Consumer Loan assignment fees charged to Dealers; and (5) direct origination costs incurred on Dealer Loans.

We provide Dealers the ability to offer vehicle service contracts to consumers through our relationships with Third-Party Providers (“TPPs”). A vehicle service contract provides the consumer protection by paying for the repair or replacement of certain components of the vehicle in the event of a mechanical failure. The retail price of the vehicle service contract is included in the principal balance of the Consumer Loan. The wholesale cost of the vehicle service contract is paid to the TPP, net of an administrative fee retained by us. The difference between the wholesale cost and the retail price to the consumer is paid to the Dealer as a commission. Under the Portfolio Program, the wholesale cost of the vehicle service contract and the commission paid to the Dealer are charged to the Dealer’s advance balance. TPPs process claims on vehicle service contracts that are underwritten by third-party insurers. We bear the risk of loss for claims on certain vehicle service contracts that are reinsured by us. We market the vehicle service contracts directly to Dealers.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

We provide Dealers the ability to offer Guaranteed Asset Protection (“GAP”) to consumers through our relationships with TPPs. GAP provides the consumer protection by paying the difference between the loan balance and the amount covered by the consumer’s insurance policy in the event of a total loss of the vehicle due to severe damage or theft. The retail price of GAP is included in the principal balance of the Consumer Loan. The wholesale cost of GAP is paid to the TPP, net of an administrative fee retained by us. The difference between the wholesale cost and the retail price to the consumer is paid to the Dealer as a commission. Under the Portfolio Program, the wholesale cost of GAP and the commission paid to the Dealer are charged to the Dealer’s advance balance. TPPs process claims on GAP contracts that are underwritten by third-party insurers.

Program fees represent monthly fees charged to Dealers for access to our Credit Approval Processing System (“CAPS”); administration, servicing, and collection services offered by us; documentation related to or affecting our program; and all tangible and intangible property owned by Credit Acceptance. We charge a monthly fee of $599 to Dealers participating in our Portfolio Program and we collect it from future Dealer Holdback payments. 

Recognition Policy. We recognize finance charges under the interest method such that revenue is recognized on a level-yield basis over the life of the Loan. We calculate finance charges on a monthly basis by applying the effective interest rate of the Loan to the net carrying amount of the Loan (Loan receivable less the related allowance for credit losses). For Consumer Loans assigned on or subsequent to January 1, 2020, the effective interest rate is based on contractual future net cash flows. For Consumer Loans assigned prior to January 1, 2020, the effective interest rate was determined based on expected future net cash flows.

We report the change in the present value of credit losses attributable to the passage of time as a reduction to finance charges. Accordingly, we allocate finance charges recognized on each Loan between the Loan receivable and the related allowance for credit losses. The amount of finance charges allocated to the Loan receivable is equal to the effective interest rate applied to the Loans receivable balance. The reduction of finance charges allocated to the allowance for credit losses is equal to the effective interest rate applied to the allowance for credit losses balance.

Reinsurance


Our wholly owned subsidiary VSC Re Company (“VSC Re”), our wholly-owned subsidiary, is engaged in the business of reinsuring coverage under vehicle service contracts sold to consumers by Dealers on vehicles financed by us. VSC Re currently reinsures vehicle service contracts that are offered through one of our third party providers.TPPs. Vehicle service contract premiums, which represent the selling price of the vehicle service contract to the consumer, less fees and certain administrative costs, are contributed to a trust account controlled by VSC Re. These premiums are used to fund claims covered under the vehicle service contracts. VSC Re is a bankruptcy remote entity. As such, our exposure to fund claims is limited to the trust assets controlled by VSC Re and our net investment in VSC Re.


Premiums from the reinsurance of vehicle service contracts are recognized over the life of the policy in proportion to expected costs of servicing those contracts. Expected costs are determined based on our historical claims experience. Claims are expensed through a provision for claims in the period the claim was incurred. Capitalized acquisition costs are comprised of premium taxes and are amortized as general and administrative expense over the life of the contracts in proportion to premiums earned.


We have consolidated the trust within our financial statements based on our determination of the following:

•We have a variable interest in the trust. We have a residual interest in the assets of the trust, which is variable in nature, given that it increases or decreases based upon the actual loss experience of the related service contracts. In addition, VSC Re is required to absorb any losses in excess of the trust'strust’s assets.
•The trust is a variable interest entity. The trust has insufficient equity at risk as no parties to the trust were required to contribute assets that provide them with any ownership interest.
•We are the primary beneficiary of the trust. We control the amount of premiumpremiums written and placed in the trust through Consumer Loan assignments under our Programs, which is the activity that most significantly impacts the economic performance of the trust. We have the right to receive benefits from the trust that could potentially be significant. In addition, VSC Re has the obligation to absorb losses of the trust that could potentially be significant.


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New Accounting Updates Adopted During the Current Year

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
Improvements to Employee Share-Based Payment Accounting. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, which simplifies the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods, beginning after December 15, 2016, with early adoption permitted. The adoption of ASU 2016-09 on January 1, 2017 changed where we recognize excess tax benefits and deficiencies from stock-based compensation plans in our consolidated financial statements on a prospective basis. We receive a tax deduction upon the vesting of restricted stock and the conversion of restricted stock units to common stock based on the fair value of the shares. The amount that this tax deduction differs from the grant-date fair value that was recognized as stock-based compensation expense is referred to as an excess tax benefit or deficiency. For periods prior to adoption, these excess tax benefits or deficiencies were recognized in paid-in capital in our consolidated balance sheets and reported as a financing activity in our consolidated statements of cash flows. Upon adoption, these excess tax benefits or deficiencies are recognized in provision for income taxes in our consolidated statements of income and reported as an operating activity in our consolidated statements of cash flows. As a result of the adoption, excess tax benefits of $2.5 million decreased our provision for income taxes, increased our net cash provided by operating activities and decreased our net cash provided by financing activities for the nine months ended September 30, 2017.(UNAUDITED)

New Accounting Updates Not Yet Adopted


Restricted Cash. Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification (the “Codification”). The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If, by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. We are currently evaluating the impact the adoption of ASU 2023-06 will have on our consolidated financial statements and related disclosures.

Improvements to Reportable Segment Disclosures. In November 2016,2023, the FASB issued ASU 2016-18,2023-07, which amends Topic 230 (Statement of Cash Flows)enhances the required disclosures for operating segments in our annual and requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents.interim consolidated financial statements. ASU 2016-18 is intended to reduce diversity in practice in how restricted cash or restricted cash equivalents are presented and classified in the statement of cash flows. ASU 2016-182023-07 is effective on a retrospective basis for fiscal years,annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2017, with early2024. Early adoption permitted. The standard requires application using a retrospective transition method. Theis permitted but we have not yet adopted ASU 2023-07. We are currently evaluating the impact the adoption of ASU 2016-182023-07 will have on January 1, 2018 will change the presentation and classification of restricted cash and restricted cash equivalents in our consolidated financial statements and related disclosures.

Improvements to Income Tax Disclosures. In December 2023, the FASB issued ASU 2023-09, which intends to improve the transparency of cash flows.


income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments intended to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted, but we have not yet adopted ASU 2023-09. We are currently evaluating the impact the adoption of ASU 2023-09 will have on our consolidated financial statements and related disclosures.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued ASU 2016-13, which includes an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. ASU 2016-13 is effective for fiscal years, and interim periods, beginning after December 15, 2019. Early application is permitted for fiscal years, and interim periods, beginning after December 15, 2018. While we continue to assess the impact of ASU 2016-13, based on our preliminary assessment, we believe the adoption will have a material impact on our consolidated financial statements and related disclosures.

Revenue from Contracts with Customers. In May 2014, the FASB issued ASU 2014-09, which supersedes the revenue recognition requirements Topic 605 (Revenue Recognition), and most industry-specific guidance. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). In August 2015, the FASB issued ASU 2015-14 to defer the effective date of ASU 2014-09 by one year to fiscal years beginning after December 15, 2017. ASU 2015-14 also permits early adoption of ASU 2014-09, but not before the original effective date, which was for fiscal years beginning after December 15, 2016. We plan on adopting ASU 2014-09, as amended by ASU 2015-14, on January 1, 2018 using the modified retrospective method and do not believe the adoption will have a material impact on our consolidated financial statements and related disclosures. Given that the guidance is not applicable to our finance charges and premiums earned sources of revenue, our assessment has focused on our other income source of revenue. Based on our assessment completed to date, we do not expect the adoption of ASU 2014-09, as amended by ASU 2015-14, to have a material impact on the timing of revenue recognition and financial statement presentation of our other income source of revenue.

Leases. In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize a right-of-use asset and related lease liability for leases classified as operating leases at the commencement date that have lease terms of more than 12 months. This ASU retains the classification distinction between finance leases and operating leases. ASU 2016-02 is effective for fiscal years, and interim periods, beginning after December 15, 2018. Early application is permitted, but we have not yet adopted ASU 2016-02. We are currently assessing the impact the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures.

4.           FAIR VALUE OF FINANCIAL INSTRUMENTS


The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate their value.

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents.  Equivalents. The carrying amounts approximate their fair value due to the short maturity of these instruments.


Restricted Securities Available for Sale.The fair value of U.S. Government and agency securities, and corporate bonds, and municipal securities is based on quoted market values in active markets. For asset-backed securities, and mortgage-backed securities, and commercial paper, we use model-based valuation techniques for which all significant assumptions are observable in the market.


Loans Receivable, net. The fair value is determined by calculating the present value of expected future net cash flows estimated by us by utilizing athe discount rate comparable with the rate used to calculate the value of our allowance for credit losses.Loans under our non-GAAP floating yield methodology.


Revolving Secured LineLines of Credit.The fair value is determined by calculating the present value of the debt instrument based on current rates for debt with a similar risk profile and maturity.


Secured Financing.The fair value of ourcertain asset-backed secured financings ("(“Term ABS")ABS” financings) is determined using quoted market prices; however, these instruments tradeprices in a market with a low trading volume.an active market. For our warehouse facilities and certain other Term ABS financings, the fair values are determined by calculating the present value of each debt instrument based on current rates for debt with similar risk profiles and maturities.


Senior Notes.The fair value is determined using quoted market prices in an active market.



Mortgage Note. The fair value is determined by calculating the present value of the debt instrument based on current rates for debt with a similar risk profile and maturity.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)


A comparison of the carrying valueamount and estimated fair value of these financial instruments is as follows:

(In millions)As of March 31, 2024As of December 31, 2023
 Carrying
Amount		Estimated Fair
Value		Carrying
Amount		Estimated Fair
Value
Assets    
Cash and cash equivalents$8.4 $8.4 $13.2 $13.2 
Restricted cash and cash equivalents559.2 559.2 457.7 457.7 
Restricted securities available for sale99.9 99.9 93.2 93.2 
Loans receivable, net7,345.6 8,215.3 6,955.3 7,759.1 
Liabilities    
Revolving secured lines of credit$169.5 $169.5 $79.2 $79.2 
Secured financing4,444.1 4,304.6 3,990.9 4,025.9 
Senior notes989.6 1,045.8 989.0 1,039.8 
Mortgage note8.3 8.3 8.4 8.4 
15
(In millions)       
 As of September 30, 2017 As of December 31, 2016
 
Carrying
Amount
 
Estimated Fair
Value
 
Carrying
Amount
 
Estimated Fair
Value
Assets       
Cash and cash equivalents$4.9
 $4.9
 $14.6
 $14.6
Restricted cash and cash equivalents273.6
 273.6
 224.7
 224.7
Restricted securities available for sale46.1
 46.1
 45.3
 45.3
Loans receivable, net4,451.4
 4,536.9
 3,886.6
 3,955.9
Liabilities       
Revolving secured line of credit$130.5
 $130.5
 $—
 $—
Secured financing2,327.9
 2,348.5
 2,062.4
 2,072.0
Senior notes542.4
 569.0
 541.3
 560.5

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We group assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates or assumptions that market participants would use in pricing the asset or liability.


12

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)


The following table provides the level of measurement used to determine the fair value for each of our financial instruments:instruments measured or disclosed at fair value:

(In millions)As of March 31, 2024
 Level 1Level 2Level 3Total Fair Value
Assets   
Cash and cash equivalents (1)$8.4 $— $— $8.4 
Restricted cash and cash equivalents (1)559.2 — — 559.2 
Restricted securities available for sale (2)79.1 20.8 — 99.9 
Loans receivable, net (1)— — 8,215.3 8,215.3 
Liabilities    
Revolving secured lines of credit (1)$— $169.5 $— $169.5 
Secured financing (1)3,444.5 860.1 — 4,304.6 
Senior notes (1)1,045.8 — — 1,045.8 
Mortgage note (1)— 8.3 — 8.3 
(In millions)As of December 31, 2023
 Level 1Level 2Level 3Total Fair Value
Assets    
Cash and cash equivalents (1)$13.2 $— $— $13.2 
Restricted cash and cash equivalents (1)457.7 — — 457.7 
Restricted securities available for sale (2)75.1 18.1 — 93.2 
Loans receivable, net (1)— — 7,759.1 7,759.1 
Liabilities    
Revolving secured lines of credit (1)$— $79.2 $— $79.2 
Secured financing (1)3,225.8 800.1 — 4,025.9 
Senior notes (1)1,039.8 — — 1,039.8 
Mortgage note (1)— 8.4 — 8.4 

(1)Measured at amortized cost with fair value disclosed.
(2)Measured at fair value on a recurring basis.


16

(In millions)       
 As of September 30, 2017
 Level 1 Level 2 Level 3 Total Fair Value
Assets       
Cash and cash equivalents$4.9
 $—
 $—
 $4.9
Restricted cash and cash equivalents273.6
 —
 —
 273.6
Restricted securities available for sale (1)36.9
 9.2
 —
 46.1
Loans receivable, net—
 —
 4,536.9
 4,536.9
Liabilities 
  
  
  
Revolving secured line of credit$130.5
 $—
 $—
 $130.5
Secured financing—
 2,348.5
 —
 2,348.5
Senior notes569.0
 —
 —
 569.0
(In millions)       
 As of December 31, 2016
 Level 1 Level 2 Level 3 Total Fair Value
Assets       
Cash and cash equivalents$14.6
 $—
 $—
 $14.6
Restricted cash and cash equivalents224.7
 —
 —
 224.7
Restricted securities available for sale (1)37.1
 8.2
 —
 45.3
Loans receivable, net—
 —
 3,955.9
 3,955.9
Liabilities 
  
  
  
Revolving secured line of credit$—
 $—
 $—
 $—
Secured financing—
 2,072.0
 —
 2,072.0
Senior notes560.5
 —
 —
 560.5

(1)Measured and recorded at fair value on a recurring basis.


13

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

5.           RESTRICTED SECURITIES AVAILABLE FOR SALE


Restricted securities available for sale consist of the following:
(In millions)As of March 31, 2024
 Amortized CostGross Unrealized
Gains		Gross Unrealized
Losses		Estimated Fair
Value
Corporate bonds$44.7 $— $(0.7)$44.0 
U.S. Government and agency securities35.1 — (0.8)34.3 
Asset-backed securities20.8 0.1 (0.2)20.7 
Municipal securities0.8 — — 0.8 
Mortgage-backed securities0.1 — — 0.1 
Total restricted securities available for sale$101.5 $0.1 $(1.7)$99.9 
(In millions)As of December 31, 2023
 Amortized CostGross Unrealized
Gains		Gross Unrealized
Losses		Estimated Fair
Value
Corporate bonds$40.5 $0.3 $(0.9)$39.9 
U.S. Government and agency securities35.2 0.2 (0.9)34.5 
Asset-backed securities18.0 0.1 (0.2)17.9 
Municipal securities0.7 — — 0.7 
Mortgage-backed securities0.2 — — 0.2 
Total restricted securities available for sale$94.6 $0.6 $(2.0)$93.2 
(In millions)As of September 30, 2017
 Cost 
Gross Unrealized
Gains
 
Gross Unrealized
Losses
 
Estimated Fair
Value
U.S. Government and agency securities$18.7
 $—
 $(0.1) $18.6
Corporate bonds18.2
 0.1
 —
 18.3
Asset-backed securities6.9
 —
 —
 6.9
Mortgage-backed securities2.3
 —
 —
 2.3
Total restricted securities available for sale$46.1
 $0.1
 $(0.1) $46.1
        
(In millions)As of December 31, 2016
 Cost 
Gross Unrealized
Gains
 
Gross Unrealized
Losses
 
Estimated Fair
Value
U.S. Government and agency securities$20.4
 $—
 $(0.1) $20.3
Corporate bonds16.9
 0.1
 (0.2) 16.8
Asset-backed securities5.0
 —
 —
 5.0
Mortgage-backed securities3.2
 —
 —
 3.2
Total restricted securities available for sale$45.5
��$0.1
 $(0.3) $45.3


14

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)


The fair value and gross unrealized losses for restricted securities available for sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:
(In millions)Securities Available for Sale with Gross Unrealized Losses as of March 31, 2024
 Less than 12 Months12 Months or More  
 Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Total
Estimated
Fair Value		Total
Gross
Unrealized
Losses
Corporate bonds$12.0 $(0.1)$13.8 $(0.6)$25.8 $(0.7)
U.S. Government and agency securities13.2 (0.1)13.5 (0.7)26.7 (0.8)
Asset-backed securities8.1 — 6.7 (0.2)14.8 (0.2)
Mortgage-backed securities— — 0.1 — 0.1 — 
Total restricted securities available for sale$33.3 $(0.2)$34.1 $(1.5)$67.4 $(1.7)

(In millions)Securities Available for Sale with Gross Unrealized Losses as of December 31, 2023
 Less than 12 Months12 Months or More  
 Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Total
Estimated
Fair Value		Total
Gross
Unrealized
Losses
Corporate bonds$2.7 $— $18.4 $(0.9)$21.1 $(0.9)
U.S. Government and agency securities6.8 (0.1)16.4 (0.8)23.2 (0.9)
Asset-backed securities1.6 — 7.3 (0.2)8.9 (0.2)
Mortgage-backed securities— — 0.2 — 0.2 — 
Total restricted securities available for sale$11.1 $(0.1)$42.3 $(1.9)$53.4 $(2.0)
17

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
(In millions)Securities Available for Sale with Gross Unrealized Losses as of September 30, 2017
 Less than 12 Months 12 Months or More    
 
Estimated
Fair Value
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
Gross
Unrealized
Losses
 
Total
Estimated
Fair Value
 
Total
Gross
Unrealized
Losses
U.S. Government and agency securities$13.2
 $(0.1) $1.1
 $—
 $14.3
 $(0.1)
Corporate bonds4.0
 —
 1.4
 —
 5.4
 —
Asset-backed securities4.2
 —
 —
 —
 4.2
 —
Mortgage-backed securities2.3
 —
 —
 —
 2.3
 —
Total restricted securities available for sale$23.7
 $(0.1) $2.5
 $—
 $26.2
 $(0.1)

(In millions)Securities Available for Sale with Gross Unrealized Losses as of December 31, 2016
 Less than 12 Months 12 Months or More    
 
Estimated
Fair Value
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
Gross
Unrealized
Losses
 
Total
Estimated
Fair Value
 
Total
Gross
Unrealized
Losses
U.S. Government and agency securities$16.4
 $(0.1) $—
 $—
 $16.4
 $(0.1)
Corporate bonds11.8
 (0.2) —
 —
 11.8
 (0.2)
Asset-backed securities2.8
 —
 —
 —
 2.8
 —
Mortgage-backed securities2.4
 —
 —
 —
 2.4
 —
Total restricted securities available for sale$33.4
 $(0.3) $—
 $—
 $33.4
 $(0.3)

The cost and estimated fair values of debt securities by contractual maturity were as follows (securities with multiple maturity dates are classified in the period of final maturity). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(In millions)As of
 March 31, 2024December 31, 2023
Contractual MaturityAmortized CostEstimated Fair
Value		Amortized CostEstimated Fair
Value
Within one year$4.8 $4.7 $6.9 $6.8 
Over one year to five years87.6 86.1 80.5 79.1 
Over five years to ten years9.0 9.0 7.1 7.2 
Over ten years0.1 0.1 0.1 0.1 
Total restricted securities available for sale$101.5 $99.9 $94.6 $93.2 

6.           LOANS RECEIVABLE
Loans receivable and allowance for credit losses consist of the following:
(In millions)As of March 31, 2024
 Dealer LoansPurchased LoansTotal
Loans receivable$7,553.0 $2,930.5 $10,483.5 
Allowance for credit losses(2,471.2)(666.7)(3,137.9)
Loans receivable, net$5,081.8 $2,263.8 $7,345.6 
(In millions)As of December 31, 2023
 Dealer LoansPurchased LoansTotal
Loans receivable$7,065.5 $2,954.6 $10,020.1 
Allowance for credit losses(2,355.7)(709.1)(3,064.8)
Loans receivable, net$4,709.8 $2,245.5 $6,955.3 


18
(In millions) As of
  September 30, 2017 December 31, 2016
Contractual Maturity Cost 
Estimated Fair
Value
 Cost 
Estimated Fair
Value
Within one year $0.7
 $0.7
 $1.6
 $1.6
Over one year to five years 42.5
 42.5
 39.3
 39.1
Over five years to ten years 0.6
 0.6
 2.2
 2.2
Over ten years 2.3
 2.3
 2.4
 2.4
Total restricted securities available for sale $46.1
 $46.1
 $45.5
 $45.3



15

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

6.           LOANS RECEIVABLE

Loans receivable consists of the following:
(In millions)As of September 30, 2017
 Dealer Loans Purchased Loans Total
Loans receivable$3,474.3
 $1,353.3
 $4,827.6
Allowance for credit losses(354.6) (21.6) (376.2)
Loans receivable, net$3,119.7
 $1,331.7
 $4,451.4
      
(In millions)As of December 31, 2016
 Dealer Loans Purchased Loans Total
Loans receivable$3,209.0
 $998.0
 $4,207.0
Allowance for credit losses(309.3) (11.1) (320.4)
Loans receivable, net$2,899.7
 $986.9
 $3,886.6

A summary of changes in Loans receivable and allowance for credit losses is as follows:

For the Three Months Ended March 31, 2024
(In millions)Loans ReceivableAllowance for Credit LossesLoans Receivable, Net
Dealer LoansPurchased LoansTotalDealer LoansPurchased LoansTotalDealer LoansPurchased LoansTotal
Balance, beginning of period$7,065.5 $2,954.6 $10,020.1 $(2,355.7)$(709.1)$(3,064.8)$4,709.8 $2,245.5 $6,955.3 
Finance charges438.5 228.0 666.5 (148.2)(49.1)(197.3)290.3 178.9 469.2 
Provision for credit losses— — — (121.7)(64.3)(186.0)(121.7)(64.3)(186.0)
New Consumer Loan assignments (1)1,009.4 307.6 1,317.0 — — — 1,009.4 307.6 1,317.0 
Collections (2)(864.9)(428.8)(1,293.7)— — — (864.9)(428.8)(1,293.7)
Accelerated Dealer Holdback payments15.1 — 15.1 — — — 15.1 — 15.1 
Dealer Holdback payments64.9 — 64.9 — — — 64.9 — 64.9 
Transfers (3)(36.9)36.9 — 12.0 (12.0)— (24.9)24.9 — 
Write-offs(142.8)(168.6)(311.4)142.8 168.6 311.4 — — — 
Recoveries (4)0.4 0.8 1.2 (0.4)(0.8)(1.2)— — — 
Deferral of Loan origination costs3.8 — 3.8 — — — 3.8 — 3.8 
Balance, end of period$7,553.0 $2,930.5 $10,483.5 $(2,471.2)$(666.7)$(3,137.9)$5,081.8 $2,263.8 $7,345.6 
For the Three Months Ended March 31, 2023
(In millions)Loans ReceivableAllowance for Credit LossesLoans Receivable, Net
Dealer LoansPurchased LoansTotalDealer LoansPurchased LoansTotalDealer LoansPurchased LoansTotal
Balance, beginning of period$6,074.8 $3,090.7 $9,165.5 $(2,000.0)$(867.8)$(2,867.8)$4,074.8 $2,222.9 $6,297.7 
Finance charges368.3 231.1 599.4 (122.6)(55.7)(178.3)245.7 175.4 421.1 
Provision for credit losses— — — (74.7)(62.7)(137.4)(74.7)(62.7)(137.4)
New Consumer Loan assignments (1)745.9 349.4 1,095.3 — — — 745.9 349.4 1,095.3 
Collections (2)(808.6)(438.4)(1,247.0)— — — (808.6)(438.4)(1,247.0)
Accelerated Dealer Holdback payments10.8 — 10.8 — — — 10.8 — 10.8 
Dealer Holdback payments57.2 — 57.2 — — — 57.2 — 57.2 
Transfers (3)(19.2)19.2 — 6.7 (6.7)— (12.5)12.5 — 
Write-offs(117.7)(182.9)(300.6)117.7 182.9 300.6 — — — 
Recoveries (4)0.3 0.8 1.1 (0.3)(0.8)(1.1)— — — 
Deferral of Loan origination costs2.6 — 2.6 — — — 2.6 — 2.6 
Balance, end of period$6,314.4 $3,069.9 $9,384.3 $(2,073.2)$(810.8)$(2,884.0)$4,241.2 $2,259.1 $6,500.3 
(1)The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.
(2)Represents repayments that we collected on Consumer Loans assigned under our programs.
(3)Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance and related allowance for credit losses balance to Purchased Loans in the period this forfeiture occurs.
(4)The Dealer Loans amount represents net cash flows received (collections less any related Dealer Holdback payments) on Dealer Loans that were previously written off in full. The Purchased Loans amount represents collections received on Purchased Loans that were previously written off in full.
19
(In millions)For the Three Months Ended September 30, 2017
 Dealer Loans Purchased Loans Total
Balance, beginning of period$3,385.3
 $1,252.4
 $4,637.7
New Consumer Loan assignments (1)474.0
 216.6
 690.6
Principal collected on Loans receivable(424.6) (116.5) (541.1)
Accelerated Dealer Holdback payments11.9
 —
 11.9
Dealer Holdback payments32.1
 —
 32.1
Transfers (2)(1.9) 1.9
 —
Write-offs(2.9) (1.2) (4.1)
Recoveries (3)0.4
 0.1
 0.5
Balance, end of period$3,474.3
 $1,353.3
 $4,827.6
      
(In millions)For the Three Months Ended September 30, 2016
 Dealer Loans Purchased Loans Total
Balance, beginning of period$3,049.2
 $762.8
 $3,812.0
New Consumer Loan assignments (1)475.7
 218.6
 694.3
Principal collected on Loans receivable(412.7) (77.1) (489.8)
Accelerated Dealer Holdback payments13.7
 —
 13.7
Dealer Holdback payments33.9
 —
 33.9
Transfers (2)(5.1) 5.1
 —
Write-offs(3.1) (0.2) (3.3)
Recoveries (3)0.3
 0.1
 0.4
Balance, end of period$3,151.9
 $909.3
 $4,061.2


16


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

(In millions)For the Nine Months Ended September 30, 2017
 Dealer Loans Purchased Loans Total
Balance, beginning of period$3,209.0
 $998.0
 $4,207.0
New Consumer Loan assignments (1)1,467.2
 686.7
 2,153.9
Principal collected on Loans receivable(1,323.8) (333.6) (1,657.4)
Accelerated Dealer Holdback payments35.5
 —
 35.5
Dealer Holdback payments100.8
 —
 100.8
Transfers (2)(4.1) 4.1
 —
Write-offs(11.4) (2.1) (13.5)
Recoveries (3)1.1
 0.2
 1.3
Balance, end of period$3,474.3
 $1,353.3
 $4,827.6
      
(In millions)For the Nine Months Ended September 30, 2016
 Dealer Loans Purchased Loans Total
Balance, beginning of period$2,823.4
 $521.7
 $3,345.1
New Consumer Loan assignments (1)1,476.4
 589.4
 2,065.8
Principal collected on Loans receivable(1,284.0) (209.2) (1,493.2)
Accelerated Dealer Holdback payments43.4
 —
 43.4
Dealer Holdback payments109.7
 —
 109.7
Transfers (2)(7.6) 7.6
 —
Write-offs(10.4) (0.3) (10.7)
Recoveries (3)1.0
 0.1
 1.1
Balance, end of period$3,151.9
 $909.3
 $4,061.2
(1)The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program.  The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.
(2)Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s outstanding Dealer Loan balance to Purchased Loans in the period this forfeiture occurs.
(3)Represents collections received on previously written off Loans.  

Contractual net cash flows are comprised of the contractual repayments of the underlyingWe recognize provision for credit losses on new Consumer LoansLoan assignments for Dealer and Purchased Loans, less the related Dealer Holdback payments for Dealer Loans. The difference between the contractual net cash flows that were not expected to be realized at the time of assignment. We also recognize provision for credit losses on forecast changes in the amount and thetiming of expected future net cash flows is referredsubsequent to asassignment. The following table summarizes the nonaccretable difference. This difference is neither accreted intoprovision for credit losses for each of these components:
(In millions)For the Three Months Ended March 31, 2024
Provision for Credit LossesDealer LoansPurchased LoansTotal
New Consumer Loan assignments$57.4 $41.4 $98.8 
Forecast changes64.3 22.9 87.2 
Total$121.7 $64.3 $186.0 
(In millions)For the Three Months Ended March 31, 2023
Provision for Credit LossesDealer LoansPurchased LoansTotal
New Consumer Loan assignments$37.7 $55.4 $93.1 
Forecast changes37.0 7.3 44.3 
Total$74.7 $62.7 $137.4 

The net Loan income nor recorded in our balance sheets. We do not believe(finance charge revenue less provision for credit losses expense) that we recognize over the life of a Loan equals the cash we collect from the underlying Consumer Loan less the cash we pay to the Dealer. Under CECL, we are required to recognize:
•a significant provision for credit losses expense at the time of the Loan's assignment to us for contractual net cash flows we do not expect to realize; and
•finance charge revenue in subsequent periods that is significantly in excess of our Loan portfolio are relevant in assessing our financial position. We are contractually owed repayments on many Consumer Loans, primarily those older than 120 months, where we are not forecasting any future net cash flows.expected yield.



17
20



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

The excess of expected net cash flows over the outstanding balance of Loans receivable, net is referred to as the accretable yield and is recognized on a level-yield basis as finance charge income over the remaining lives of the Loans. A summary of changes in the accretable yield is as follows:
(In millions)For the Three Months Ended September 30, 2017
 Dealer Loans Purchased Loans Total
Balance, beginning of period$1,038.4
 $456.4
 $1,494.8
New Consumer Loan assignments (1)192.6
 92.7
 285.3
Accretion (2)(194.7) (67.0) (261.7)
Provision for credit losses20.2
 5.5
 25.7
Forecast changes(1.9) 7.4
 5.5
Transfers (3)(0.5) 1.3
 0.8
Balance, end of period$1,054.1
 $496.3
 $1,550.4
      
(In millions)For the Three Months Ended September 30, 2016
 Dealer Loans Purchased Loans Total
Balance, beginning of period$963.2
 $283.3
 $1,246.5
New Consumer Loan assignments (1)196.1
 80.6
 276.7
Accretion (2)(183.1) (43.1) (226.2)
Provision for credit losses21.6
 1.2
 22.8
Forecast changes(7.6) 1.6
 (6.0)
Transfers (3)(0.8) 2.5
 1.7
Balance, end of period$989.4
 $326.1
 $1,315.5
      
(In millions)For the Nine Months Ended September 30, 2017
 Dealer Loans Purchased Loans Total
Balance, beginning of period$982.6
 $348.1
 $1,330.7
New Consumer Loan assignments (1)599.1
 284.6
 883.7
Accretion (2)(575.5) (180.3) (755.8)
Provision for credit losses55.6
 12.4
 68.0
Forecast changes(6.8) 29.2
 22.4
Transfers (3)(0.9) 2.3
 1.4
Balance, end of period$1,054.1
 $496.3
 $1,550.4
      
(In millions)For the Nine Months Ended September 30, 2016
 Dealer Loans Purchased Loans Total
Balance, beginning of period$874.2
 $198.6
 $1,072.8
New Consumer Loan assignments (1)613.8
 218.2
 832.0
Accretion (2)(537.2) (111.5) (648.7)
Provision for credit losses61.3
 1.5
 62.8
Forecast changes(21.1) 14.9
 (6.2)
Transfers (3)(1.6) 4.4
 2.8
Balance, end of period$989.4
 $326.1
 $1,315.5

(1)The Dealer Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related advances paid to Dealers. The Purchased Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Purchase Program, less the related one-time payments made to Dealers.
(2)Represents finance charges excluding the amortization of deferred direct origination costs for Dealer Loans.
(3)Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance and related expected future net cash flows to Purchased Loans in the period this forfeiture occurs.

18

Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

Additional information related to new Consumer Loan assignments is as follows:

(In millions)For the Three Months Ended March 31, 2024
New Consumer Loan AssignmentsDealer LoansPurchased LoansTotal
Contractual net cash flows at the time of assignment (1)$1,586.2 $636.5 $2,222.7 
Expected net cash flows at the time of assignment (2)1,437.8 448.2 1,886.0 
Loans receivable at the time of assignment (3)1,009.4 307.6 1,317.0 

Provision for credit losses expense at the time of assignment$(57.4)$(41.4)$(98.8)
Expected future finance charges at the time of assignment (4)485.8 182.0 667.8 
Expected net Loan income at the time of assignment (5)$428.4 $140.6 $569.0 
(In millions)For the Three Months Ended March 31, 2023
New Consumer Loan AssignmentsDealer LoansPurchased LoansTotal
Contractual net cash flows at the time of assignment (1)$1,172.8 $713.6 $1,886.4 
Expected net cash flows at the time of assignment (2)1,064.1 488.8 1,552.9 
Loans receivable at the time of assignment (3)745.9 349.4 1,095.3 
Provision for credit losses expense at the time of assignment$(37.7)$(55.4)$(93.1)
Expected future finance charges at the time of assignment (4)355.9 194.8 550.7 
Expected net Loan income at the time of assignment (5)$318.2 $139.4 $457.6 
(1)The Dealer Loans amount represents repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we would be required to make if we collected all of the contractual repayments. The Purchased Loans amount represents repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Purchase Program.
(2)The Dealer Loans amount represents repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make. The Purchased Loans amount represents repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program. The Loan amounts also represent the fair value at the time of assignment.
(3)The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.
(4)Represents revenue that is expected to be recognized on a level-yield basis over the lives of the Loans.
(5)Represents the amount that expected net cash flows at the time of assignment exceed Loans receivable at the time of assignment.



21
(In millions)For the Three Months Ended September 30, 2017
 Dealer Loans Purchased Loans Total
Contractual net cash flows at the time of assignment (1)$754.6
 $476.0
 $1,230.6
Expected net cash flows at the time of assignment (2)666.6
 309.3
 975.9
Fair value at the time of assignment (3)474.0
 216.6
 690.6
      
(In millions)For the Three Months Ended September 30, 2016
 Dealer Loans Purchased Loans Total
Contractual net cash flows at the time of assignment (1)$756.5
 $448.2
 $1,204.7
Expected net cash flows at the time of assignment (2)671.8
 299.2
 971.0
Fair value at the time of assignment (3)475.7
 218.6
 694.3
      
(In millions)For the Nine Months Ended September 30, 2017
 Dealer Loans Purchased Loans Total
Contractual net cash flows at the time of assignment (1)$2,335.1
 $1,492.0
 $3,827.1
Expected net cash flows at the time of assignment (2)2,066.3
 971.3
 3,037.6
Fair value at the time of assignment (3)1,467.2
 686.7
 2,153.9
      
(In millions)For the Nine Months Ended September 30, 2016
 Dealer Loans Purchased Loans Total
Contractual net cash flows at the time of assignment (1)$2,345.2
 $1,197.7
 $3,542.9
Expected net cash flows at the time of assignment (2)2,090.2
 807.6
 2,897.8
Fair value at the time of assignment (3)1,476.4
 589.4
 2,065.8

(1)The Dealer Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we would be required to make if we collected all of the contractual repayments. The Purchased Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Purchase Program.
(2)The Dealer Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make. The Purchased Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program.
(3)The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.


19


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

A summary of changes in expected future net cash flows is as follows:
(In millions)For the Three Months Ended March 31, 2024
Expected Future Net Cash FlowsDealer LoansPurchased LoansTotal
Balance, beginning of period$6,707.2 $3,472.0 $10,179.2 
New Consumer Loan assignments (1)1,437.8 448.2 1,886.0 
Realized net cash flows (2)(784.9)(428.8)(1,213.7)
Forecast changes(27.0)(3.8)(30.8)
Transfers (3)(37.2)39.5 2.3 
Balance, end of period$7,295.9 $3,527.1 $10,823.0 
(In millions)For the Three Months Ended March 31, 2023
Expected Future Net Cash FlowsDealer LoansPurchased LoansTotal
Balance, beginning of period$5,637.9 $3,395.5 $9,033.4 
New Consumer Loan assignments (1)1,064.1 488.8 1,552.9 
Realized net cash flows (2)(740.6)(438.4)(1,179.0)
Forecast changes(7.2)16.6 9.4 
Transfers (3)(18.5)22.1 3.6 
Balance, end of period$5,935.7 $3,484.6 $9,420.3 

(1)The Dealer Loans amount represents repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make. The Purchased Loans amount represents repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program.
(2)The Dealer Loans amount represents repayments that we collected on Consumer Loans assigned under our Portfolio Program, less the Dealer Holdback and Accelerated Dealer Holdback payments that we made. Purchased Loans amount represents repayments that we collected on Consumer Loans assigned under our Purchase Program.
(3)Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s outstanding Dealer Loan balance, related allowance for credit losses balance, and related expected future net cash flows to Purchased Loans in the period this forfeiture occurs.

Credit Quality


We monitor and evaluate the credit quality of Consumer Loans assigned under our Portfolio and Purchase Programs on a monthly basis by comparing our current forecasted collection rates to our prior forecasted collection rates and our initial expectations. For additional information regarding credit quality, see Note 3 to the consolidated financial statements. 3. 


22


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
The following table compares our aggregated forecast of Consumer Loan collection rates as of September 30, 2017,March 31, 2024 with the aggregated forecasts as of June 30, 2017, December 31, 20162023 and at the time of assignment, segmented by year of assignment:
Total Loans
 Forecasted Collection Percentage as of (1)Current Forecast Variance from
 Consumer Loan
Assignment Year		March 31, 2024December 31, 2023Initial
Forecast		December 31, 2023Initial
Forecast
201565.3 %65.2 %67.7 %0.1 %-2.4 %
201663.8 %63.8 %65.4 %0.0 %-1.6 %
201764.7 %64.7 %64.0 %0.0 %0.7 %
201865.5 %65.5 %63.6 %0.0 %1.9 %
201967.0 %66.9 %64.0 %0.1 %3.0 %
202067.7 %67.6 %63.4 %0.1 %4.3 %
202164.3 %64.5 %66.3 %-0.2 %-2.0 %
202262.1 %62.7 %67.5 %-0.6 %-5.4 %
202367.2 %67.4 %67.5 %-0.2 %-0.3 %
202466.9 %— 66.9 %— 0.0 %
Dealer Loans
 Forecasted Collection Percentage as of (1) (2)Current Forecast Variance from
 Consumer Loan
Assignment Year		March 31, 2024December 31, 2023Initial
Forecast		December 31, 2023Initial
Forecast
201564.6 %64.6 %67.5 %0.0 %-2.9 %
201663.0 %63.0 %65.1 %0.0 %-2.1 %
201764.0 %64.0 %63.8 %0.0 %0.2 %
201864.9 %64.9 %63.6 %0.0 %1.3 %
201966.7 %66.5 %63.9 %0.2 %2.8 %
202067.5 %67.4 %63.3 %0.1 %4.2 %
202164.1 %64.2 %66.3 %-0.1 %-2.2 %
202261.4 %62.0 %67.3 %-0.6 %-5.9 %
202366.1 %66.4 %66.8 %-0.3 %-0.7 %
202466.0 %— 66.0 %— 0.0 %
  Forecasted Collection Percentage as of (1) Current Forecast Variance from
 Consumer Loan
Assignment Year
 September 30, 2017 June 30, 2017 December 31, 2016 Initial Forecast June 30, 2017 December 31, 2016 Initial Forecast
2008 70.5% 70.5% 70.4% 69.7% 0.0 % 0.1 % 0.8 %
2009 79.5% 79.5% 79.4% 71.9% 0.0 % 0.1 % 7.6 %
2010 77.6% 77.6% 77.6% 73.6% 0.0 % 0.0 % 4.0 %
2011 74.7% 74.8% 74.7% 72.5% -0.1 % 0.0 % 2.2 %
2012 73.8% 73.8% 73.7% 71.4% 0.0 % 0.1 % 2.4 %
2013 73.5% 73.5% 73.4% 72.0% 0.0 % 0.1 % 1.5 %
2014 71.7% 71.7% 71.8% 71.8% 0.0 % -0.1 % -0.1 %
2015 65.5% 65.7% 66.1% 67.7% -0.2 % -0.6 % -2.2 %
2016 64.9% 65.1% 65.1% 65.4% -0.2 % -0.2 % -0.5 %
     2017 (2) 65.5% 65.5% —
 64.1% 0.0 % —
 1.4 %
Purchased Loans
 Forecasted Collection Percentage as of (1) (2)Current Forecast Variance from
 Consumer Loan
Assignment Year		March 31, 2024December 31, 2023Initial
Forecast		December 31, 2023Initial
Forecast
201568.9 %68.9 %68.5 %0.0 %0.4 %
201666.1 %66.1 %66.5 %0.0 %-0.4 %
201766.3 %66.3 %64.6 %0.0 %1.7 %
201866.8 %66.8 %63.5 %0.0 %3.3 %
201967.7 %67.5 %64.2 %0.2 %3.5 %
202067.9 %67.8 %63.6 %0.1 %4.3 %
202164.8 %65.0 %66.3 %-0.2 %-1.5 %
202263.8 %64.3 %68.0 %-0.5 %-4.2 %
202370.0 %70.1 %69.4 %-0.1 %0.6 %
202470.0 %— 69.9 %— 0.1 %


(1)
(1)Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates in the table.
(2)The forecasted collection rate for 2017 Consumer Loans as of September 30, 2017 includes both Consumer Loans that were in our portfolio as of June 30, 2017 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments:
  Forecasted Collection Percentage as of Current Forecast Variance from
2017 Consumer Loan Assignment Period September 30, 2017 June 30, 2017 Initial Forecast June 30, 2017 Initial Forecast
January 1, 2017 through June 30, 2017 65.6% 65.5% 64.2% 0.1% 1.4%
July 1, 2017 through September 30, 2017 65.3% —
 63.9% —
 1.4%

Consumer Loans assigned in 2009 through 2013 and 2017 have yielded forecasted collection results materially better than our initial estimates, while Consumer Loans assigned in 2015 have yielded forecasted collection results materially worse than our initial estimates. For Consumer Loans assigned in 2008, 2014 and 2016, actual results have been close to our initial estimates. For the three months ended September 30, 2017, forecasted collection rates improved for Consumer Loans assigned in 2017, declined for Consumer Loans assigned in 2015 and 2016 and were generally consistent with expectations at the start of the period for all other assignment years presented. For the nine months ended September 30, 2017,table.
(2)The forecasted collection rates improvedpresented for Dealer Loans and Purchased Loans reflect the Consumer Loans assigned in 2017, declined for Consumer Loans assigned in 2015 and 2016 and were generally consistent with expectationsLoan classification at the starttime of the period for all other assignment years presented.



assignment.
20
23



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

Advances paidWe evaluate and adjust the expected collection rate for each Consumer Loan subsequent to Dealers onassignment primarily through the monitoring of consumer payment behavior. The following table summarizes the past-due status of Consumer Loans assigned under our Portfolio ProgramLoan assignments as of March 31, 2024 and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program are aggregated into pools for purposes of recognizing revenue and evaluating impairment. As a result of this aggregation, we are not able to segment the carrying amounts of the majority of our Loan portfolioDecember 31, 2023, segmented by year of assignment. We are able to segment our Loan portfolio by the performance of the Loan pools. Performance considers both the amount and timing of expected net cash flows and is measured by comparing the balance of the Loan pool to the discounted value of the expected future net cash flows of each Loan pool using the yield established at the time of assignment. The following table segments our Loan portfolio by the performance of the Loan pools:assignment:
(In millions)Total Loans as of March 31, 2024 (1) (2)
Pre-term Consumer Loans (3)Post-term Consumer Loans (4)Total
Consumer Loan Assignment YearCurrent (5)Past Due
11-90 Days
Past Due
Over 90 Days
2019 and prior$122.3 $67.7 $241.6 $244.2 $675.8 
2020271.0 124.6 271.9 8.7 676.2 
2021511.4 204.7 327.7 1.1 1,044.9 
20221,325.5 397.7 399.4 0.1 2,122.7 
20233,351.6 650.5 219.6 — 4,221.7 
20241,682.3 59.9 — — 1,742.2 
$7,264.1 $1,505.1 $1,460.2 $254.1 $10,483.5 
(In millions)Dealer Loans as of March 31, 2024 (1)
Pre-term Consumer Loans (3)Post-term Consumer Loans (4)Total
Consumer Loan Assignment YearCurrent (5)Past Due
11-90 Days		Past Due
Over 90 Days
2019 and prior$55.7 $30.4 $111.8 $137.6 $335.5 
2020164.0 74.0 163.9 6.6 408.5 
2021346.5 134.7 217.2 0.9 699.3 
2022960.8 284.1 284.7 0.1 1,529.7 
20232,514.4 496.3 163.6 — 3,174.3 
20241,356.2 49.5 — — 1,405.7 
$5,397.6 $1,069.0 $941.2 $145.2 $7,553.0 
(In millions)Purchased Loans as of March 31, 2024 (2)
Pre-term Consumer Loans (3)Post-term Consumer Loans (4)Total
Consumer Loan Assignment YearCurrent (5)Past Due
11-90 Days		Past Due
Over 90 Days
2019 and prior$66.6 $37.3 $129.8 $106.6 $340.3 
2020107.0 50.6 108.0 2.1 267.7 
2021164.9 70.0 110.5 0.2 345.6 
2022364.7 113.6 114.7 — 593.0 
2023837.2 154.2 56.0 — 1,047.4 
2024326.1 10.4 — — 336.5 
$1,866.5 $436.1 $519.0 $108.9 $2,930.5 

(In millions)Total Loans as of December 31, 2023 (1) (2)
Pre-term Consumer Loans (3)Post-term Consumer Loans (4)Total
Consumer Loan Assignment YearCurrent (5)Past Due
11-90 Days
Past Due
Over 90 Days
2018 and prior$24.2 $16.8 $73.5 $204.9 $319.4 
2019150.7 83.8 237.6 39.5 511.6 
2020328.9 165.5 314.5 4.6 813.5 
2021596.6 262.1 368.7 0.7 1,228.1 
20221,518.0 499.8 422.5 — 2,440.3 
20233,888.7 666.5 152.0 — 4,707.2 
$6,507.1 $1,694.5 $1,568.8 $249.7 $10,020.1 
24
(In millions)As of September 30, 2017
 
Loan Pool Performance
Meets or Exceeds Initial Estimates
 
Loan Pool Performance
Less than Initial Estimates
 
Dealer
Loans
 
Purchased
Loans
 Total 
Dealer
Loans
 
Purchased
Loans
 Total
Loans receivable$1,127.8
 $845.8
 $1,973.6
 $2,346.5
 $507.5
 $2,854.0
Allowance for credit losses—
 —
 —
 (354.6) (21.6) (376.2)
    Loans receivable, net$1,127.8
 $845.8
 $1,973.6
 $1,991.9
 $485.9
 $2,477.8
            
(In millions)As of December 31, 2016
 
Loan Pool Performance
Meets or Exceeds Initial Estimates
 
Loan Pool Performance
Less than Initial Estimates
 
Dealer
Loans
 
Purchased
Loans
 Total 
Dealer
Loans
 
Purchased
Loans
 Total
Loans receivable$1,002.2
 $705.8
 $1,708.0
 $2,206.8
 $292.2
 $2,499.0
Allowance for credit losses—
 —
 —
 (309.3) (11.1) (320.4)
    Loans receivable, net$1,002.2
 $705.8
 $1,708.0
 $1,897.5
 $281.1
 $2,178.6


21


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

(In millions)Dealer Loans as of December 31, 2023 (1)
Pre-term Consumer Loans (3)Post-term Consumer Loans (4)Total
Consumer Loan Assignment YearCurrent (5)Past Due
11-90 Days		Past Due
Over 90 Days
2018 and prior$11.7 $7.9 $35.0 $117.8 $172.4 
201969.9 38.0 111.2 22.0 241.1 
2020201.7 98.0 190.4 3.5 493.6 
2021407.3 173.4 245.0 0.6 826.3 
20221,109.4 360.4 303.5 — 1,773.3 
20232,942.3 503.6 112.9 — 3,558.8 
$4,742.3 $1,181.3 $998.0 $143.9 $7,065.5 
A summary
(In millions)Purchased Loans as of December 31, 2023 (2)
Pre-term Consumer Loans (3)Post-term Consumer Loans (4)Total
Consumer Loan Assignment YearCurrent (5)Past Due
11-90 Days		Past Due
Over 90 Days
2018 and prior$12.5 $8.9 $38.5 $87.1 $147.0 
201980.8 45.8 126.4 17.5 270.5 
2020127.2 67.5 124.1 1.1 319.9 
2021189.3 88.7 123.7 0.1 401.8 
2022408.6 139.4 119.0 — 667.0 
2023946.4 162.9 39.1 — 1,148.4 
$1,764.8 $513.2 $570.8 $105.8 $2,954.6 



(1)As Consumer Loans are aggregated by Dealer for purposes of changes in the allowance forrecognizing revenue and measuring credit losses, is as follows:the Dealer Loan amount was estimated by allocating the balance of each Dealer Loan to the underlying Consumer Loans based on the forecasted future collections of each Consumer Loan.
(2)As certain Consumer Loans are aggregated by Dealer or month of purchase for purposes of recognizing revenue and measuring credit losses, the Purchased Loan amount was estimated by allocating the balance of certain Purchased Loans to the underlying Consumer Loans based on the forecasted future collections of each Consumer Loan.
(3)Represents the Loan balance attributable to Consumer Loans outstanding within their initial loan terms.
(4)Represents the Loan balance attributable to Consumer Loans outstanding beyond their initial loan terms.
(5)We consider a Consumer Loan to be current for purposes of forecasting expected collection rates if contractual repayments are less than 11 days past due.

The following table summarizes the write-offs for Consumer Loan assignments for the three months ended March 31, 2024 and 2023, segmented by year of assignment:

(In millions)For the Three Months Ended March 31, 2024
Write-offs by Consumer Loan Assignment YearDealer LoansPurchased LoansTotal
2019 and prior$45.2 $41.5 $86.7 
202025.3 21.8 47.1 
202128.9 27.9 56.8 
202233.2 40.1 73.3 
20239.0 35.9 44.9 
20241.2 1.4 2.6 
$142.8 $168.6 $311.4 
25
(In millions)For the Three Months Ended September 30, 2017
 Dealer Loans Purchased Loans Total
Balance, beginning of period$336.9
 $17.2
 $354.1
Provision for credit losses20.2
 5.5
 25.7
Write-offs(2.9) (1.2) (4.1)
Recoveries (1)0.4
 0.1
 0.5
Balance, end of period$354.6
 $21.6
 $376.2
      
(In millions)For the Three Months Ended September 30, 2016
 Dealer Loans Purchased Loans Total
Balance, beginning of period$268.2
 $8.7
 $276.9
Provision for credit losses21.6
 1.2
 22.8
Write-offs(3.1) (0.2) (3.3)
Recoveries (1)0.3
 0.1
 0.4
Balance, end of period$287.0
 $9.8
 $296.8
      
(In millions)For the Nine Months Ended September 30, 2017
 Dealer Loans Purchased Loans Total
Balance, beginning of period$309.3
 $11.1
 $320.4
Provision for credit losses55.6
 12.4
 68.0
Write-offs(11.4) (2.1) (13.5)
Recoveries (1)1.1
 0.2
 1.3
Balance, end of period$354.6
 $21.6
 $376.2
      
(In millions)For the Nine Months Ended September 30, 2016
 Dealer Loans Purchased Loans Total
Balance, beginning of period$235.1
 $8.5
 $243.6
Provision for credit losses61.3
 1.5
 62.8
Write-offs(10.4) (0.3) (10.7)
Recoveries (1)1.0
 0.1
 1.1
Balance, end of period$287.0
 $9.8
 $296.8

(1)
Represents collections received on previously written off Loans. 

22

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

(In millions)For the Three Months Ended March 31, 2023
Write-offs by Consumer Loan Assignment YearDealer LoansPurchased LoansTotal
2018 and prior$31.6 $31.5 $63.1 
201923.7 48.3 72.0 
202023.7 28.8 52.5 
202118.8 32.9 51.7 
202219.0 40.3 59.3 
20230.9 1.1 2.0 
$117.7 $182.9 $300.6 

7.    PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

(In millions)As of
March 31, 2024December 31, 2023
Land and land improvements$2.9 $2.9 
Building and improvements58.8 58.8 
Data processing equipment and software49.2 50.0 
Office furniture and equipment2.6 2.6 
Total property and equipment113.5 114.3 
Less: Accumulated depreciation on property and equipment(68.9)(67.8)
Total property and equipment, net$44.6 $46.5 

As the vast majority of our team members now work remotely, we have significant excess space in the two office buildings that we own, which are located in Southfield, Michigan. After exploring options to reduce our office space, we have made the preliminary decision to sell the larger building and consolidate into the smaller building that has served as our headquarters since 1993.

The building that we intend to sell is currently scheduled for auction in mid-May 2024. As there is currently a significant amount of unoccupied office space in our region, we do not know whether the auction will result in a sale. Additionally, we believe the market value of the building and its improvements, together with the related land and land improvements and office furniture and equipment, is significantly less than the carrying value of $27.5 million. We have evaluated the facts and circumstances of the potential auction sale, and we do not believe that the building currently meets all of the criteria necessary for us to reclassify it as held for sale. If we were to reclassify the building as held for sale, we would record an impairment charge to reduce its carrying value to its estimated market value less costs to sell.


26


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
8.    REINSURANCE


A summary of reinsurance activity is as follows:
(In millions)For the Three Months Ended 
March 31,
 20242023
Net assumed written premiums$31.2 $25.4 
Net premiums earned21.9 17.4 
Provision for claims17.0 17.9 
Amortization of capitalized acquisition costs0.6 0.5 
(In millions)For the Three Months Ended 
 September 30,		 For the Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Net assumed written premiums$9.7
 $11.0
 $31.6
 $31.9
Net premiums earned10.3
 10.7
 30.9
 32.4
Provision for claims5.5
 6.6
 17.6
 20.4
Amortization of capitalized acquisition costs0.3
 0.3
 0.8
 0.8


The trust assets and related reinsurance liabilities are as follows:
(In millions) As of
 Balance Sheet LocationMarch 31, 2024December 31, 2023
Trust assetsRestricted cash and cash equivalents$3.0 $1.4 
Trust assetsRestricted securities available for sale99.9 93.2 
Unearned premiumAccounts payable and accrued liabilities76.9 67.6 
Claims reserve (1)Accounts payable and accrued liabilities5.6 5.6 

(1)    The claims reserve represents our liability for incurred-but-not-reported claims and is estimated based on historical claims experience.

9.    OTHER INCOME
(In millions)  As of
 Balance Sheet location September 30, 2017 December 31, 2016
Trust assetsRestricted cash and cash equivalents $0.7
 $0.5
Trust assetsRestricted securities available for sale 46.1
 45.3
Unearned premiumAccounts payable and accrued liabilities 33.5
 32.8
Claims reserve (1)Accounts payable and accrued liabilities 1.1
 1.0


(1)The claims reserve represents our liability for incurred-but-not-reported claims and is estimated based on historical claims experience.

8.           DEBT

DebtOther income consists of the following:
(In millions)For the Three Months Ended March 31,
20242023
Ancillary product profit sharing$7.3 $7.5 
Interest5.8 4.1 
Remarketing fees3.3 3.0 
Other0.5 0.7 
Total$16.9 $15.3 
(In millions) As of September 30, 2017
  Principal Outstanding Unamortized Debt Issuance Costs Unamortized Discount 
Carrying
Amount
Revolving secured line of credit (1) $130.5
 $—
 $—
 $130.5
Secured financing (2) 2,339.7
 (11.8) —
 2,327.9
Senior notes 550.0
 (6.2) (1.4) 542.4
Total debt $3,020.2
 $(18.0) $(1.4) $3,000.8
         
(In millions) As of December 31, 2016
  Principal Outstanding Unamortized Debt Issuance Costs Unamortized Discount 
Carrying
Amount
Revolving secured line of credit (1) $—
 $—
 $—
 $—
Secured financing (2) 2,072.1
 (9.7) —
 2,062.4
Senior notes 550.0
 (7.1) (1.6) 541.3
Total debt $2,622.1
 $(16.8) $(1.6) $2,603.7


(1)Excludes deferred debt issuance costs of $3.1 million and $2.4 million as of September 30, 2017 and December 31, 2016, respectively, which are included in other assets.
(2)Warehouse facilities and Term ABS.

Ancillary product profit sharing consists of payments received from TPPs based upon the performance of vehicle service contracts and GAP contracts, and is recognized as income over the life of the vehicle service contracts and GAP contracts.


Interest consists of income earned on cash and cash equivalents, restricted cash and cash equivalents, and restricted securities available for sale. Interest income is generally recognized over time as it is earned. Interest income on restricted securities available for sale is recognized over the life of the underlying financial instruments using the interest method.

Remarketing fees consist of fees charged to Dealers that are retained from the sale of repossessed vehicles by Vehicle Remarketing Services, Inc. (“VRS”), our wholly owned subsidiary that is responsible for remarketing vehicles for Credit Acceptance. VRS coordinates vehicle repossessions with a nationwide network of repossession contractors, the redemption of the vehicles by the consumers, and the sale of the vehicles through a nationwide network of vehicle auctions. VRS recognizes income from the retained fees at the time of the sale and does not retain a fee if a repossessed vehicle is redeemed by the consumer prior to the sale. 


23
27



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

The following table disaggregates our other income by major source of income and timing of the revenue recognition:
(In millions)For the Three Months Ended March 31, 2024
 Ancillary Product Profit SharingInterestRemarketing FeesOtherTotal Other Income
Source of Income
Third-Party Providers$7.3 $5.8 $— $0.1 $13.2 
Dealers— — 3.3 0.4 3.7 
Total$7.3 $5.8 $3.3 $0.5 $16.9 
Timing of Revenue Recognition
Over time$7.3 $5.8 $— $0.2 $13.3 
At a point in time— — 3.3 0.3 3.6 
Total$7.3 $5.8 $3.3 $0.5 $16.9 

10.           DEBT

Debt consists of the following:
(In millions)As of March 31, 2024
Principal OutstandingUnamortized Debt Issuance CostsUnamortized DiscountCarrying
Amount
Revolving secured lines of credit (1)$169.5 $— $— $169.5 
Secured financing (2)4,474.5 (28.2)(2.2)4,444.1 
Senior notes1,000.0 (10.4)— 989.6 
Mortgage note8.3 — — 8.3 
Total debt$5,652.3 $(38.6)$(2.2)$5,611.5 
(In millions)As of December 31, 2023
Principal OutstandingUnamortized Debt Issuance CostsUnamortized DiscountCarrying
Amount
Revolving secured lines of credit (1)$79.2 $— $— $79.2 
Secured financing (2)4,019.0 (25.6)(2.5)3,990.9 
Senior notes1,000.0 (11.0)— 989.0 
Mortgage note8.4 — — 8.4 
Total debt$5,106.6 $(36.6)$(2.5)$5,067.5 

(1)Excludes deferred debt issuance costs of $3.8 million and $4.2 million as of March 31, 2024 and December 31, 2023, respectively, which are included in other assets.
(2)Warehouse facilities and Term ABS financings.

28


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
General information for each of our financing transactions in place as of September 30, 2017March 31, 2024 is as follows:
(Dollars in millions)          
Financings 
Wholly-owned
Subsidiary
 Maturity Date 
Financing
Amount
 Interest Rate as of  
 September 30, 2017
Revolving Secured Line of Credit n/a 06/22/2020  $345.0
(1) At our option, either LIBOR plus 187.5 basis points or the prime rate plus 87.5 basis points
Warehouse Facility II (2) CAC Warehouse Funding Corp. II 06/23/2019(4) $400.0
  LIBOR plus 225 basis points (3)
Warehouse Facility IV (2) CAC Warehouse Funding LLC IV 04/30/2020(4) $100.0
  LIBOR plus 225 basis points (3)
Warehouse Facility V (2) CAC Warehouse Funding LLC V 08/18/2019(5) $100.0
  LIBOR plus 225 basis points (3)
Warehouse Facility VI (2) CAC Warehouse Funding LLC VI 09/30/2020(4) $75.0
  LIBOR plus 200 basis points
Term ABS 2014-2 (2) Credit Acceptance Funding LLC 2014-2 09/15/2016(4) $349.0
  Fixed rate
Term ABS 2015-1 (2) Credit Acceptance Funding LLC 2015-1 01/16/2017(4) $300.6
  Fixed rate
Term ABS 2015-2 (2) Credit Acceptance Funding LLC 2015-2 08/15/2017(4) $300.2
  Fixed rate
Term ABS 2016-1 (2) Credit Acceptance Funding LLC 2016-1 02/15/2018(4) $385.0
  LIBOR plus 195 basis points (3)
Term ABS 2016-2 (2) Credit Acceptance Funding LLC 2016-2 05/15/2018(4) $350.2
  Fixed rate
Term ABS 2016-3 (2) Credit Acceptance Funding LLC 2016-3 10/15/2018(4) $350.0
  Fixed rate
Term ABS 2017-1 (2) Credit Acceptance Funding LLC 2017-1 02/15/2019(4) $350.0
  Fixed rate
Term ABS 2017-2 (2) Credit Acceptance Funding LLC 2017-2 06/17/2019(4) $450.0
  Fixed rate
2021 Senior Notes n/a 02/15/2021  $300.0
  Fixed rate
2023 Senior Notes n/a 03/15/2023  $250.0
  Fixed rate

(1)Under the terms of the revolving secured line of credit facility as of September 30, 2017, the amount of the facility would decrease to $300.0 million on June 22, 2019.
(2)Financing made available only to a specified subsidiary of the Company.
(3)Interest rate cap agreements are in place to limit the exposure to increasing interest rates.
(4)Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date based on the cash flows of the pledged assets.
(5)Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on August 18, 2021 will be due on that date.


(Dollars in millions)     
FinancingsWholly Owned
Subsidiary		Maturity DateFinancing
Amount		Interest Rate Basis as of  
March 31, 2024
Revolving Secured Line of Credit Facilityn/a06/22/2026 $390.0 At our option, either the Bloomberg Short-Term Bank Yield Index rate (BSBY) plus 187.5 basis points or the prime rate plus 87.5 basis points
RTP Facilityn/a—(1)20.0 BSBY plus 187.5 basis points
Warehouse Facility II (2)CAC Warehouse Funding LLC II04/30/2026(3)400.0 The Secured Overnight Financing Rate (SOFR) plus 230 basis points
Warehouse Facility IV (2)CAC Warehouse Funding LLC IV12/29/2026(3)300.0 SOFR plus 221.4 basis points (4)
Warehouse Facility V (2)CAC Warehouse Funding LLC V12/29/2025(5)200.0 SOFR plus 245 basis points (4)
Warehouse Facility VI (2)CAC Warehouse Funding LLC VI09/30/2026(3)75.0 BSBY plus 200 basis points
Warehouse Facility VIII (2)CAC Warehouse Funding LLC VIII09/21/2026(3)200.0 SOFR plus 225.0 basis points (4)
Term ABS 2019-2 (2)Credit Acceptance Funding LLC 2019-208/15/2025(6)500.0 Fixed rate
Term ABS 2021-1 (2)Credit Acceptance Funding LLC 2021-102/17/2026(6)100.0 SOFR plus 220 basis points (4)
Term ABS 2021-2 (2)Credit Acceptance Funding LLC 2021-202/15/2023(3)500.0 Fixed rate
Term ABS 2021-3 (2)Credit Acceptance Funding LLC 2021-305/15/2023(3)450.0 Fixed rate
Term ABS 2021-4 (2)Credit Acceptance Funding LLC 2021-410/16/2023(3)250.1 Fixed rate
Term ABS 2022-1 (2)Credit Acceptance Funding LLC 2022-106/17/2024(3)350.0 Fixed rate
Term ABS 2022-2 (2)Credit Acceptance Funding LLC 2022-212/15/2025(6)200.0 SOFR plus 235 basis points (4)
Term ABS 2022-3 (2)Credit Acceptance Funding LLC 2022-310/15/2024(3)389.9 Fixed rate
Term ABS 2023-1 (2)Credit Acceptance Funding LLC 2023-103/17/2025(3)400.0 Fixed rate
Term ABS 2023-2 (2)Credit Acceptance Funding LLC 2023-25/15/2025(3)400.0 Fixed rate
Term ABS 2023-3 (2)Credit Acceptance Funding LLC 2023-38/15/2025(3)400.0 Fixed rate
Term ABS 2023-A (2)Credit Acceptance Funding LLC 2023-A12/15/2025(6)200.0 Fixed rate
Term ABS 2023-5 (2)Credit Acceptance Funding LLC 2023-512/15/2025(3)294.0 Fixed rate
Term ABS 2024-A (2)Credit Acceptance Funding LLC 2024-A02/15/2027(6)200.0 Fixed rate
Term ABS 2024-1 (2)Credit Acceptance Funding LLC 2024-103/16/2026(3)500.0 Fixed rate
2026 Senior Notesn/a03/15/2026400.0 Fixed rate
2028 Senior Notesn/a12/15/2028600.0 Fixed rate
Mortgage Note (2)Chapter 4 Properties, LLC08/06/20289.0 BSBY plus 150 basis points
24
29



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

(1)Borrowings are subject to repayment on demand.
(2)Financing made available only to a specified subsidiary of the Company.
(3)Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date based on the cash flows of the pledged assets.
(4)Interest rate cap agreements are in place to limit the exposure to increasing interest rates.
(5)Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on December 27, 2027 will be due on that date.
(6)Represents the revolving maturity date. The Company has the option to redeem and retire the indebtedness after the revolving maturity date. If we do not elect this option, the outstanding balance will amortize based on the cash flows of the pledged assets.


Additional information related to the amounts outstanding on each facility is as follows:
(In millions)For the Three Months Ended 
March 31,
 20242023
Revolving Secured Lines of Credit  
Maximum outstanding principal balance$328.0 $306.8 
Average outstanding principal balance166.8 123.0 
Warehouse Facility II  
Maximum outstanding principal balance201.0 201.0 
Average outstanding principal balance128.1 19.0 
Warehouse Facility IV  
Maximum outstanding principal balance— — 
Average outstanding principal balance— — 
Warehouse Facility V
Maximum outstanding principal balance— — 
Average outstanding principal balance— — 
Warehouse Facility VI
Maximum outstanding principal balance60.0 — 
Average outstanding principal balance29.7 — 
Warehouse Facility VIII
Maximum outstanding principal balance100.0 — 
Average outstanding principal balance30.8 — 
(In millions)For the Three Months Ended 
 September 30,		 For the Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Revolving Secured Line of Credit       
Maximum outstanding principal balance$130.5
 $92.1
 $276.7
 $186.4
Average outstanding principal balance35.7
 13.3
 92.2
 30.6
Warehouse Facility II       
Maximum outstanding principal balance$—
 $—
 $263.4
 $200.1
Average outstanding principal balance—
 —
 3.4
 3.7
Warehouse Facility IV       
Maximum outstanding principal balance$—
 $12.0
 $12.0
 $12.0
Average outstanding principal balance—
 12.0
 7.8
 12.0
Warehouse Facility V       
Maximum outstanding principal balance$—
 $—
 $100.0
 $100.0
Average outstanding principal balance—
 —
 10.4
 1.4
Warehouse Facility VI       
Maximum outstanding principal balance$—
 $—
 $75.0
 $49.9
Average outstanding principal balance—
 —
 9.8
 4.0



25
30



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)


(Dollars in millions)As of
 March 31, 2024December 31, 2023
Revolving Secured Lines of Credit  
Principal balance outstanding$169.5 $79.2 
Amount available for borrowing (1)240.5 330.8 
Interest rate7.22 %7.33 %
Warehouse Facility II  
Principal balance outstanding$— $— 
Amount available for borrowing (1)400.0 400.0 
Loans pledged as collateral— — 
Restricted cash and cash equivalents pledged as collateral2.0 1.0 
Interest rate— %— %
Warehouse Facility IV  
Principal balance outstanding$— $— 
Amount available for borrowing (1)300.0 300.0 
Loans pledged as collateral— — 
Restricted cash and cash equivalents pledged as collateral1.0 1.5 
Interest rate— %— %
Warehouse Facility V
Principal balance outstanding$— $— 
Amount available for borrowing (1)200.0 200.0 
Loans pledged as collateral— — 
Restricted cash and cash equivalents pledged as collateral1.0 1.0 
Interest rate— %— %
Warehouse Facility VI
Principal balance outstanding$60.0 $— 
Amount available for borrowing (1)15.0 75.0 
Loans pledged as collateral76.5 — 
Restricted cash and cash equivalents pledged as collateral2.2 — 
Interest rate7.37 %— %
Warehouse Facility VIII  
Principal balance outstanding$— $— 
Amount available for borrowing (1)200.0 200.0 
Loans pledged as collateral— — 
Restricted cash and cash equivalents pledged as collateral1.0 0.8 
Interest rate— %— %
Term ABS 2019-2
Principal balance outstanding$500.0 $500.0 
Loans pledged as collateral547.4 597.3 
Restricted cash and cash equivalents pledged as collateral49.1 47.6 
Interest rate5.15 %5.15 %
Term ABS 2020-3
Principal balance outstanding$— $110.3 
Loans pledged as collateral— 418.4 
Restricted cash and cash equivalents pledged as collateral— 42.3 
Interest rate— %2.06 %
31
(Dollars in millions)As of
 September 30, 2017 December 31, 2016
Revolving Secured Line of Credit   
Principal balance outstanding$130.5
 $—
Amount available for borrowing (1)214.5
 310.0
Interest rate3.11% —%
Warehouse Facility II   
Principal balance outstanding$—
 $—
Amount available for borrowing (1)400.0
 400.0
Loans pledged as collateral—
 —
Restricted cash and cash equivalents pledged as collateral1.2
 1.5
Interest rate—% —%
Warehouse Facility IV   
Principal balance outstanding$—
 $12.0
Amount available for borrowing (1)100.0
 63.0
Loans pledged as collateral—
 23.0
Restricted cash and cash equivalents pledged as collateral1.1
 0.9
Interest rate—% 2.77%
Warehouse Facility V   
Principal balance outstanding$—
 $—
Amount available for borrowing (1)100.0
 100.0
Loans pledged as collateral—
 —
Restricted cash and cash equivalents pledged as collateral1.1
 1.0
Interest rate—% —%
Warehouse Facility VI   
Principal balance outstanding$—
 $—
Amount available for borrowing (1)75.0
 75.0
Loans pledged as collateral—
 —
Restricted cash and cash equivalents pledged as collateral0.1
 0.1
Interest rate—% —%
Term ABS 2014-1   
Principal balance outstanding$—
 $106.5
Loans pledged as collateral—
 307.2
Restricted cash and cash equivalents pledged as collateral—
 28.3
Interest rate—% 2.02%
Term ABS 2014-2   
Principal balance outstanding$46.7
 $267.6
Loans pledged as collateral290.7
 413.9
Restricted cash and cash equivalents pledged as collateral30.6
 34.9
Interest rate2.67% 2.10%
Term ABS 2015-1   
Principal balance outstanding$129.5
 $300.6
Loans pledged as collateral271.6
 374.5
Restricted cash and cash equivalents pledged as collateral26.7
 29.6
Interest rate2.60% 2.26%
    


26


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

(Dollars in millions)As of
March 31, 2024December 31, 2023
Term ABS 2021-1
Principal balance outstanding$100.0 $100.0 
Loans pledged as collateral114.1 112.8 
Restricted cash and cash equivalents pledged as collateral10.1 8.8 
Interest rate7.53 %7.56 %
Term ABS 2021-2
Principal balance outstanding$109.3 $188.2 
Loans pledged as collateral370.5 415.5 
Restricted cash and cash equivalents pledged as collateral39.2 37.3 
Interest rate1.58 %1.38 %
Term ABS 2021-3
Principal balance outstanding$193.2 $265.0 
Loans pledged as collateral351.6 396.3 
Restricted cash and cash equivalents pledged as collateral35.2 33.8 
Interest rate1.33 %1.24 %
Term ABS 2021-4
Principal balance outstanding$178.1 $221.6 
Loans pledged as collateral235.4 255.2 
Restricted cash and cash equivalents pledged as collateral21.9 21.0 
Interest rate1.51 %1.46 %
Term ABS 2022-1
Principal balance outstanding$350.0 $350.0 
Loans pledged as collateral376.7 378.2 
Restricted cash and cash equivalents pledged as collateral30.2 27.4 
Interest rate5.03 %5.03 %
Term ABS 2022-2
Principal balance outstanding$200.0 $200.0 
Loans pledged as collateral209.7 212.1 
Restricted cash and cash equivalents pledged as collateral16.5 14.7 
Interest rate7.66 %7.66 %
Term ABS 2022-3
Principal balance outstanding$389.9 $389.9 
Loans pledged as collateral421.0 418.9 
Restricted cash and cash equivalents pledged as collateral32.1 28.9 
Interest rate7.68 %7.68 %
Term ABS 2023-1
Principal balance outstanding$400.0 $400.0 
Loans pledged as collateral583.3 611.6 
Restricted cash and cash equivalents pledged as collateral40.9 38.5 
Interest rate6.92 %6.92 %
Term ABS 2023-2
Principal balance outstanding$400.0 $400.0 
Loans pledged as collateral684.4 701.7 
Restricted cash and cash equivalents pledged as collateral46.1 42.0 
Interest rate6.39 %6.39 %
32


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
Term ABS 2015-2   
(Dollars in millions)(Dollars in millions)As of
March 31, 2024March 31, 2024December 31, 2023
Term ABS 2023-3
Principal balance outstanding
Principal balance outstanding
Principal balance outstanding$278.3
 $300.2
Loans pledged as collateral351.2
 372.6
Restricted cash and cash equivalents pledged as collateral30.2
 28.1
Interest rate2.65% 2.63%Interest rate6.86 %6.86 %
Term ABS 2016-1   
Term ABS 2023-A
Principal balance outstanding
Principal balance outstanding
Principal balance outstanding$385.0
 $385.0
Loans pledged as collateral465.0
 474.0
Restricted cash and cash equivalents pledged as collateral38.5
 34.8
Interest rate3.18% 2.65%Interest rate7.51 %7.51 %
Term ABS 2016-2   
Term ABS 2023-5
Principal balance outstanding
Principal balance outstanding
Principal balance outstanding$350.2
 $350.2
Loans pledged as collateral425.2
 490.7
Restricted cash and cash equivalents pledged as collateral34.6
 34.4
Interest rate2.83% 2.83%Interest rate6.54 %6.54 %
Term ABS 2016-3   
Term ABS 2024-A
Principal balance outstanding
Principal balance outstanding
Principal balance outstanding$350.0
 $350.0
Loans pledged as collateral425.1
 489.6
Restricted cash and cash equivalents pledged as collateral33.4
 30.6
Interest rate2.53% 2.53%Interest rate7.45 %— %
Term ABS 2017-1   
Term ABS 2024-1
Principal balance outstanding
Principal balance outstanding
Principal balance outstanding$350.0
 $—
Loans pledged as collateral426.2
 —
Restricted cash and cash equivalents pledged as collateral33.2
 —
Interest rate2.78% —%Interest rate6.01 %— %
Term ABS 2017-2   
2026 Senior Notes
Principal balance outstanding$450.0
 $—
Loans pledged as collateral550.8
 —
Restricted cash and cash equivalents pledged as collateral42.2
 —
Interest rate2.72% —%
2021 Senior Notes   
Principal balance outstanding
Principal balance outstanding$300.0
 $300.0
Interest rate6.125% 6.125%Interest rate6.625 %6.625 %
2023 Senior Notes   
2028 Senior Notes
Principal balance outstanding
Principal balance outstanding
Principal balance outstanding$250.0
 $250.0
Interest rate7.375% 7.375%Interest rate9.250 %9.250 %
Mortgage Note
Principal balance outstanding
Principal balance outstanding
Principal balance outstanding
Interest rateInterest rate6.87 %6.88 %
(1)Availability may be limited by the amount of assets pledged as collateral.

(1)Availability may be limited by the amount of assets pledged as collateral.

Revolving Secured LineLines of Credit Facility


We have two revolving secured lines of credit: (1) a $390.0 million revolving secured line of credit facility, to which we refer as our revolving secured line of credit facility, with a commercial bank syndicate that as of September 30, 2017 provided for borrowings of up to $345.0 million. Under the terms of theand (2) an uncommitted $20.0 million revolving secured line of credit facility, to which we refer as the RTP facility, with a lender for use solely in facilitating payments by the Company through the lender’s real-time payments service.


33


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
Borrowings under theour revolving secured line of credit facility, including any letters of credit issued under the facility, are subject to a borrowing-base limitation. This limitation equals 80% of the net book value of Loans, as defined in the agreement governing our revolving secured line of credit facility, less a hedging reserve (not exceeding $1.0 million), and the amount of other debt secured by the collateral whichthat secures theour revolving secured line of credit facility. Borrowings under theour revolving secured line of credit facility agreement are secured by a lien on most of our assets.assets that do not secure obligations under our Warehouse facilities or Term ABS financings.



Borrowings under the RTP facility are secured by a lien on the same collateral that secures obligations under our revolving secured line of credit facility. The RTP facility terminates automatically if the lender ceases to be part of the commercial bank syndicate under our revolving secured line of credit facility or if its lending commitments under our revolving secured line of credit facility are terminated.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

Warehouse Facilities


We have fourfive Warehouse facilities with total borrowing capacity of $675.0$1,175.0 million. Each of the facilities areis with a different lender or group of lenders. Under each Warehouse facility, we can contributeconvey Loans to our wholly-owned subsidiariesthe applicable wholly owned subsidiary in return for cash andand/or an increase in the value of our equity in eachsuch subsidiary. In turn, each such subsidiary pledges the Loans as collateral to lenders to secure financing that will fund the cash portion of the purchase price of the Loans. The financing provided to each such subsidiary under the applicable facility is generally limited to the lesser of 80% of the net book valueoutstanding balance of the contributedconveyed Loans, as determined in accordance with the applicable agreement, plus thecertain restricted cash and cash equivalents pledged as collateral, on such Loans or the facility limit.


The financings create indebtedness for which the subsidiaries are liable and which is secured by all the assets of each subsidiary. Such indebtedness is non-recourse to us (other than customary, limited recourse to us in the form of repurchase obligations or indemnification obligations for any violations by us of our representations or obligations as seller, servicer, or custodian), even though we are consolidated for financial reporting purposes with the subsidiaries. Because the subsidiaries are organized as bankruptcy-remote legal entities separate from us, their assets (including the contributedconveyed Loans) are not available to our creditors.any creditors other than the creditors of the applicable subsidiary.


The subsidiaries pay us a monthly servicing fee equal to either 4% or 6%, depending upon the facility, of the collections received with respect to the contributedconveyed Loans. The servicing fee is paid out of the collections. Except for the servicing fee and holdback payments due to Dealers, if a facility is amortizing, we do not have any rights in any portion of such collections until all outstanding principal, accrued and unpaid interest, fees, and other related costs have been paid in full. If a facility is not amortizing,in its revolving period, the applicable subsidiary may beis entitled to retain athe portion of such collections available after the payment of interest and transaction expenses under the facility, provided that the borrowing base requirements of the facility are satisfied.


Term ABS Financings


We have wholly-ownedwholly owned subsidiaries (the “Funding LLCs”) that have completed secured financing transactions with qualified institutional investors or lenders. In connection with each of these transactions, we contributedconveyed Loans on an arms-length basis to eacha Funding LLC for cash and the sole membership interest in that Funding LLC. In turn, each Funding LLC, other than that ofthe Funding LLCs for the Term ABS 2016-1, contributed2019-2, 2021-1, 2022-2, and 2023-A financings, conveyed the Loans to athe respective trusttrusts that issued notes to qualified institutional investors. The Funding LLCLLCs for the Term ABS 2016-1 transaction2019-2, 2021-1, 2022-2, and 2023-A financings pledged the Loans tofor the benefit of their respective lenders. The Term ABS 2014-2, 2015-1, 2015-2, 2016-2, 2016-3, 2017-12021-2, 2021-3, 2021-4, 2023-1, 2023-2, 2023-3, 2023-A, 2023-5, 2024-A, and 2017-2 transactions2024-1 financings each consist of three classes of notes. The Class C Notes fornotes (or, in the case of the Term ABS 2014-2 do not bear interest2023-A, three classes of loans), while the Term ABS 2022-1 and have been retained by us.Term ABS 2022-3 financings consist of four classes of notes. 


Each Term ABS financing at the time of issuance has a specified revolving period during which we may be required, and are likely to contributeconvey additional Loans to eachthe applicable Funding LLC. If applicable, eachEach Funding LLC (other than the Funding LLCs of the Term ABS 2019-2, 2021-1, 2022-2, and 2023-A financings) will then contributeconvey the Loans to theirits respective trust.  At the end of the applicable revolving period, the debt outstanding under each financing will begin to amortize.



34


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
The Term ABS financings create indebtedness for which the trustsapplicable trust or Funding LLC areis liable and which is secured by all the assets of eachthe applicable trust or Funding LLC. Such indebtedness is non-recourse to us (other than customary, limited recourse to us in the form of repurchase obligations or indemnification obligations for any violations by us of our representations or obligations as seller, servicer, or custodian), even though we are consolidated for financial reporting purposes with the trusts and the Funding LLCs. Because the trusts and the Funding LLCs are organized as bankruptcy-remote legal entities separate from us, their assets (including the contributedconveyed Loans) are not available to our creditors.any creditors other than the creditors of the applicable subsidiary. We receive a monthly servicing fee on each financing equal to either 4% or 6%, depending upon the financing, of the collections received with respect to the contributedconveyed Loans. The fee is paid out of the collections. Except for the servicing fee and Dealer Holdback payments due to Dealers, if a facilityTerm ABS financing is amortizing, we do not have any rights in any portion of such collections until all outstanding principal, accrued and unpaid interest, fees, and other related costs have been paid in full. If a facilityTerm ABS financing is not amortizing,in its revolving period, the applicable subsidiary may betrust or Funding LLC is entitled to retain athe portion of such collections available after application of any amounts necessary to acquire additional Loans from us and to pay accrued interest on the debt and any other transaction expenses, provided that any necessary principal payments are made to compensate for certain reductions in the borrowing base requirementsbalance of eligible loans or, in the facility are satisfied. However,case of Term ABS financings occurring after the Term ABS 2021-3 financing, certain reductions in forecasted collections. In addition, in our capacity as servicer of the Loans, we do have a limited right to exercise a “clean-up call” option to purchase Loans from the Funding LLCs and/or the trusts under certain specified circumstances. For those Funding LLCs with a trust, when the trust’s underlying indebtedness is paid in full, either through collections or through a prepayment of the indebtedness, the trust is to pay any remaining collections over to its Funding LLC as the sole beneficiary of the trust. For all Funding LLCs, after the indebtedness is paid in full, any remaining collections will ultimately be available to be distributed to us as the sole member of the respective Funding LLC.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)


The table below sets forth certain additional details regarding the outstanding Term ABS financings:
(Dollars in millions)
Term ABS FinancingsClosing DateNet Book Value of Loans
Conveyed at Closing		Revolving Period
Term ABS 2019-2August 28, 2019$625.1 Through August 15, 2025
Term ABS 2021-1January 29, 2021125.1 Through February 17, 2026
Term ABS 2021-2February 18, 2021625.1 Through February 15, 2023
Term ABS 2021-3May 20, 2021562.6 Through May 15, 2023
Term ABS 2021-4October 28, 2021312.6 Through October 16, 2023
Term ABS 2022-1June 16, 2022437.6 Through June 17, 2024
Term ABS 2022-2December 15, 2022250.1 Through December 15, 2025
Term ABS 2022-3November 3, 2022500.1 Through October 15, 2024
Term ABS 2023-1March 16, 2023500.2 Through March 17, 2025
Term ABS 2023-2May 25, 2023500.1 Through May 15, 2025
Term ABS 2023-3August 24, 2023500.1 Through August 15, 2025
Term ABS 2023-ANovember 30, 2023252.0 Through December 15, 2025
Term ABS 2023-5December 21, 2023375.1 Through December 15, 2025
Term ABS 2024-AFebruary 27, 2024250.1 Through February 15, 2027
Term ABS 2024-1March 28, 2024625.2 Through March 16, 2026
(Dollars in millions)      
Term ABS Financings Close Date 
Net Book Value of Loans
Contributed at Closing
 24 month Revolving Period
Term ABS 2014-2 September 25, 2014 $437.6
 Through September 15, 2016
Term ABS 2015-1 January 29, 2015 $375.9
 Through January 16, 2017
Term ABS 2015-2 August 20, 2015 $375.5
 Through August 15, 2017
Term ABS 2016-1 February 26, 2016 $481.4
 Through February 15, 2018
Term ABS 2016-2 May 12, 2016 $437.8
 Through May 15, 2018
Term ABS 2016-3 October 27, 2016 $437.8
 Through October 15, 2018
Term ABS 2017-1 February 23, 2017 $437.8
 Through February 15, 2019
Term ABS 2017-2 June 29, 2017 $563.2
 Through June 17, 2019


Senior Notes


On March 30, 2015,December 19, 2023, we issued $250.0$600.0 million aggregate principal amount of 7.375%9.250% senior notes due 20232028 (the “2023“2028 senior notes”). The 20232028 senior notes were issued pursuant to an indenture, dated as of March 30, 2015,December 19, 2023, among the Company, as issuer, the Company’s subsidiaries Buyers Vehicle Protection Plan, Inc. and Vehicle Remarketing Services, Inc., as guarantors (collectively, the “Guarantors”), and U.S. Bank National Association, as trustee.the trustee under the indenture.



35


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
The 20232028 senior notes mature on MarchDecember 15, 20232028 and bear interest at a rate of 7.375%9.250% per annum, computed on the basis of a 360-day year composed of twelve 30-day months and payable semi-annually on June 15 and December 15 of each year, beginning on June 15, 2024. We used a portion of the net proceeds from the 2028 senior notes to repurchase or redeem all of the $400.0 million outstanding principal amount of our 5.125% senior notes due 2024 (the “2024 senior notes”), of which $322.3 million was repurchased on December 19, 2023 and the remaining $77.7 million was redeemed on December 31, 2023. We used the remaining net proceeds from the 2028 senior notes for general corporate purposes. During the fourth quarter of 2023, we recognized a pre-tax loss on extinguishment of debt of $1.8 million related to the repurchase and redemption of the 2024 senior notes.

On March 7, 2019, we issued $400.0 million aggregate principal amount of 6.625% senior notes due 2026 (the “2026 senior notes”). The 2026 senior notes were issued pursuant to an indenture, dated as of March 7, 2019, among the Company, as issuer, the Guarantors, and the trustee under the indenture.

The 2026 senior notes mature on March 15, 2026 and bear interest at a rate of 6.625% per annum, computed on the basis of a 360-day year composed of twelve 30-day months and payable semi-annually on March 15 and September 15 of each year, beginning on September 15, 2015. The 2023 senior notes were issued at a price of 99.266% of their aggregate principal amount, resulting in gross proceeds of $248.2 million, and a yield to maturity of 7.5% per annum.2019. We used the net proceeds from the offering of the 2026 senior notes for general corporate purposes, including repayment of outstanding borrowings under our revolving secured line of credit facility.


On January 22, 2014, we issued $300.0 million aggregate principal amount of 6.125%The 2028 senior notes due 2021 (the “2021 senior notes”). The 2021 senior notes were issued pursuant to an indenture, dated as of January 22, 2014, among the Company, the Guarantors, and U.S. Bank National Association, as trustee.

The 2021 senior notes mature on February 15, 2021 and bear interest at a rate of 6.125% per annum, computed on the basis of a 360-day year composed of twelve 30-day months and payable semi-annually on February 15 and August 15 of each year, beginning on August 15, 2014. We used the net proceeds from the 2021 senior notes, together with borrowings under our revolving credit facilities, to redeem in full the $350.0 million aggregate principal amount of our 9.125% first priority senior secured notes due 2017 on February 21, 2014.

Both the 2021 and the 20232026 senior notes (the "senior notes"“senior notes”) are guaranteed on a senior basis by the Guarantors, which are also guarantors of obligations under our revolving secured line of credit facility. Other existing and future subsidiaries of ours may become guarantors of the senior notes in the future. The indentures for the senior notes provide for a guarantor of the senior notes to be released from its obligations under its guarantee of the senior notes under specified circumstances.


Mortgage Note

We have a $9.0 million mortgage note with a commercial bank that is secured by a first mortgage lien on a building acquired by us and an assignment of all leases, rents, revenues, and profits under all present and future leases of the building. The note matures on August 6, 2028, and bears interest at BSBY plus 150 basis points.

Debt Covenants


As of September 30, 2017,March 31, 2024, we were in compliance with our covenants under theour revolving secured line of credit facility and our Warehouse facilities, including those that require the maintenance of certain financial ratios and other financial conditions. These covenants require a minimum ratio of (1) our net earnings, adjusted for specified items, before income taxes, depreciation, amortization, and fixed charges to (2) our fixed charges.charges, as defined in the agreements. These covenants also limit the maximum ratio of our funded debt less unrestricted cash and cash equivalents to tangible net worth. Additionally, we must maintain consolidated net income of not less than $1 for the two most recently ended fiscal quarters. Some of these covenants may indirectly limit the repurchase of common stock or payment of dividends on common stock.

Our Warehouse facilities andalso contain covenants that measure the performance of the conveyed assets.

Our Term ABS financings also contain covenants that measure the performance of the contributedconveyed assets. As of September 30, 2017,March 31, 2024, we were in compliance with all such covenants. As of the end of the quarter, we were also in compliance with our covenants under the senior notes indentures.indentures and the RTP facility.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

9.11.           DERIVATIVE AND HEDGING INSTRUMENTS


Interest Rate Caps. We utilize interest rate cap agreements to manage the interest rate risk on certain secured financings. The following tables provide the terms of our interestrate cap agreements that were in effect as of September 30, 2017March 31, 2024 and December 31, 2016:2023:
(Dollars in millions)
As of March 31, 2024
Facility AmountFacility NamePurposeStartEndNotionalCap Interest Rate (1)
$300.0 Warehouse Facility IVCap Floating Rate05/202311/2024$300.0 7.50 %
200.0 Warehouse Facility VCap Floating Rate04/202301/202683.0 5.44 %
200.0 Warehouse Facility VIIICap Floating Rate09/202209/2025200.0 5.42 %
100.0 Term ABS 2021-1Cap Floating Rate04/202306/202418.8 5.46 %
200.0 Term ABS 2022-2Cap Floating Rate12/202206/2024200.0 6.50 %
(Dollars in millions)          
As of September 30, 2017
Facility Amount Facility Name Purpose Start End Notional Cap Interest Rate (1)
$400.0
 Warehouse Facility II Cap Floating Rate 06/2016 12/2017 $325.0
 5.50%
             
100.0
 Warehouse Facility IV Cap Floating Rate 04/2016 04/2019 75.0
 5.50%
    Cap Floating Rate 05/2017 04/2021 25.0
 6.50%
          100.0
  
             
100.0
 Warehouse Facility V Cap Floating Rate 06/2015 07/2018 75.0
 5.50%
385.0
 Term ABS 2016-1 Cap Floating Rate 04/2016 02/2019 385.0
 5.00%


(Dollars in millions)
As of December 31, 2023
Facility AmountFacility NamePurposeStartEndNotionalCap Interest Rate (1)
$300.0 Warehouse Facility IVCap Floating Rate05/202311/2024$300.0 7.50 %
200.0 Warehouse Facility VCap Floating Rate04/202301/202694.0 5.44 %
200.0 Warehouse Facility VIIICap Floating Rate09/20229/2025200.0 5.42 %
100.0 Term ABS 2021-1Cap Floating Rate04/202306/202437.5 5.46 %
200.0 Term ABS 2022-2Cap Floating Rate12/202206/2024200.0 6.50 %

(Dollars in millions)          
As of December 31, 2016
Facility Amount Facility Name Purpose Start End Notional Cap Interest Rate (1)
$400.0
 Warehouse Facility II Cap Floating Rate 06/2016 12/2017 $325.0
 5.50%
             
75.0
 Warehouse Facility IV Cap Floating Rate 03/2014 03/2017 18.8
 5.50%
    Cap Floating Rate 04/2016 04/2019 56.2
 5.50%
          75.0
  
             
100.0
 Warehouse Facility V Cap Floating Rate 06/2015 07/2018 75.0
 5.50%
385.0
 Term ABS 2016-1 Cap Floating Rate 04/2016 02/2019 385.0
 5.00%
(1)Rate excludes the spread over the corresponding benchmark rate.

(1)Rate excludes the spread over the LIBOR rate.


The interest rate caps have not been designated as hedging instruments. As of September 30, 2017March 31, 2024 and December 31, 2016,2023, the interest rate caps had a fair value of $0.0$0.1 million, as the capped rates were significantly above market rates.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)

10.           RELATED PARTY TRANSACTIONS

In the normal course of our business, affiliated Dealers assigned Consumer Loans to us under the Portfolio and Purchase Programs.  Dealer Loans and Purchased Loans with affiliated Dealers were on the same terms as those with non-affiliated Dealers. Affiliated Dealers were comprised of Dealers owned or controlled by: (1) Donald Foss, our founder, significant shareholder and former Chairman of the Board; and (2) a member of Mr. Foss’s immediate family.

On January 3, 2017, Mr. Foss retired as officer, director and employee of the Company and entered into a shareholder agreement with the Company. Under the shareholder agreement, Mr. Foss agreed, until the final adjournment of the tenth annual meeting of shareholders held by the Company after the date of the shareholder agreement, to cause all shares of the Company beneficially owned by him or any of his affiliates or associates to be voted in accordance with the recommendation of the Company’s Board of Directors with respect to election and removal of directors, certain routine matters and any other proposal to be submitted to the Company’s shareholders with respect to any extraordinary transaction providing for the acquisition of all of the Company’s outstanding common stock. As a result, effective January 3, 2017, we no longer consider the remaining Dealers owned or controlled by Mr. Foss or a member of Mr. Foss’s immediate family to be affiliated with us while Mr. Foss’s voting interests in the Company are subject to the voting restrictions under the shareholder agreement and accordingly, we have excluded these Dealers from the affiliated amounts reported effective January 3, 2017.

On June 7, 2016, Mr. Foss sold certain affiliated Dealers previously owned or controlled by him to a third party. As a result, we no longer consider these Dealers to be affiliated and accordingly, we have excluded these Dealers from the affiliated amounts reported effective June 7, 2016.

Affiliated Dealer Loan balances were $0.0 million and $1.4 million as of September 30, 2017 and December 31, 2016, respectively. As of September 30, 2017 and December 31, 2016, affiliated Dealer Loan balances were 0.0% of total consolidated Dealer Loan balances. 

There was no related party Loan activity during 2017. The following table summarizes our related party Loan activity for the three and nine months ended September 30, 2016:
(Dollars in millions) For the Three Months Ended September 30, 2016 For the Nine Months Ended September 30, 2016
  
Affiliated
 Dealer
 activity
 
% of
consolidated
 
Affiliated
 Dealer
 activity
 
% of
consolidated
Dealer Loan revenue (1) $—
 —% $1.2
 0.2%
New Consumer Loan assignments (1) (2) —
 —% 8.9
 0.4%
Accelerated Dealer Holdback payments (1) —
 —% 0.2
 0.5%
Dealer Holdback payments (1) 0.2
 0.6% 0.8
 0.7%

(1)We have reclassified related party transactions to reflect the June 2016 sale of certain affiliated Dealers by our founder, significant shareholder and former Chairman of the Board.
(2)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.


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(UNAUDITED)

11.12.         INCOME TAXES


A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows:
 For the Three Months Ended 
March 31,
 20242023
U.S. federal statutory income tax rate21.0 %21.0 %
State and local income taxes3.7 %3.2 %
Non-deductible executive compensation expense1.3 %1.4 %
Excess tax benefits from stock-based compensation-0.6 %-4.2 %
Other0.2 %0.1 %
Effective income tax rate25.6 %21.5 %
 For the Three Months Ended 
 September 30,		 For the Nine Months Ended 
 September 30,
 2017 2016 2017 2016
U.S. federal statutory rate35.0% 35.0% 35.0 % 35.0%
    State income taxes1.9% 1.7% 1.8 % 1.8%
Excess tax benefits from stock-based compensation plans—% —% -0.5 % —%
    Other0.2% 0.4% 0.2 % 0.3%
Effective tax rate37.1% 37.1% 36.5 % 37.1%


The differences between the U.S. federal statutory rate and our effective tax rate are primarily due to state income taxes and excessExcess tax benefits from stock-based compensation plans. The decrease in the effective tax rate for the nine months ended September 30, 2017 is primarily due to the adoption of ASU 2016-09 on January 1, 2017, which changed where we

We recognize excess tax benefits and deficiencies from stock-based compensation plans in our consolidated financial statements on a prospective basis. We receive a tax deduction upon the vesting of restricted stock and the conversion of restricted stock units to common stock based on the fair value of the shares. The amount that this tax deduction differs from the grant-date fair value that was recognized as stock-based compensation expense is referred to as an excess tax benefit or deficiency. Fortax deficiency when the nine months ended September 30, 2017,deduction for the stock-based compensation expense of a stock award for tax purposes differs from the cumulative stock-based compensation expense recognized in the financial statements. The excess tax benefits of $2.5 million werebenefit or tax deficiency is recognized in provision for income taxes thus reducingin the period in which the amount of the deduction is determined, which is when restricted stock units are settled in common stock or stock options are exercised. Excess tax benefits reduce our effective income tax rate, while tax deficiencies increase our effective income tax rate. For the nine months ended September 30, 2016,The impact of excess tax benefits of $27.2 million were recognized in paid-in capital in our consolidated balance sheets, which had no impact on our effective income tax rate.rate for the three months ended March 31, 2024 decreased from the same period in 2023 primarily due to a decrease in the number of restricted stock units that were settled in common stock during the first quarter of 2023 due to the timing of long-term stock award grants.


12.13.         NET INCOME PER SHARE


Basic net income per share has been computed by dividing net income by the basic number of weighted average shares outstanding. Diluted net income per share has been computed by dividing net income by the diluted number of weighted average shares outstanding using the treasury stock method. The share effect is as follows:

 For the Three Months Ended 
March 31,
 20242023
Weighted average shares outstanding:  
Common shares12,318,007 12,809,883 
Vested restricted stock units163,132 247,734 
Basic number of weighted average shares outstanding12,481,139 13,057,617 
Dilutive effect of restricted stock units and stock options165,390 15,699 
Dilutive number of weighted average shares outstanding12,646,529 13,073,316 

 For the Three Months Ended 
 September 30,		 For the Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Weighted average shares outstanding:       
    Common shares19,150,749
 20,159,197
 19,277,014
 20,116,250
    Vested restricted stock units256,595
 220,360
 251,161
 281,787
Basic number of weighted average shares outstanding19,407,344
 20,379,557
 19,528,175
 20,398,037
    Dilutive effect of restricted stock and restricted stock units8,201
 5,067
 19,499
 17,944
Dilutive number of weighted average shares outstanding19,415,545
 20,384,624
 19,547,674
 20,415,981

For the three months ended September 30, 2017 and September 30, 2016, thereThe following outstanding stock awards were no shares of restricted stock or restricted stock units that would have been anti-dilutive. For the nine months ended September 30, 2017 and September 30, 2016, there were 250 and 7,368 shares of restricted stock, respectively, that were not included inexcluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive.anti-dilutive:

For the Three Months Ended 
March 31,
20242023
Stock options51,750 345,585 
Restricted stock units3,017 11,409 
Total54,767 356,994 


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(UNAUDITED)

13.14.         STOCK REPURCHASES


There were no stock repurchases for the three months ended September 30, 2017 and 2016. The following table summarizes our stock repurchases for the ninethree months ended September 30, 2017March 31, 2024 and 2016:2023:
(Dollars in millions)For the Three Months Ended March 31,
20242023
Stock RepurchasesNumber of Shares RepurchasedCost (1)Number of Shares RepurchasedCost (1)
Open Market (2)349,256 $189.9 — $— 
Other (3)2,112 1.2 33,035 14.9 
Total351,368 $191.1 33,035 $14.9 

(1)    Total cost of repurchases includes excise tax.
(2)     Represents repurchases under authorizations by the board of directors for the repurchase of shares by us from time to time in the open market through privately negotiated transactions, through block trades, pursuant to trading plans adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, or otherwise. On August 21, 2023, the board of directors authorized the repurchase of up to two million shares of our common stock in addition to the board’s prior authorizations. As of March 31, 2024, we had authorization to repurchase 1,456,751 shares of our common stock.
(3)     Represents shares of common stock released to us by team members as payment of tax withholdings upon the vesting of restricted stock units and the conversion of restricted stock units to common stock.

(Dollars in millions) For the Nine Months Ended September 30,
  2017 2016
Stock Repurchases Number of Shares Repurchased Cost Number of Shares Repurchased Cost
Open Market (1) 588,580
 $119.1
 45,300
 $7.6
Other (2) 21,680
 4.4
 170,668
 33.2
Total 610,260
 $123.5
 215,968
 $40.8
(1)Represents repurchases under authorizations by the board of directors for the repurchase of shares by us from time to time in the open market or in privately negotiated transactions. On February 13, 2017, the board of directors authorized the repurchase of up to one million shares of our common stock in addition to the board’s prior authorizations. As of September 30, 2017, we had authorization to repurchase 776,208 shares of our common stock.
(2)Represents shares of common stock released to us by team members as payment of tax withholdings upon the vesting of restricted stock and restricted stock units and the conversion of restricted stock units to common stock.

14.15.         STOCK-BASED COMPENSATION PLANS

Stock-based compensation expense consists of the following:
(In millions)For the Three Months Ended 
March 31,
 20242023
Stock options$8.2 $8.5 
Restricted stock units2.7 1.4 
Total$10.9 $9.9 

Pursuant to our Amended and Restated Incentive Compensation Plan, we can grant stock-based awards in the form of restricted stock, restricted stock units, and stock options to team members, officers, directors, and contractors. Instead of a short-term compensation program providing for rolling, annual equity awards to our executive officers and senior leaders, we utilize a multi-year compensation program that grants a one-time equity award at the beginning of the compensation program period that is intended to incentivize recipients over the multi-year compensation period. Our current compensation program for executive officers and senior leaders covers the 2021 through 2024 compensation period and included a one-time equity award in December 2020 with a vesting period of four years. Based on the stock-based awards that are currently outstanding, we expect to recognize the future stock-based compensation expense as follows:

(in millions)
YearTotal Projected
Stock-Based Compensation Expense
Remainder of 2024$31.1 
202511.4 
20265.4 
20270.2 
2028— 
Total$48.1 

39


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
(UNAUDITED)
(In millions) For the Three Months Ended 
 September 30,		 For the Nine Months Ended 
 September 30,
  2017 2016 2017 2016
Restricted stock $0.8
 $0.7
 $2.2
 $2.1
Restricted stock units 2.1
 1.1
 6.1
 3.5
Total $2.9
 $1.8
 $8.3
 $5.6

15.16.        COMMITMENTS AND CONTINGENCIES


Litigation and Other Legal Matters


In the normal course of business and as a result of the consumer-oriented nature of the industry in which we operate, we and other industry participants are frequently subject to various consumer claims, litigation, and regulatory investigations seeking damages, fines, and statutory penalties. The claims allege, among other theories of liability, violations of state, federal, and foreign truth-in-lending, credit availability, credit reporting, consumer protection, warranty, debt collection, insurance, and other consumer-oriented laws and regulations, including claims seeking damages for alleged physical and mental damagesharm relating to the repossession and sale of consumers'consumers’ vehicles and other debt collection activities. As the assignee of Consumer Loans originated by Dealers, we may also be named as a co-defendant in lawsuits filed by consumers principally against Dealers. We may also have disputes and litigation with Dealers. The claims may allege, among other theories of liability, that we breached ourthe Dealer servicing agreement. We may also have disputes and litigation with vendors and other third parties. The claims may allege, among other theories of liability, that we breached a license agreement or contract. The damages, fines, and penalties that may be claimed by consumers, regulatory agencies, Dealers, vendors, or Dealersother third parties in these types of matters can be substantial. The relief requested by plaintiffs varies but may include requests for compensatory, statutory, and punitive damages and injunctive relief, and plaintiffs may seek treatment as purported class actions. An adverse ultimate disposition in any action toactions or they may file individual arbitration demands for which we are a party or otherwise subject could have a material adverse impact on our financial position, liquidity and results of operations.arbitration providers may request separate filing fees. The following matters include current actions to which we are a party and updates to matters that were disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.2023.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONCLUDED)
(UNAUDITED)



On August 14, 2017,December 1, 2021, we received a subpoena from the Office of the Attorney General offor the State of Mississippi, relating to the originationCalifornia seeking documents and collection of non-prime auto loans in the state of Mississippi.information regarding GAP products, GAP product administration, and refunds. We are cooperating with thethis inquiry and cannot predict the eventual scope, duration, or outcome at this time. As a result, we are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this investigation.


On June 14, 2017,May 7, 2019, we were informedreceived a subpoena from the Consumer Frauds and Protection Bureau of the Office of the New York State Attorney General, relating to the Company’s origination and collection policies and procedures in the state of New York. After May 7, 2019 through April 30, 2021, we received additional subpoenas from the Office of the New York State Attorney General relating to the Company’s origination, collection, and securitization practices. On November 19, 2020 and August 23, 2022, we received letters from the Office of the New York State Attorney General indicating that it may commence litigation against the Company asserting violations of New York Executive Law § 63(12) and New York General Business Law §§ 349 and 352 et seq. and applicable federal laws, including but not limited to claims that the Company engaged in unfair and deceptive trade practices in auto lending, debt collection, and asset-backed securitizations in the State of New York in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, New York Executive Law § 63(12), the New York Martin Act, and New York General Business Law § 349. See the description below of the lawsuit commenced by the Office of the New York State Attorney General on January 4, 2023.

On April 22, 2019, we received a civil investigative demand from the Consumer Financial Protection Bureau’sBureau (“Bureau”) seeking, among other things, certain information relating to the Company’s origination and collection of Consumer Loans, TPPs, and credit reporting. After April 22, 2019 through March 7, 2022, we received additional subpoenas from the Bureau. On December 6, 2021, we received a Notice and Opportunity to Respond and Advise letter from the Staff of the Office of Fair Lending and Equal Opportunity is investigatingEnforcement (“Staff”) of the Bureau, stating that the Staff was considering whether to recommend that the Bureau take legal action against the Company may have violatedfor alleged violations of the Equal Credit OpportunityConsumer Financial Protection Act and Regulation B. We are cooperatingof 2010 (the “CFPA”) in connection with the inquiryCompany’s consumer loan origination practices. See the description below of the lawsuit commenced by the Bureau on January 4, 2023.


40


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONCLUDED)
(UNAUDITED)
On January 4, 2023, the Office of the New York State Attorney General and cannot predict the eventual scope, durationBureau jointly filed a complaint in the United States District Court for the Southern District of New York alleging that the Company engaged in deceptive practices, fraud, illegality, and securities fraud in violation of New York Executive Law § 63(12) and New York General Business Law §§ 349 and 352, and that the Company engaged in deceptive and abusive acts and provided substantial assistance to a covered person or outcome at this time. Asservice provider in violation of the CFPA, 12 U.S.C. § 5531 and 12 U.S.C. § 5536(a)(1)(B). The complaint seeks injunctive relief, an accounting of all consumers for whom the Company provided financing, restitution, damages, disgorgement, civil penalties, and payment of costs. On March 14, 2023, the Company filed a result, wemotion to dismiss the complaint. On August 7, 2023, the court stayed the action pending the U.S. Supreme Court’s decision in Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd., No. 22-448. We are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this inquiry.litigation. The Company intends to vigorously defend itself in this matter.

On November 7, 2016, we received a civil investigative demand from the Federal Trade Commission seeking information on the Company’s policies, practices and procedures in allowing car dealers to use GPS Starter Interrupters on consumer vehicles. We are cooperating with the inquiry and cannot predict the eventual scope, duration or outcome at this time. As a result, we are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this investigation.


On March 18, 2016, we received a subpoena from the Attorney General of the State of Maryland, relating to the Company’s repossession and sale policies and procedures in the state of Maryland. On April 3, 2020, we received a subpoena from the Attorney General of the State of Maryland relating to the Company’s origination and collection policies and procedures in the state of Maryland. On August 11, 2020, we received a subpoena from the Attorney General of the State of Maryland restating most of the requests contained in the March 18, 2016 and April 3, 2020 subpoenas, making additional requests, and expanding the inquiry to include 41 other states (Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, and Wisconsin) and the District of Columbia. Also on August 11, 2020, we received from the Attorney General of the State of New Jersey a subpoena that is essentially identical to the August 11, 2020 Maryland subpoena, both as to substance and as to the jurisdictions identified. The Company has been informed that the State of Kansas, the State of Texas, and the State of Iowa have withdrawn from the multistate investigation. We are cooperating with the inquirythese investigations and cannot predict thetheir eventual scope, duration, or outcome at this time. As a result, we are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this investigation.these investigations.

On February 19, 2016, we received a First Amended Complaint filed by Westlake Services d/b/a Westlake Financial Service and Nowcom Corporation, alleging that the Company has attempted to monopolize the indirect financing profit sharing program market in violation of Section 2 of the Sherman Act and seeking, among other things, injunctive relief and unspecified money damages, which, if awarded, would likely be trebled pursuant to the Sherman Act. The case was filed in the United States District Court, Central District of California, Western Division. On April 6, 2016, the Court dismissed the claims brought by Nowcom Corporation.  We cannot predict the duration or outcome of this lawsuit at this time. As a result, we are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this lawsuit. The Company intends to vigorously defend itself in this matter.

On September 18, 2015, we received a subpoena from the Attorney General of the State of New York, Civil Rights Bureau relating to the Company’s origination and collection of Consumer Loans in the state of New York. We have cooperated with the inquiry, but cannot predict the eventual scope, duration or outcome at this time. As a result, we are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this investigation.


On December 9, 2014, we received a civil investigative subpoena from the U.S. Department of Justice pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 directing us to produce certain information relating to subprime automotive finance and related securitization activities. We have cooperated with the inquiry, but cannot predict the eventual scope, duration, or outcome at this time. As a result, we are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this investigation.


On December 4, 2014, we received a civil investigative demand from the Office of the Attorney General of the Commonwealth of Massachusetts relatingAn adverse ultimate disposition in any action to the origination and collection of non-prime auto loans in Massachusetts. We are cooperating with the inquiry and cannot predict the eventual scope, duration or outcome at this time. As a result,which we are unable to estimate the reasonably possible lossa party or rangeotherwise subject could have a material adverse impact on our financial position, liquidity, and results of reasonably possible loss arising from this investigation.operations.

16.        SUBSEQUENT EVENTS

On October 26, 2017, we completed a $350.0 million Term ABS financing, which was used to repay outstanding indebtedness. The financing has an expected annualized cost of approximately 3.2% (including the initial purchaser’s fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the contributed Loans.






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ITEM 2.           MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in Item 8 - Financial Statements and Supplementary Data, of our 20162023 Annual Report on Form 10-K, as well as Part I - Item 1 - Financial Statements, of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.


Overview


We offermake vehicle ownership possible by providing innovative financing programssolutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history. Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our financing programs, but who actually end up qualifying for traditional financing.


For the three months ended September 30, 2017,March 31, 2024, consolidated net income was $100.7$64.3 million, or $5.19$5.08 per diluted share, compared to $85.9consolidated net income of $99.5 million, or $4.21$7.61 per diluted share, for the same period in 2016. For the nine months ended September 30, 2017, consolidated net income was $293.1 million, or $14.99 per diluted share, compared2023, primarily due to $245.2 million, or $12.01 per diluted share, for the same period in 2016. The increases in consolidated net incomeprovision for credit losses and interest expense, partially offset by an increase in finance charges. Our results for the three and nine months ended September 30, 2017 were primarilyMarch 31, 2024 included:

•A decrease in forecasted collection rates
The decrease in forecasted collection rates decreased forecasted net cash flows from our Loan portfolio by $30.8 million, or 0.3%, compared to stable forecasted collection rates during the first quarter of 2023 that increased forecasted net cash flows from our Loan portfolio by $9.4 million, or 0.1%.
•A decrease in forecasted profitability for Consumer Loans assigned in 2020 through 2022
Forecasted profitability was lower than our estimates at March 31, 2023, due to an increasea decline in forecasted collection rates since the first quarter of 2023 and slower forecasted net cash flow timing during 2023 and the first quarter of 2024, primarily as a result of a decrease in Consumer Loan prepayments, which remain at below-average levels.
•Growth in Consumer Loan assignment volume and the average balance of our Loan portfolio.portfolio

Unit and dollar volumes grew 24.1% and 20.2%, respectively, as compared to the first quarter of 2023. The average balance of our Loan portfolio, which is our largest-ever, increased 11.7% as compared to the first quarter of 2023.
•An increase in the initial spread on Consumer Loan assignments
The initial spread increased to 22.0% compared to 21.0% on Consumer Loans assigned in the first quarter of 2023.
•An increase in our average cost of debt
Our average cost of debt increased from 4.7% to 7.0%, primarily a result of higher interest rates on recently-completed or -extended secured financings and recently-issued senior notes and the repayment of older secured financings and senior notes with lower interest rates.
•A decrease in common shares outstanding due to stock repurchases
Since the first quarter of 2023, we have repurchased approximately 728,000 shares, or 5.7% of the shares outstanding as of March 31, 2023.



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Critical Success Factors


Critical success factors include our ability to accurately forecast Consumer Loan performance, access capital on acceptable terms, and maintain or grow Consumer Loan volume at the level and on the terms that we anticipate, with anthe objective to maximize economic profit.profit over the long term. Economic profit is a non-GAAP financial measure we use to evaluate our financial results and determine incentive compensation.profit-sharing for team members. We also use economic profit as a framework to evaluate business decisions and strategies. Economic profit measures how efficiently we utilize our total capital, both debt and equity, and is a function of the return on capital in excess of the cost of capital and the amount of capital invested in the business.


35



Consumer Loan Metrics


At the time a Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan. Based on the amount and timing of these forecasts and expected expense levels, an advance or one-time purchase payment is made to the related Dealer at a price designed to maximize economic profit.


We use a statistical model to estimate the expected collection rate for each Consumer Loan at the time of assignment. We continue to evaluate the expected collection rate offor each Consumer Loan subsequent to assignment. Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast. By comparing our current expected collection rate for each Consumer Loan with the rate we projected at the time of assignment, we are able to assess the accuracy of our initial forecast. The following table compares our aggregated forecast of Consumer Loan collection rates as of September 30, 2017,March 31, 2024, with the aggregated forecasts as of June 30, 2017, December 31, 20162023 and at the time of assignment, segmented by year of assignment:

 Forecasted Collection Percentage as of (1)Current Forecast Variance from
Consumer Loan Assignment YearMarch 31, 2024December 31, 2023Initial ForecastDecember 31, 2023Initial Forecast
201565.3 %65.2 %67.7 %0.1 %-2.4 %
201663.8 %63.8 %65.4 %0.0 %-1.6 %
201764.7 %64.7 %64.0 %0.0 %0.7 %
201865.5 %65.5 %63.6 %0.0 %1.9 %
201967.0 %66.9 %64.0 %0.1 %3.0 %
202067.7 %67.6 %63.4 %0.1 %4.3 %
202164.3 %64.5 %66.3 %-0.2 %-2.0 %
202262.1 %62.7 %67.5 %-0.6 %-5.4 %
202367.2 %67.4 %67.5 %-0.2 %-0.3 %
202466.9 %— 66.9 %— 0.0 %
  Forecasted Collection Percentage as of (1) Current Forecast Variance from
Consumer Loan Assignment Year September 30, 2017 June 30, 2017 December 31, 2016 Initial Forecast June 30, 2017 December 31, 2016 Initial Forecast
2008 70.5% 70.5% 70.4% 69.7% 0.0 % 0.1 % 0.8 %
2009 79.5% 79.5% 79.4% 71.9% 0.0 % 0.1 % 7.6 %
2010 77.6% 77.6% 77.6% 73.6% 0.0 % 0.0 % 4.0 %
2011 74.7% 74.8% 74.7% 72.5% -0.1 % 0.0 % 2.2 %
2012 73.8% 73.8% 73.7% 71.4% 0.0 % 0.1 % 2.4 %
2013 73.5% 73.5% 73.4% 72.0% 0.0 % 0.1 % 1.5 %
2014 71.7% 71.7% 71.8% 71.8% 0.0 % -0.1 % -0.1 %
2015 65.5% 65.7% 66.1% 67.7% -0.2 % -0.6 % -2.2 %
2016 64.9% 65.1% 65.1% 65.4% -0.2 % -0.2 % -0.5 %
     2017 (2) 65.5% 65.5% —
 64.1% 0.0 % —
 1.4 %
(1)Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment.  Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates.
(1)Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment.  Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates in the table.
(2)The forecasted collection rate for 2017 Consumer Loans as of September 30, 2017 includes both Consumer Loans that were in our portfolio as of June 30, 2017 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments:
  Forecasted Collection Percentage as of Current Forecast Variance from
2017 Consumer Loan Assignment Period September 30, 2017 June 30, 2017 Initial Forecast June 30, 2017 Initial Forecast
January 1, 2017 through June 30, 2017 65.6% 65.5% 64.2% 0.1% 1.4%
July 1, 2017 through September 30, 2017 65.3% —
 63.9% —
 1.4%


Consumer Loans assigned in 20092018 through 2013 and 20172020 have yielded forecasted collection results materiallysignificantly better than our initial estimates, while Consumer Loans assigned in 2015, 2016, 2021, and 2022 have yielded forecasted collection results materiallysignificantly worse than our initial estimates. For Consumer Loans assigned in 2008, 2014 and 2016,all other assignment years presented, actual results have been close to our initial estimates. For the three months ended September 30, 2017,March 31, 2024, forecasted collection rates improved for Consumer Loans assigned in 2017, declined for Consumer Loans assigned in 2015 and 2016 and were generally consistent with expectations at the start of the period for all other assignment years presented. For the nine months ended September 30, 2017, forecasted collection rates improved for Consumer Loans assigned in 2017, declined for Consumer Loans assigned in 2015 and 20162021 through 2023 and were generally consistent with expectations at the start of the period for all other assignment years presented.





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The changes in forecasted collection rates for the three and nine months ended September 30, 2017March 31, 2024 and 20162023 impacted forecasted net cash flows (forecasted collections less forecasted Dealer Holdback payments) as follows:

(Dollars in millions)For the Three Months Ended March 31,
Increase (Decrease) in Forecasted Net Cash Flows20242023
Dealer loans$(27.0)$(7.2)
Purchased loans(3.8)16.6 
Total$(30.8)$9.4 
% change from forecast at beginning of period-0.3 %0.1 %

We have experienced increased levels of uncertainty associated with our estimate of the amount and timing of future net cash flows from our Loan portfolio since the beginning of 2020, with realized collections underperforming our expectations during the early stages of the COVID-19 pandemic, outperforming our expectations following the distribution of federal stimulus payments and enhanced unemployment benefits, and underperforming our expectations during the current economic environment. Forecasting collection rates accurately is challenging, so we have designed our business model to produce acceptable levels of profitability across our portfolio, even if Loan performance is less than forecasted in the aggregate. For the period from January 1, 2020 through March 31, 2024, the cumulative change to our forecast of future net cash flows from our Loan portfolio has been a decrease of $17.0 million, or 0.2%, as shown in the following table:

(Dollars in millions)Increase (Decrease) in Forecasted Net Cash Flows
Three Months EndedTotal Loans% Change from Forecast at Beginning of Period
March 31, 2020$(206.5)-2.3 %
June 30, 202024.4 0.3 %
September 30, 2020138.5 1.5 %
December 31, 2020(2.7)0.0 %
March 31, 2021107.4 1.1 %
June 30, 2021104.5 1.1 %
September 30, 202182.3 0.9 %
December 31, 202131.9 0.3 %
March 31, 2022110.2 1.2 %
June 30, 2022(43.4)-0.5 %
September 30, 2022(85.4)-0.9 %
December 31, 2022(41.1)-0.5 %
March 31, 20239.4 0.1 %
June 30, 2023(89.3)-0.9 %
September 30, 2023(69.4)-0.7 %
December 31, 2023(57.0)-0.6 %
March 31, 2024(30.8)-0.3 %
Total$(17.0)-0.2 %

44

(In millions) For the Three Months Ended 
 September 30,		 For the Nine Months Ended 
 September 30,
Increase (decrease) in forecasted net cash flows 2017 2016 2017 2016
Dealer Loans $(1.9) $(7.6) $(6.8) $(21.1)
Purchased Loans 7.4
 1.6
 29.2
 14.9
     Total Loans $5.5
 $(6.0) $22.4
 $(6.2)
Table of Contents



The following table presents information on the average Consumer Loan assignmentassignments for each of the last 10 years:
AverageTotal Assignment Volume
 Consumer Loan Assignment YearConsumer Loan (1)Advance (2)Initial Loan Term (in months)Unit VolumeDollar Volume (2)
(in millions)
2015$16,354 $7,272 50 298,288 $2,167.0 
201618,2187,97653 330,710 2,635.5 
201720,2308,74655 328,507 2,873.1 
201822,1589,63557 373,329 3,595.8 
201923,13910,17457 369,805 3,772.2 
202024,26210,65659 341,967 3,641.2 
202125,63211,79059 268,730 3,167.8 
202227,24212,92460 280,467 3,625.3 
202327,02512,47561 332,499 4,147.8 
     2024 (3)26,31811,81361 111,488 1,317.0 
  Average
 Consumer Loan Assignment Year Consumer Loan (1) Advance (2) Initial Loan Term (in months)
2008 $14,518
 $6,479
 42
2009 12,689
 5,565
 38
2010 14,480
 6,473
 41
2011 15,686
 7,137
 46
2012 15,468
 7,165
 47
2013 15,445
 7,344
 47
2014 15,692
 7,492
 47
2015 16,354
 7,272
 50
2016 18,218
 7,976
 53
     2017 (3) 19,882
 8,586
 54


(1)Represents the repayments that we were contractually owed on Consumer Loans at the time of assignment, which include both principal and interest.
(2)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
(3)Represents activity for the three months ended March 31, 2024. Information in this table for each of the years prior to 2024 represents activity for all 12 months of that year.

(1)Represents the repayments that we were contractually owed on Consumer Loans at the time of assignment, which include both principal and interest.
(2)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
(3)The averages for 2017 Consumer Loans include both Consumer Loans that were in our portfolio as of June 30, 2017 and Consumer Loans assigned during the most recent quarter. The following table provides averages for each of these segments:
  Average
 2017 Consumer Loan Assignment Period Consumer Loan Advance Initial Loan Term (in months)
January 1, 2017 through June 30, 2017 $19,672
 $8,496
 54
July 1, 2017 through September 30, 2017 20,340
 8,781
 55

37


our loans is primarily driven by the amount and timing of the net cash flows we receive from the spread between the forecasted collection rate and the advance rate, less operating expenses and the cost of capital. Forecasting collection rates accurately at Loan inception is difficult. With this in mind, we establish advance rates that are intended to allow us to achieve acceptable levels of profitability across our portfolio, even if collection rates are less than we initially forecast.


The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, the spreadand spreads (the forecasted collection rate less the advance rate), and the percentage of the forecasted collections that had been realized as of September 30, 2017.March 31, 2024, as well as forecasted collection rates and spreads at the time of assignment. All amounts, unless otherwise noted, are presented as a percentage of the initial balance of the Consumer Loan (principal + interest). The table includes both Dealer Loans and Purchased Loans.


 Forecasted Collection % as ofSpread % as of
Consumer Loan Assignment YearMarch 31, 2024Initial ForecastAdvance % (1)March 31, 2024Initial Forecast% of Forecast Realized (2)
201565.3 %67.7 %44.5 %20.8 %23.2 %99.5 %
201663.8 %65.4 %43.8 %20.0 %21.6 %99.2 %
201764.7 %64.0 %43.2 %21.5 %20.8 %98.8 %
201865.5 %63.6 %43.5 %22.0 %20.1 %97.5 %
201967.0 %64.0 %44.0 %23.0 %20.0 %93.9 %
202067.7 %63.4 %43.9 %23.8 %19.5 %86.3 %
202164.3 %66.3 %46.0 %18.3 %20.3 %73.4 %
202262.1 %67.5 %47.4 %14.7 %20.1 %49.9 %
202367.2 %67.5 %46.2 %21.0 %21.3 %21.8 %
202466.9 %66.9 %44.9 %22.0 %22.0 %2.5 %
 
As of September 30, 2017
Consumer Loan Assignment Year
Forecasted Collection %
Advance % (1)
Spread %
% of Forecast Realized (2)
2008
70.5%
44.6%
25.9%
99.7%
2009
79.5%
43.9%
35.6%
99.7%
2010
77.6%
44.7%
32.9%
99.4%
2011
74.7%
45.5%
29.2%
98.7%
2012
73.8%
46.3%
27.5%
98.0%
2013
73.5%
47.6%
25.9%
95.0%
2014
71.7%
47.7%
24.0%
86.3%
2015 65.5% 44.5% 21.0% 68.2%
2016 64.9% 43.8% 21.1% 40.9%
     2017 (3) 65.5% 43.2% 22.3% 11.5%
(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

(2)Presented as a percentage of total forecasted collections.

(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
(2)Presented as a percentage of total forecasted collections.
(3)The forecasted collection rate, advance rate and spread for 2017 Consumer Loans as of September 30, 2017 include both Consumer Loans that were in our portfolio as of June 30, 2017 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates, advance rates and spreads for each of these segments:
  As of September 30, 2017
 2017 Consumer Loan Assignment Period 
Forecasted
Collection %
 Advance % Spread %
January 1, 2017 through June 30, 2017 65.6% 43.2% 22.4%
July 1, 2017 through September 30, 2017 65.3% 43.2% 22.1%

The risk of a material change in our forecasted collection rate declines as the Consumer Loans age. For 20132019 and prior Consumer Loan assignments, the risk of a material forecast variance is modest, as we have currently realized in excess of 90% of the expected collections. Conversely, the forecasted collection rates for more recent Consumer Loan assignments are less certain as a significant portion of our forecast has not been realized.

45

Table of Contents


The spread between the forecasted collection rate as of March 31, 2024 and the advance rate has rangedranges from 21.0%14.7% to 35.6%23.8%, on an annual basis, for Consumer Loans assigned over the last 10 years. The spread was atspreads with respect to 2019 and 2020 Consumer Loans have been positively impacted by Consumer Loan performance, which has exceeded our initial estimates by a greater margin than the high end of this range in 2009 and 2010, when the competitive environment was unusually favorable, and much lower during other years (2014 through 2017) when competitionpresented. The spread with respect to 2022 Consumer Loans has been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented. The higher spread for 2024 Consumer Loans relative to 2023 Consumer Loans as of March 31, 2024 was more intense. The declineprimarily a result of a higher initial spread on 2024 Consumer Loans, which was due to a decrease in the advance rate, from 2016 to 2017 reflects the lower initial forecast on Consumer Loan assignments received in 2017, partially offset by an increase in Purchased Loans as a percentage of total unit volume. The increase in the spread from 2016 to 2017 was the result of the performance of 2017 Consumer Loans, which has materially exceeded our initial estimates, partially offset by a change inlower initial forecast. Additionally, the mixperformance of 2023 Consumer Loan assignments received during 2017, including an increase in Purchased Loans as a percentage of total unit volume.has been lower than our initial estimates.


38



The following table compares our forecast of aggregate Consumer Loan collection rates as of September 30, 2017March 31, 2024 with the forecasts at the time of assignment, for Dealer Loans and Purchased Loans separately:
Dealer LoansPurchased Loans
Forecasted Collection Percentage as of (1)Forecasted Collection Percentage as of (1)
 Consumer Loan Assignment YearMarch 31, 2024Initial
Forecast		VarianceMarch 31, 2024Initial
Forecast		Variance
201564.6 %67.5 %-2.9 %68.9 %68.5 %0.4 %
201663.0 %65.1 %-2.1 %66.1 %66.5 %-0.4 %
201764.0 %63.8 %0.2 %66.3 %64.6 %1.7 %
201864.9 %63.6 %1.3 %66.8 %63.5 %3.3 %
201966.7 %63.9 %2.8 %67.7 %64.2 %3.5 %
202067.5 %63.3 %4.2 %67.9 %63.6 %4.3 %
202164.1 %66.3 %-2.2 %64.8 %66.3 %-1.5 %
202261.4 %67.3 %-5.9 %63.8 %68.0 %-4.2 %
202366.1 %66.8 %-0.7 %70.0 %69.4 %0.6 %
202466.0 %66.0 %0.0 %70.0 %69.9 %0.1 %

(1)The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment. The forecasted collection rates represent the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates.


46

  Dealer Loans Purchased Loans
  Forecasted Collection Percentage as of   Forecasted Collection Percentage as of  
 Consumer Loan Assignment Year September 30, 2017 Initial
Forecast		 Variance September 30, 2017 Initial
Forecast		 Variance
2008 70.9% 70.2% 0.7 % 69.8% 68.8% 1.0%
2009 79.4% 72.1% 7.3 % 79.6% 70.5% 9.1%
2010 77.7% 73.6% 4.1 % 77.5% 73.1% 4.4%
2011 74.7% 72.4% 2.3 % 75.2% 72.7% 2.5%
2012 73.8% 71.3% 2.5 % 74.0% 71.4% 2.6%
2013 73.5% 72.1% 1.4 % 73.1% 71.6% 1.5%
2014 71.6% 71.9% -0.3 % 72.5% 70.9% 1.6%
2015 64.8% 67.5% -2.7 % 69.7% 68.5% 1.2%
2016 64.0% 65.1% -1.1 % 67.6% 66.5% 1.1%
2017 64.9% 63.8% 1.1 % 67.0% 64.7% 2.3%
Table of Contents



The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and the spreadspreads (the forecasted collection rate less the advance rate) as of September 30, 2017March 31, 2024 for Dealer Loans and Purchased Loans separately. All amounts are presented as a percentage of the initial balance of the Consumer Loan (principal + interest).
Dealer LoansPurchased Loans
 Consumer Loan Assignment YearForecasted Collection % (1)Advance % (1)(2)Spread %Forecasted Collection % (1)Advance % (1)(2)Spread %
201564.6 %43.4 %21.2 %68.9 %50.2 %18.7 %
201663.0 %42.1 %20.9 %66.1 %48.6 %17.5 %
201764.0 %42.1 %21.9 %66.3 %45.8 %20.5 %
201864.9 %42.7 %22.2 %66.8 %45.2 %21.6 %
201966.7 %43.1 %23.6 %67.7 %45.6 %22.1 %
202067.5 %43.0 %24.5 %67.9 %45.5 %22.4 %
202164.1 %45.1 %19.0 %64.8 %47.7 %17.1 %
202261.4 %46.4 %15.0 %63.8 %50.1 %13.7 %
202366.1 %44.8 %21.3 %70.0 %49.8 %20.2 %
202466.0 %44.0 %22.0 %70.0 %48.3 %21.7 %
  Dealer Loans Purchased Loans
 Consumer Loan Assignment Year Forecasted Collection % (1) Advance % (1)(2) Spread % Forecasted Collection % (1) Advance % (1)(2) Spread %
2008 70.9% 43.3% 27.6% 69.8% 46.7% 23.1%
2009 79.4% 43.4% 36.0% 79.6% 45.3% 34.3%
2010 77.7% 44.4% 33.3% 77.5% 46.2% 31.3%
2011 74.7% 45.2% 29.5% 75.2% 47.4% 27.8%
2012 73.8% 46.1% 27.7% 74.0% 47.6% 26.4%
2013 73.5% 47.1% 26.4% 73.1% 49.7% 23.4%
2014 71.6% 47.2% 24.4% 72.5% 51.2% 21.3%
2015 64.8% 43.4% 21.4% 69.7% 50.0% 19.7%
2016 64.0% 42.1% 21.9% 67.6% 48.5% 19.1%
2017 64.9% 42.0% 22.9% 67.0% 46.0% 21.0%


(1)The forecasted collection rates and advance rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment.
(1)The forecasted collection rates and advance rates presented for each Consumer Loan assignment year change over time due to the impact of transfers between Dealer and Purchased Loans. Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback. We transfer the Dealer’s Consumer Loans from the Dealer Loan portfolio to the Purchased Loan portfolio in the period this forfeiture occurs.
(2)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

(2)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

Although the advance rate on Purchased Loans is higher as compared to the advance rate on Dealer Loans, Purchased Loans do not require us to pay Dealer Holdback.


The spread as of March 31, 2024 on 2024 Dealer Loans increased from 21.9% in 2016was 22.0%, as compared to 22.9% in 2017a spread of 21.3% on 2023 Dealer Loans. The increase was due to Consumer Loan performance, as the performance of 2023 Dealer Loans has been lower than our initial estimates.

The spread as of March 31, 2024 on 2024 Purchased Loans was 21.7%, as compared to a spread of 20.2% on 2023 Purchased Loans. The increase was primarily a result of a higher initial spread on 2024 Purchased Loans, due to a lower advance rate and higher initial forecast. The increase was partially offset by Consumer Loan performance, as the performance of 2017 Consumer2023 Purchased Loans in our Dealer Loan portfolio, which has exceeded our initial estimates, while those assigned to us in 2016 have declined from our initial estimates, partially offset by a change in the mix of Consumer Loan assignments.estimates.


The spread on Purchased Loans increased from 19.1% in 2016 to 21.0% in 2017 primarily as a result of the performance of 2017 Consumer Loans in our Purchased Loan portfolio, which has exceeded our initial estimates by a greater margin than those assigned to us in 2016, partially offset by a change in the mix of Consumer Loan assignments.



39


Access to Capital


Our strategy for accessing capital on acceptable terms needed to maintain and grow the business is to: (1) maintain consistent financial performance; (2) maintain modest financial leverage; and (3) maintain multiple funding sources. Our funded debt to equity ratio was 2.23.4 to 1 as of September 30, 2017.March 31, 2024. We currently utilize the following primary forms of debt financing: (1) aour revolving secured line of credit;credit facility; (2) Warehouse facilities; (3) Term ABS financings; and (4) senior notes.



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Table of Contents


Consumer Loan Volume


The following table summarizes changes in Consumer Loan assignment volume in each of the last sevenfive quarters as compared to the same period in the previous year:
 Year over Year Percent Change
Three Months EndedUnit VolumeDollar Volume (1)
March 31, 202322.8 %18.6 %
June 30, 202312.8 %8.3 %
September 30, 202313.0 %10.5 %
December 31, 202326.7 %21.3 %
March 31, 202424.1 %20.2 %

  Year over Year Percent Change
Three Months Ended Unit Volume Dollar Volume (1)
March 31, 2016 21.1 % 18.8 %
June 30, 2016 15.1 % 27.6 %
September 30, 2016 12.0 % 33.4 %
December 31, 2016 -5.6 % 7.8 %
March 31, 2017 -6.6 % 6.4 %
June 30, 2017 1.0 % 7.1 %
September 30, 2017 -4.7 % -0.5 %
(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.


Consumer Loan assignment volumes depend on a number of factors including (1) the overall demand for our financing programs, (2) the amount of capital available to fund new Loans, and (3) our assessment of the volume that our infrastructure can support. Our pricing strategy is intended to maximize the amount of economic profit we generate, within the confines of capital and infrastructure constraints.


Unit and dollar volumes declined 4.7%grew 24.1% and 0.5%20.2%, respectively, during the thirdfirst quarter of 20172024 as the number of active Dealers grew 5.7% while10.5% and the average unit volume per active Dealer declined 9.7%increased 12.0%. Dollar volume declined slowerincreased less than unit volume during the thirdfirst quarter of 2017 due to an increase in the average advance paid per unit. This increase was the result of an increase in the average size of the Consumer Loans assigned primarily due to an increase in the average vehicle selling price and an increase in Purchased Loans as a percentage of total unit volume, partially offset by a decrease in the average advance rate2024 due to a decrease in the average initial forecastadvance paid, due to decreases in the average advance rate and the average size of the Consumer Loans assigned.

For three out of Unit volume for the four most recent quarters, unit volumes declined as28-day period ended April 28, 2024 grew 11.4% compared to the same periods of the prior year. This trend reflects the difficulty of growing the number of active dealers fast enough to offset the impact of the competitive environment on attrition and per dealer volumes. In addition,period in response to the decline in forecasted collection rates experienced in 2016, we adjusted our initial collection forecasts downward during 2016. While the adjustments have been modest, we believe these adjustments have had an adverse impact on unit volumes.2023.




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48


Table of Contents





The following table summarizes the changes in Consumer Loan unit volume and active Dealers:
For the Three Months Ended March 31,
20242023% Change
Consumer Loan unit volume111,488 89,821 24.1 %
Active Dealers (1)10,805 9,775 10.5 %
Average volume per active Dealer10.3 9.2 12.0 %
Consumer Loan unit volume from Dealers active both periods86,596 75,422 14.8 %
Dealers active both periods6,744 6,744 — 
Average volume per Dealer active both periods12.8 11.2 14.8 %
Consumer Loan unit volume from Dealers not active both periods
24,892 14,399 72.9 %
Dealers not active both periods
4,061 3,031 34.0 %
Average volume per Dealer not active both periods
6.1 4.8 27.1 %
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2017 2016 % Change 2017 2016 % Change
Consumer Loan unit volume78,589
 82,460
 -4.7 % 250,715
 260,531
 -3.8 %
Active Dealers (1)7,737
 7,320
 5.7 % 10,484
 9,646
 8.7 %
Average volume per active Dealer10.2
 11.3
 -9.7 % 23.9
 27.0
 -11.5 %
            
Consumer Loan unit volume from Dealers active both periods57,354
 62,884
 -8.8 % 204,255
 227,345
 -10.2 %
Dealers active both periods4,551
 4,551
 —
 6,721
 6,721
 —
Average volume per Dealers active both periods12.6
 13.8
 -8.8 % 30.4
 33.8
 -10.2 %
            
Consumer Loan unit volume from Dealers not active both periods
21,235
 19,576
 8.5 % 46,460
 33,186
 40.0 %
Dealers not active both periods
3,186
 2,769
 15.1 % 3,763
 2,925
 28.6 %
Average volume per Dealers not active both periods
6.7
 7.1
 -5.6 % 12.3
 11.3
 8.8 %
(1)Active Dealers are Dealers who have received funding for at least one Consumer Loan during the period.

(1)Active Dealers are Dealers who have received funding for at least one Consumer Loan during the period.


The following table provides additional information on the changes in Consumer Loan unit volume and active Dealers:
For the Three Months Ended March 31,
20242023% Change
Consumer Loan unit volume from new active Dealers5,193 5,268 -1.4 %
New active Dealers (1)1,310 1,158 13.1 %
Average volume per new active Dealer4.0 4.5 -11.1 %
Attrition (2)-16.0 %-13.8 %
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2017 2016 % Change 2017 2016 % Change
Consumer Loan unit volume from new Dealers4,063
 3,506
 15.9 % 29,409
 30,330
 -3.0 %
New active Dealers (1)946
 794
 19.1 % 2,821
 2,636
 7.0 %
Average volume per new active Dealers4.3
 4.4
 -2.3 % 10.4
 11.5
 -9.6 %
            
Attrition (2)-23.7 % -18.4 % 

 -12.7 % -10.0 %  


(1)New active Dealers are Dealers who enrolled in our program and have received funding for their first Loan from us during the period.
(2)Attrition is measured according to the following formula:  decrease in Consumer Loan unit volume from Dealers who have received funding for at least one Loan during the comparable period of the prior year but did not receive funding for any Loans during the current period divided by prior year comparable period Consumer Loan unit volume.

(1)New active Dealers are Dealers who enrolled in our program and have received funding for their first Loan from us during the period.
(2)Attrition is measured according to the following formula: decrease in Consumer Loan unit volume from Dealers who have received funding for at least one Loan during the comparable period of the prior year but did not receive funding for any Loans during the current period divided by prior year comparable period Consumer Loan unit volume.

The following table shows the percentage of Consumer Loans assigned to us as Dealer Loans and Purchased Loans for each of the last sevenfive quarters:
  Unit Volume Dollar Volume (1)
Three Months Ended Dealer Loans Purchased Loans Dealer Loans Purchased Loans
March 31, 2016 82.4% 17.6% 75.6% 24.4%
June 30, 2016 77.8% 22.2% 69.8% 30.2%
September 30, 2016 76.2% 23.8% 68.5% 31.5%
December 31, 2016 76.9% 23.1% 71.1% 28.9%
March 31, 2017 73.3% 26.7% 67.8% 32.2%
June 30, 2017 72.3% 27.7% 67.9% 32.1%
September 30, 2017 71.9% 28.1% 68.6% 31.4%
(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

Unit VolumeDollar Volume (1)
Three Months EndedDealer LoansPurchased LoansDealer LoansPurchased Loans
March 31, 202372.1 %27.9 %68.1 %31.9 %
June 30, 202372.4 %27.6 %68.6 %31.4 %
September 30, 202374.8 %25.2 %71.7 %28.3 %
December 31, 202377.2 %22.8 %75.0 %25.0 %
March 31, 202478.2 %21.8 %76.6 %23.4 %
(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

As of September 30, 2017March 31, 2024 and December 31, 2016,2023, the net Dealer Loans receivable balance was 70.1%69.2% and 74.6%67.7%, respectively, of the total net Loans receivable balance.

41
49



Results of Operations


The net Loan income (finance charge revenue less provision for credit losses expense) that we recognize over the life of a Loan equals the cash we collect from the underlying Consumer Loan less the cash we pay to the Dealer. We believe the economics of our business are best exhibited by recognizing net Loan income on a level-yield basis over the life of the Loan based on expected future net cash flows. Under the GAAP methodology we employ, which is known as the current expected credit loss model, or CECL, we are required to recognize:
•a significant provision for credit losses expense at the time of the Loan’s assignment to us for contractual net cash flows we do not expect to realize; and
•finance charge revenue in subsequent periods that is significantly in excess of our expected yield.

Due to the GAAP treatment of contractual net cash flows we do not expect to realize at the time of loan assignment (i.e. significant expense at the time of loan assignment, which is offset by higher revenue in subsequent periods), we do not believe the GAAP methodology we employ provides sufficient transparency into the economics of our business. For additional information, see Note 3 and Note 6 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Three Months Ended September 30, 2017March 31, 2024 Compared to Three Months Ended September 30, 2016March 31, 2023


The following is a discussion of our results of operations and income statement data on a consolidated basis.
 
(Dollars in millions, except per share data)For the Three Months Ended 
March 31,
 20242023 $ Change% Change
Revenue: 
Finance charges$469.2 $421.1 $48.1 11.4 %
Premiums earned21.9 17.4 4.5 25.9 %
Other income16.9 15.3 1.6 10.5 %
Total revenue508.0 453.8 54.2 11.9 %
Costs and expenses:
Salaries and wages78.5 77.2 1.3 1.7 %
General and administrative23.7 18.0 5.7 31.7 %
Sales and marketing23.9 22.1 1.8 8.1 %
Total operating expenses126.1 117.3 8.8 7.5 %
Provision for credit losses on forecast changes87.2 44.3 42.9 96.8 %
Provision for credit losses on new Consumer Loan assignments98.8 93.1 5.7 6.1 %
Total provision for credit losses186.0 137.4 48.6 35.4 %
Interest92.5 54.4 38.1 70.0 %
Provision for claims17.0 17.9 (0.9)-5.0 %
Total costs and expenses421.6 327.0 94.6 28.9 %
Income before provision for income taxes86.4 126.8 (40.4)-31.9 %
Provision for income taxes22.1 27.3 (5.2)-19.0 %
Net income$64.3 $99.5 $(35.2)-35.4 %
Net income per share:
Basic$5.15 $7.62 $(2.47)-32.4 %
Diluted$5.08 $7.61 $(2.53)-33.2 %
Weighted average shares outstanding:
Basic12,481,139 13,057,617 (576,478)-4.4 %
Diluted12,646,529 13,073,316 (426,787)-3.3 %
(Dollars in millions, except per share data)For the Three Months Ended 
 September 30,
 2017 2016 Change % Change
Revenue:       
    Finance charges$259.4
 $223.9
 $35.5
 15.9 %
    Premiums earned10.3
 10.7
 (0.4) -3.7 %
    Other income14.2
 12.0
 2.2
 18.3 %
       Total revenue283.9
 246.6
 37.3
 15.1 %
Costs and expenses:       
    Salaries and wages (1)33.7
 32.4
 1.3
 4.0 %
    General and administrative (1)14.2
 11.0
 3.2
 29.1 %
    Sales and marketing (1)14.2
 12.2
 2.0
 16.4 %
    Provision for credit losses25.7
 22.8
 2.9
 12.7 %
    Interest30.5
 25.1
 5.4
 21.5 %
    Provision for claims5.5
 6.6
 (1.1) -16.7 %
       Total costs and expenses123.8
 110.1
 13.7
 12.4 %
Income before provision for income taxes160.1
 136.5
 23.6
 17.3 %
    Provision for income taxes59.4
 50.6
 8.8
 17.4 %
Net income$100.7
 $85.9
 $14.8
 17.2 %
Net income per share:       
    Basic$5.19
 $4.22
 $0.97
 23.0 %
    Diluted$5.19
 $4.21
 $0.98
 23.3 %
Weighted average shares outstanding:       
    Basic19,407,344
 20,379,557
 (972,213) -4.8 %
    Diluted19,415,545
 20,384,624
 (969,079) -4.8 %
        
(1) Operating expenses$62.1
 $55.6
 $6.5
 11.7 %




42
50







Finance Charges. The increase of $35.5$48.1 million, or 15.9%11.4%, was primarily the result ofdue to an increase in the average net Loans receivable balance, partially offset by a decrease in the average yield on our Loan portfolio, as follows:
(Dollars in millions)For the Three Months Ended March 31,
 20242023Change
Average net Loans receivable balance$7,101.3 $6,356.0 $745.3 
Average yield on our Loan portfolio26.4 %26.5 %-0.1 %
(Dollars in millions)For the Three Months Ended September 30,
 2017 2016 Change
Average net Loans receivable balance$4,365.8
 $3,653.6
 $712.2
Average yield on our Loan portfolio23.8% 24.5% -0.7 %


The following table summarizes the impact each component had on the overall increase in finance charges for the three months ended September 30, 2017:March 31, 2024:
(In millions)Year over Year Change
Impact on finance charges:For the Three Months Ended March 31, 2024
Due to an increase in the average net Loans receivable balance$49.4 
Due to a decrease in the average yield(1.3)
Total increase in finance charges$48.1 
(In millions)Year over Year Change
Impact on finance charges:For the Three Months Ended September 30, 2017
Due to an increase in the average net Loans receivable balance$43.6
Due to a decrease in the average yield(8.1)
    Total increase in finance charges$35.5


The increase in the average net Loans receivable balance was primarily due to the dollar volume of new Consumer Loan assignments exceeding the principal collected on Loans receivable. The average yield on our Loan portfolio for the three months ended September 30, 2017 decreased as compared to the same period in 2016 due to lower yields on more recent Consumer Loan assignments.


Other Income.  Premiums Earned. The increase of $2.2$4.5 million, or 18.3%25.9%, was primarily due to growth in the size of our reinsurance portfolio, which resulted from growth in new Consumer Loan assignments and an increase in the average premium written per reinsured vehicle service contract in recent periods.

Operating Expenses. The increase of $8.8 million, or 7.5%, was primarily due to an increase in ancillary product profit sharing incomegeneral and administrative expenses of $5.7 million, or 31.7%, primarily due to growthincreases in our Loan portfolio.legal and technology systems expenses.


Operating ExpensesProvision for Credit Losses. The increase of $6.5$48.6 million, or 11.7%35.4%, was due to increases in provision for credit losses on forecast changes and provision for credit losses on new Consumer Loan assignments.

We recognize provision for credit losses on new Consumer Loan assignments for contractual net cash flows that are not expected to be realized at the time of assignment. We also recognize provision for credit losses on forecast changes in the amount and timing of expected future net cash flows subsequent to assignment. The following table summarizes the provision for credit losses for each of these components:

(In millions)For the Three Months Ended March 31,
Provision for Credit Losses20242023Change
Forecast changes$87.2 $44.3 $42.9 
New Consumer Loan assignments98.8 93.1 5.7 
Total$186.0 $137.4 $48.6 

The increase in provision for credit losses related to forecast changes was due to a decline in Consumer Loan performance and slower net cash flow timing during the first quarter of 2024 compared to the first quarter of 2023. During the first quarter of 2024, we decreased our estimate of future net cash flows by $30.8 million, or 0.3%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect a decrease in Consumer Loan prepayments, which remain at below-average levels. Historically, Consumer Loan prepayments have been lower in periods with less availability of consumer credit. During the first quarter of 2023, we increased our estimate of future net cash flows by $9.4 million, or 0.1%, to reflect stable forecasted collection rates during the period; however, we slowed our forecasted net cash flow timing to reflect a decrease in Consumer Loan prepayments.

The increase in provision for credit losses related to new Consumer Loan assignments was primarily due to the following:

Ana 24.1% increase in general and administrative expense of $3.2 million, or 29.1%, primarily asConsumer Loan assignment unit volume, partially offset by a result of an increase in legal fees.
An increase in sales and marketing expense of $2.0 million, or 16.4%, primarily due to an increase14.5% decrease in the size of our sales force.
An increase in salaries and wages expense of $1.3 million, or 4.0%, primarily related to our servicing function as a result of an increaseaverage provision per Consumer Loan assignment. The decrease in the number of team members.

Provision for Credit Losses.  Under GAAP, when the present value of forecasted future cash flows declines relative to our expectations at the time of assignment, aaverage provision for credit losses is recorded immediately as a current period expense and a corresponding allowance for credit losses is established. For purposes of calculating the required allowance, Dealer Loans are grouped by Dealer and Purchased Loans are grouped by month of purchase. As a result, regardless of the overall performance of the portfolio of Consumer Loans, a provision can be required if any individual Loan pool performs worse than expected. Conversely, a previously recorded provision can be reversed if any previously impaired individual Loan pool experiences an improvement in performance.

During the three months ended September 30, 2017, overallper Consumer Loan performance was generally consistent with our expectations at the start of the period. However, the performance of certain Loan pools declined from our expectations during the period, resulting in a provision for credit losses of $25.7 million for the three months ended September 30, 2017, of which $20.2 million related to Dealer Loans and $5.5 million related to Purchased Loans. During the three months ended September 30, 2016, overall Consumer Loan performance declined from our expectations at the start of the period, resulting in a provision for credit losses of $22.8 million for the three months ended September 30, 2016, of which $21.6 million related to Dealer Loans and $1.2 million related to Purchased Loans.


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Interest.  The increase of $5.4 million, or 21.5%,assignment was primarily due to ana decrease in the average advance rate for 2024 Consumer Loans.

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Interest. The increase in interest expense of $38.1 million, or 70.0%, was due to:
•An increase in our average cost of debt, which was primarily a result of higher interest rates on recently-completed or -extended secured financings and recently-issued senior notes and the repayment of older secured financings and senior notes with lower interest rates.
•An increase in the average outstanding debt principal balance, which was primarily due to debt proceedsborrowing used to fund the growth inof our Loanloan portfolio and stock repurchases.

The following table showspresents the change in interest expense, the average outstanding debt principal balance, and the average cost of debt for the three months ended September 30, 2017 and 2016:March 31, 2024 as compared to the three months ended March 31, 2023:
(Dollars in millions)For the Three Months Ended March 31,
20242023Change
Interest expense$92.5 $54.4 $38.1 
Average outstanding debt balance (1)5,306.8 4,594.7 712.1 
Average cost of debt7.0 %4.7 %2.3 %
(1) Includes the unamortized debt discount.
(Dollars in millions)For the Three Months Ended September 30,
 2017 2016 Change
Interest expense$30.5
 $25.1
 $5.4
Average outstanding debt principal balance (1)2,997.8
 2,513.0
 484.8
Average cost of debt4.1% 4.0% 0.1%

(1)Includes the unamortized debt discount and excludes deferred debt issuance costs.

Provision for Claims.  The decrease of $1.1 million, or 16.7%, was due to a decrease in claims paid per reinsured vehicle service contract and a decrease in the size of our reinsurance portfolio.

Provision for Income Taxes.Taxes. For the three months ended September 30, 2017 and 2016, ourMarch 31, 2024, the effective income tax rate was 37.1%.


Nine Months Ended September 30, 2017 Comparedincreased to Nine Months Ended September 30, 2016

The following is a discussion of our results of operations and income statement data on a consolidated basis.
(Dollars in millions, except per share data)For the Nine Months Ended 
 September 30,
 2017 2016 Change % Change
Revenue:       
    Finance charges$749.2
 $641.9
 107.3
 16.7 %
    Premiums earned30.9
 32.4
 (1.5) -4.6 %
    Other income42.6
 38.7
 3.9
 10.1 %
       Total revenue822.7
 713.0
 109.7
 15.4 %
Costs and expenses:       
    Salaries and wages (1)101.9
 95.2
 6.7
 7.0 %
    General and administrative (1)42.1
 35.7
 6.4
 17.9 %
    Sales and marketing (1)43.7
 37.8
 5.9
 15.6 %
    Provision for credit losses68.0
 62.8
 5.2
 8.3 %
    Interest88.0
 71.5
 16.5
 23.1 %
    Provision for claims17.6
 20.4
 (2.8) -13.7 %
       Total costs and expenses361.3
 323.4
 37.9
 11.7 %
Income before provision for income taxes461.4
 389.6
 71.8
 18.4 %
    Provision for income taxes168.3
 144.4
 23.9
 16.6 %
Net income$293.1
 $245.2
 $47.9
 19.5 %
Net income per share:       
    Basic$15.01
 $12.02
 $2.99
 24.9 %
    Diluted$14.99
 $12.01
 $2.98
 24.8 %
Weighted average shares outstanding:       
    Basic19,528,175
 20,398,037
 (869,862) -4.3 %
    Diluted19,547,674
 20,415,981
 (868,307) -4.3 %
        
(1) Operating expenses$187.7
 $168.7
 19.0
 11.3 %



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Finance Charges. The increase of $107.3 million, or 16.7%, was primarily the result of an increase in the average net Loans receivable balance partially offset by a decrease in the average yield on our Loan portfolio, as follows:
(Dollars in millions)For the Nine Months Ended September 30,
 2017 2016 Change
Average net Loans receivable balance$4,184.3
 $3,436.2
 $748.1
Average yield on our Loan portfolio23.9% 24.9% -1.0 %

The following table summarizes the impact each component had on the overall increase in finance charges25.6% from 21.5% for the nine months ended September 30, 2017:
(In millions)Year over Year Change
Impact on finance charges:For the Nine Months Ended September 30, 2017
Due to an increase in the average net Loans receivable balance$139.7
Due to a decrease in the average yield(32.4)
    Total increase in finance charges$107.3

same period in 2023. The increase in the average net Loans receivable balance was primarily due to the dollar volumeimpact of new Consumer Loan assignments exceeding the principal collected on Loans receivable.  The average yield on our Loan portfolio for the nine months ended September 30, 2017 decreased as compared to the same periodtax benefits recognized in 2016 due to lower yields on more recent Consumer Loan assignments.

Other Income.  The increase of $3.9 million, or 10.1%, was primarily due to an increase in ancillary product profit sharing income due to growth in our Loan portfolio, partially offset by a decrease in GPS Starter Interrupt Device fee income due to a decrease in the number of units purchased by Dealers from third party providers in the current year.

Operating Expenses.  The increase of $19.0 million, or 11.3%, was primarily due to the following:

An increase in salaries and wages expense of $6.7 million, or 7.0%, primarily related to our servicing function as a result of an increase in the number of team members.
An increase in general and administrative expense of $6.4 million, or 17.9%, primarily as a result of an increase in legal fees.
An increase in sales and marketing expense of $5.9 million, or 15.6%, primarily due to an increase in the size of our sales force.

Provision for Credit Losses.  During the nine months ended September 30, 2017, overall Consumer Loan performance was generally consistent with our expectations at the start of the period. However, the performance of certain Loan pools declined from our expectations during the period, resulting in a provision for credit losses of $68.0 million for the nine months ended September 30, 2017, of which $55.6 million related to Dealer Loans and $12.4 million related to Purchased Loans. During the nine months ended September 30, 2016, overall Consumer Loan performance declined from our expectations at the start of the period, resulting in a provision for credit losses of $62.8 million for the nine months ended September 30, 2016, of which $61.3 million related to Dealer Loans and $1.5 million related to Purchased Loans.


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Interest.  The increase of $16.5 million, or 23.1%, as compared to the same period in 2016 was primarily due to an increase in the average outstanding debt principal balance due to debt proceeds used to fund the growth in our Loan portfolio and stock repurchases. The following table shows interest expense, the average outstanding debt balance, and the average cost of debt for the nine months ended September 30, 2017 and 2016:
(Dollars in millions)For the Nine Months Ended September 30,
 2017 2016 Change
Interest expense$88.0
 $71.5
 $16.5
Average outstanding debt principal balance (1)2,890.8
 2,395.1
 495.7
Average cost of debt4.1% 4.0% 0.1%
(1)Includes the unamortized debt discount and excludes deferred debt issuance costs.

Provision for Income Taxes.  For the nine months ended September 30, 2017, the effective tax rate decreased to 36.5% from 37.1% in the same period in 2016. The decrease was primarily due to the adoption of new accounting guidance on January 1, 2017, which reduced our current year provision for income taxes by $2.5 million for tax benefits2023 related to our stock-based compensation plans.plan. For additional information, see Note 3 and Note 1112 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.


Properties

The COVID-19 pandemic had a significant impact on our work environment, as the vast majority of our team members began working remotely. Because our remote operations and processes proved successful early on, we now pursue a “remote first” strategy to take advantage of the national talent pool and an increased rate of team member satisfaction. While remote work has become the primary experience for most of our team members, we do have team members that, due to their personal preference or the nature of their responsibilities, have continued to work primarily in one of our office properties. Additionally, we have various on-site meetings, events, and team building activities for which in-person attendance is encouraged. Therefore, we believe we have a continuing need for some amount of office space.

As a result of the “remote first” strategy, we have significant excess space in the two office buildings that we own, which are located in Southfield, Michigan. After exploring options to reduce our office space, we have made the preliminary decision to sell the larger building and consolidate into the smaller building that has served as our headquarters since 1993.

The building that we intend to sell is currently scheduled for auction in mid-May 2024. As there is currently a significant amount of unoccupied office space in our region, we do not know whether the auction will result in a sale of the building. Additionally, we believe the market value of the building and its improvements, together with the related land and land improvements and office furniture and equipment, is significantly less than the carrying value of $27.5 million. We have evaluated the facts and circumstances of the potential auction sale, and we do not believe that the building currently meets all of the criteria necessary for us to reclassify it as held for sale. If we were to reclassify the building as held for sale, we would record an impairment charge to reduce its carrying value to its estimated market value less costs to sell.

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Liquidity and Capital Resources


We need capital to maintain and grow our business. Our primary sources of capital are cash flows from operating activities, collections of Consumer Loans, and borrowings under: (1) aour revolving secured line of credit;credit facility; (2) Warehouse facilities; (3) Term ABS financings; and (4) senior notes. There are various restrictive covenants to which we are subject under each financing arrangement, and we were in compliance with those covenants as of September 30, 2017.March 31, 2024. For information regarding these financings and the covenants included in the related documents, see Note 810 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.


On February 23, 2017,16, 2024, we extended the $100.0 million Term ABS financing that we entered into on January 29, 2021 and to which we refer as Term ABS 2021-1. Under the amendment effecting the extension, the date on which the financing will cease to revolve has been extended from December 16, 2024 to February 17, 2026.

On February 27, 2024, we completed a $350.0$200.0 million Term ABS financing, which was used to repay outstanding indebtedness.indebtedness and for general corporate purposes. The financing has an expected average annualized cost of approximately 3.1%7.8% (including placement agent fees and other costs), and it will revolve for 36 months, after which it will amortize based upon the cash flows on the underlying Loans.

On March 28, 2024, we completed a $500.0 million Term ABS financing, which was used to repay outstanding indebtedness and for general corporate purposes. The financing has an expected average annualized cost of 6.4% (including initial purchaser’spurchasers' fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the contributedunderlying Loans.

On April 28, 2017, we increased the financing amount on Warehouse Facility IV from $75.0 million to $100.0 million and extended the date on which the facility will cease to revolve from April 30, 2018 to April 30, 2020. The interest rate on borrowings under the facility increased from LIBOR plus 200 basis points to LIBOR plus 225 basis points. There were no other material changes to the terms of the facility.

On June 28, 2017, we extended the maturity of our revolving secured line of credit facility with a commercial bank syndicate from June 22, 2019 to June 22, 2020. We also increased the amount of the facility from $310.0 million to $345.0 million until June 22, 2019, when the amount of the facility would decrease to $300.0 million. There were no other material changes to the terms of the facility. On October 19, 2017, we further increased the amount of the facility to $350.0 million until June 22, 2019 and changed the amount to which the facility will decrease on that date from $310.0 million to $315.0 million. There were no material changes to the terms of the facility.

On June 29, 2017, we completed a $450.0 million Term ABS financing, which was used to repay outstanding indebtedness. The financing has an expected annualized cost of approximately 3.0% (including the initial purchaser’s fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the contributed Loans.

On July 18, 2017, we extended the date on which Warehouse Facility VI will cease to revolve from September 30, 2018 to September 30, 2020. There were no other material changes to the terms of the facility.

On October 26, 2017, we completed a $350.0 million Term ABS financing, which was used to repay outstanding indebtedness. The financing has an expected annualized cost of approximately 3.2% (including the initial purchaser’s fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the contributed Loans.


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Cash and cash equivalents were $8.4 million as of September 30, 2017March 31, 2024 and $13.2 million as of December 31, 2023. As of March 31, 2024 and December 31, 2016 was $4.92023, we had $1,355.5 million and $14.6$1,505.8 million, respectively.  As of September 30, 2017 and December 31, 2016, we had $889.5 million and $948.0 millionrespectively, in unused and available lines of credit, respectively.credit. Our total balance sheet indebtedness increased $397.1 million to $3,000.8$5,611.5 million as of September 30, 2017March 31, 2024 from $2,603.7$5,067.5 million as of December 31, 2016 primarily due to the growth in new Consumer Loan assignments and stock repurchases.2023.


Contractual Obligations

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A summary of our scheduled principal debt maturities as of September 30, 2017March 31, 2024 is as follows:
(In millions) 
YearScheduled Principal Debt Maturities (1)
Remainder of 2024$627.8 
20251,800.9 
20262,094.4 
2027519.1 
2028610.1 
Over five years— 
Total$5,652.3 
(In millions)  
Year Scheduled Principal Debt Maturities (1)
Remainder of 2017 $174.7
2018 818.4
2019 1,023.5
2020 453.6
2021 300.0
Over five years 250.0
Total $3,020.2
(1)The principal maturities of certain financings are estimated based on forecasted collections.

(1)The principal maturities of certain financings are estimated based on forecasted collections.

Based upon anticipated cash flows, management believes that cash flows from operations and itsour various financing alternatives will provide sufficient financing for debt maturities and for future operations. Our ability to borrow funds may be impacted by economic and financial market conditions. If the various financing alternatives were to become limited or unavailable to us, our operations and liquidity could be materially and adversely affected.


Critical Accounting Estimates


Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we review our accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. Item 7 of our Annual Report on Form 10-K for the year ended December 31, 20162023 discusses several critical accounting estimates, which we believe involve a high degree of judgment and complexity. There have been no material changes to the estimates and assumptions associated with these accounting estimates from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2016.2023.

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Off-Balance Sheet Arrangements


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Forward-Looking Statements


We make forward-looking statements in this report and may make such statements in future filings with the Securities and Exchange Commission (“SEC”). We may also make forward-looking statements in our press releases or other public or shareholder communications. Our forward-looking statements are subject to risks and uncertainties and include information about our expectations and possible or assumed future results of operations. When we use any of the words “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “assume,” “forecast,” “estimate,” “intend,” “plan,” “target”“target,” or similar expressions, we are making forward-looking statements.


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We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements. These forward-looking statements represent our outlook only as of the date of this report. While we believe that our forward-looking statements are reasonable, actual results could differ materially since the statements are based on our current expectations, which are subject to risks and uncertainties. Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016,2023, other risk factors discussed herein or listed from time to time in our reports filed with the SEC, and the following:


Industry, Operational, and Macroeconomic Risks
•Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations.
We may be unable to execute our business strategy due to current economic conditions.
We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business.
The terms of our debt limit how we conduct our business.
A violation of the terms of our Term ABS facilities or Warehouse facilities could have a material adverse impact on our operations.
The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity and results of operations.
Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations and adversely affect our financial condition.
•Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully.
We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt.
Interest rate fluctuations may adversely affect our borrowing costs, profitability and liquidity.
Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition and results of operations.
We may incur substantially more debt and other liabilities.  This could exacerbate further the risks associated with our current debt levels.

The regulation to which we are or may become subject could result in a material adverse effect on our business.
•Adverse changes in economic conditions, the automobile or finance industries, or the non-prime consumer market could adversely affect our financial position, liquidity, and results of operations, the ability of key vendors that we depend on to supply us with services, and our ability to enter into future financing transactions.
Litigation we are involved in from time to time may adversely affect our financial condition, results of operations and cash flows.
Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations.

Our dependence on technology could have a material adverse effect on our business. 

Our use of electronic contracts could impact our ability to perfect our ownership or security interest in Consumer Loans.



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•Reliance on third parties to administer our ancillary product offerings could adversely affect our business and financial results.
•We are dependent on our senior management and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably.
•Our reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace.
•An outbreak of contagious disease or other public health emergency could materially and adversely affect our business, financial condition, liquidity, and results of operations.
•The concentration of our Dealers in several states could adversely affect us.
•Reliance on our outsourced business functions could adversely affect our business.
Failure•Our ability to properly safeguard confidential consumerhire and team member informationretain foreign engineering personnel could subject usbe hindered by immigration restrictions.
•We may be unable to liability, decreaseexecute our profitabilitybusiness strategy due to current economic conditions.
•Natural disasters, climate change, military conflicts, acts of war, terrorist attacks and damagethreats, or the escalation of military activity in response to terrorist attacks or otherwise may negatively affect our reputation.business, financial condition, and results of operations.
•Governmental or market responses to climate change and related environmental issues could have a material adverse effect on our business.
•A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interests which may conflict with the interests of our other security holders.

RelianceCapital and Liquidity Risks
•We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business.
•The terms of our debt limit how we conduct our business.
•A violation of the terms of our asset-backed secured financings or revolving secured warehouse facilities could have a material adverse impact on our outsourcedoperations.
•Our substantial debt could negatively impact our business, functions couldprevent us from satisfying our debt obligations, and adversely affect our business.financial condition.

•We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt.
•Interest rate fluctuations may adversely affect our borrowing costs, profitability, and liquidity.
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•Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition, and results of operations.
•We may incur substantially more debt and other liabilities. This could exacerbate further the risks associated with our current debt levels.
•The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity, and results of operations.

Technology and Cybersecurity Risks
•Our ability to hire and retain foreigndependence on technology could have a material adverse effect on our business.
•We depend on secure information technology, personneland a breach of our systems or those of our third-party service providers could be hindered by immigration restrictions.
Natural disasters, acts of war, terrorist attacksresult in our experiencing significant financial, legal, and threats or the escalation of military activity in response to these attacks or otherwise may negativelyreputational exposure and could materially adversely affect our business, financial condition, and results of operations.

•Our use of electronic contracts could impact our ability to perfect our ownership or security interest in Consumer Loans.
•Failure to properly safeguard confidential consumer and team member information could subject us to liability, decrease our profitability, and damage our reputation.

Legal and Regulatory Risks
•Litigation we are involved in from time to time may adversely affect our financial condition, results of operations, and cash flows.
•Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations.
•The regulations to which we are or may become subject could result in a material adverse effect on our business.

Other factors not currently anticipated by management may also materially and adversely affect our business, financial condition, and results of operations. We do not undertake, and expressly disclaim any obligation, to update or alter our statements whether as a result of new information, future events, or otherwise, except as required by applicable law.


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ITEM 3.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


Refer to our Annual Report on Form 10-K for the year ended December 31, 20162023 for a complete discussion of our market risk. There have been no material changes to the market risk information included in our 2016 Annual Report on Form 10-K.10-K for the year ended December 31, 2023.

ITEM 4.          CONTROLS AND PROCEDURES.


(a) Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officerprincipal executive and Chief Financial Officer,principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officerprincipal executive officer and Chief Financial Officerprincipal financial officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officerprincipal executive officer and Chief Financial Officer,principal financial officer, as appropriate to allow timely decisions regarding required disclosure.


(b) Internal Control Over Financial Reporting. There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


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57



PART II. - OTHER INFORMATION


ITEM 1.          LEGAL PROCEEDINGS


In the normal course of business and as a result of the consumer-oriented nature of the industry in which we operate, we and other industry participants are frequently subject to various consumer claims, litigation, and regulatory investigations seeking damages, fines, and statutory penalties. The claims allege, among other theories of liability, violations of state, federal, and foreign truth-in-lending, credit availability, credit reporting, consumer protection, warranty, debt collection, insurance, and other consumer-oriented laws and regulations, including claims seeking damages for alleged physical and mental damagesharm relating to the repossession and sale of consumers’ vehicles and other debt collection activities. As the assignee of Consumer Loans originated by Dealers, we may also be named as a co-defendant in lawsuits filed by consumers principally against Dealers. We may also have disputes and litigation with Dealers. The claims may allege, among other theories of liability, that we breached ourthe Dealer servicing agreement. We may also have disputes and litigation with vendors and other third parties. The claims may allege, among other theories of liability, that we breached a license agreement or contract. The damages, fines, and penalties that may be claimed by consumers, regulatory agencies, Dealers, vendors, or Dealersother third parties in these types of matters can be substantial. The relief requested by plaintiffs varies but may include requests for compensatory, statutory, and punitive damages and injunctive relief, and plaintiffs may seek treatment as purported class actions.actions or they may file individual arbitration demands for which arbitration providers may request separate filing fees. An adverse ultimate disposition in any action to which we are a party or otherwise subject, or the requirement to pay filing fees for a large number of individual arbitration demands, could have a material adverse impact on our financial position, liquidity, and results of operations.


For a description of significant litigation to which we are a party, see Note 1516 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.


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ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Stock Repurchases

The following table summarizes stock repurchases for the three months ended March 31, 2024:

ISSUER PURCHASES OF EQUITY SECURITIES
PeriodTotal Number of Shares PurchasedAverage Price Paid per Share (1)Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 1 to January 31, 2024224,118 (3)$533.54 223,808 1,582,199
February 1 to February 29, 202450,063 (4)549.11 48,296 1,533,903
March 1 to March 31, 202477,187 (5)548.88 77,152 1,456,751
Total351,368 $539.13 349,256 

(1)    Average price paid per share excludes excise tax. As of January 1, 2023, our share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act. Any excise tax incurred is recognized as part of the cost basis of the shares acquired in the Consolidated Statements of Shareholders’ Equity.
(2)    On August 21, 2023, our board of directors authorized the repurchase by us from time to time of up to two million shares of our common stock (the "August 2023 Authorization"). The August 2023 Authorization, which was announced on August 24, 2023, does not have a specified expiration date. Repurchases under the August 2023 Authorization may be made in the open market, through privately negotiated transactions, through block trades, pursuant to trading plans adopted in accordance with Rule 10b5‑1 under the Securities Exchange Act of 1934 or otherwise.
(3)    Amount includes 310 shares of common stock released to us by team members as payment of tax withholdings upon the settlement of restricted stock units in shares of common stock and the vesting of restricted stock units.
(4)    Amount includes 1,767 shares of common stock released to us by team members as payment of tax withholdings upon the settlement of restricted stock units in shares of common stock and the vesting of restricted stock units.
(5)    Amount includes 35 shares of common stock released to us by team members as payment of tax withholdings upon the settlement of restricted stock units in shares of common stock and the vesting of restricted stock units.

ITEM 5.          OTHER INFORMATION

During the quarter ended March 31, 2024, there were no Rule 10b5‑1 trading arrangements (as defined in Item 408(a) of Regulation S‑K) or non‑Rule 10b5‑1 trading arrangements (as defined in Item 408(c) of Regulation S‑K) adopted or terminated by any director or officer (as defined in Rule 16a‑1(f) under the Exchange Act) of Credit Acceptance Corporation.
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ITEM 6.          EXHIBITS
Exhibit

No.
 
Description
4.734.132
IndentureFifth Amendment to Loan and Security Agreement, dated as of February 23, 2017, between16, 2024, among the Company, Credit Acceptance Auto Loan Trust 2017-1Funding LLC 2021-1, and Wells FargoFifth Third Bank, National Association (incorporated by reference to an exhibitExhibit 4.132 to the Company’sCompany's Current Report on Form 8-K datedfiled February 23, 2017)22, 2024).
4.744.133
Sale and Servicing Agreement, dated as of February 23, 201727, 2024 among the Company, Credit Acceptance Auto Loan Trust 2017-1,2024-A, Credit Acceptance Funding LLC 2017-1,2024-A, and Wells Fargo Bank, National Association (incorporatedComputershare Trust Company, N.A.(incorporated by reference to an exhibitExhibit 4.133 to the Company’sCompany's Current Report on Form 8-K datedfiled February 23, 2017)29, 2024).
4.754.134
Backup Servicing Agreement dated as of February 23, 2017,27, 2024 among the Company, Credit Acceptance Funding LLC 2017-1, Credit Acceptance Auto Loan Trust 2017-1,2024-A, Credit Acceptance Funding LLC 2024-A, and Wells Fargo Bank, National AssociationComputershare Trust Company, N.A. (incorporated by reference to an exhibitExhibit 4.134 to the Company’sCompany's Current Report on Form 8-K datedfiled February 23, 2017)29, 2024).
4.764.135
Amended and Restated Trust Agreement dated as of February 23, 2017, between Credit Acceptance Funding LLC 2017-1 and U.S. Bank Trust National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated February 23, 2017).
4.77
Sale and Contribution Agreement dated as of February 23, 2017, between the Company and Credit Acceptance Funding LLC 2017-1(incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated February 23, 2017).
4.78
Amended and Restated Intercreditor Agreement dated February 23, 2017,27, 2024 among the Company, CAC Warehouse Funding CorporationLLC II, CAC Warehouse Funding LLC IV, CAC Warehouse Funding LLC V, CAC Warehouse Funding LLC VI, CAC Warehouse Funding LLC VIII, Credit Acceptance Funding LLC 2017-1,2024-A, Credit Acceptance Funding LLC 2016-3,2023-5, Credit Acceptance Funding LLC 2016-2,2023-A, Credit Acceptance Funding LLC 2016-1,2023-3, Credit Acceptance Funding LLC 2015-2,2023-2, Credit Acceptance Funding LLC 2015-1,2023-1, Credit Acceptance Funding LLC 2014-2,2022-3, Credit Acceptance Funding LLC 2014-1,2022-2, Credit Acceptance Funding LLC 2022-1, Credit Acceptance Funding LLC 2021-4, Credit Acceptance Funding LLC 2021-3, Credit Acceptance Funding LLC 2021-2, Credit Acceptance Funding LLC 2021-1, Credit Acceptance Funding LLC 2019-2, Credit Acceptance Auto Loan Trust 2017-1,2024-A, Credit Acceptance Auto Loan Trust 2016-3,2023-5, Credit Acceptance Auto Loan Trust 2016-2,2023-3, Credit Acceptance Auto Loan Trust 2015-2, 2023-2,Credit Acceptance Auto Loan Trust 2015-1,2023-1, Credit Acceptance Auto Loan Trust 2014-2,2022-3, Credit Acceptance Auto Loan Trust 2014-1, Wells Fargo2022-1, Credit Acceptance Auto Loan Trust 2021-4, Credit Acceptance Auto Loan Trust 2021-3, Credit Acceptance Auto Loan Trust 2021-2, Computershare Trust Company, N.A., Fifth Third Bank, National Association, as agent, Fifth Third Bank, as agent, Bank of Montreal, as agent,Comerica Bank, Flagstar Bank, FSB, as agentNational Association, and ComericaCitizens Bank, as agentN.A., (incorporated by reference to an exhibitExhibit 4.135 to the Company’sCompany's Current Report on Form 8-K datedfiled February 23, 2017)29, 2024).
4.794.136
Fourth Amendment to LoanSale and SecurityContribution Agreement dated as of April 28, 2017 amongFebruary 27, 2024, between the Company CAC Warehouseand Credit Acceptance Funding LLC IV, Bank of Montreal, BMO Capital Markets Corp., and Wells Fargo Bank, National Association2024-A (incorporated by reference to an exhibitExhibit 4.136 to the Company’sCompany's Current Report on Form 8-K dated April 28, 2017)filed February 29, 2024).
4.804.137
Third Amendment to Sixth Amended and Restated Credit Agreement and ExtensionTrust Agreement, dated as of June 28, 2017February 27, 2024, among Credit Acceptance Funding LLC 2024-A, each of the Company,initial members of the Banks which are parties thereto from time to time,Board of Trustees of the Trust, and Comerica Bank as Administrative Agent and Collateral Agent for the BanksComputershare Delaware Trust Company (incorporated by reference to an exhibitExhibit 4.137 to the Company’sCompany's Current Report on Form 8-K dated June 28, 2017)filed February 29, 2024).

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4.814.138
Indenture, dated as of June 29, 2017,February 27, 2024, between Credit Acceptance Auto Loan Trust 2017-22024-A and Wells Fargo Bank, National AssociationComputershare Trust Company, N.A. (incorporated by reference to an exhibitExhibit 4.138 to the Company’sCompany's Current Report on Form 8-K dated Junefiled February 29, 2017)2024).
4.824.139
Indenture, dated as of March 28, 2024, between Credit Acceptance Auto Loan Trust 2024-1 and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 4.139 to the Company's Current Report on Form 8 K filed April 3, 2024).
4.140
Sale andBackup Servicing Agreement, dated as of June 29, 2017March 28, 2024, among the Company, Credit Acceptance Auto Loan Trust 2017-2,2024-1, Credit Acceptance Funding LLC 2017-2,2024-1, and Wells Fargo Bank, National AssociationComputershare Trust Company, N.A. (incorporated by reference to an exhibitExhibit 4.140 to the Company’sCompany's Current Report on Form 8-K dated June 29, 2017)filed April 3, 2024).
4.834.141
Backup Servicing Agreement dated as of June 29, 2017, among the Company, Credit Acceptance Funding LLC 2017-2, Credit Acceptance Auto Loan Trust 2017-2, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 29, 2017).
4.84
Amended and Restated Trust Agreement dated as of June 29, 2017, between Credit Acceptance Funding LLC 2017-2 and U.S. Bank Trust National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 29, 2017).
4.85
Sale and Contribution Agreement dated as of June 29, 2017, between the Company and Credit Acceptance Funding LLC 2017-2 (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated June 29, 2017).
4.86
Amended and Restated Intercreditor Agreement, dated June 29, 2017,March 28, 2024, among the Company, CAC Warehouse Funding CorporationLLC II, CAC Warehouse Funding LLC IV, CAC Warehouse Funding LLC V, CAC Warehouse Funding LLC VI, CAC Warehouse Funding LLC VIII, Credit Acceptance Funding LLC 2017-2,2024-1, Credit Acceptance Funding LLC 2017-1,2024-A, Credit Acceptance Funding LLC 2016-3,2023-5, Credit Acceptance Funding LLC 2016-2,2023-A, Credit Acceptance Funding LLC 2016-1,2023-3, Credit Acceptance Funding LLC 2015-2,2023-2, Credit Acceptance Funding LLC 2015-1,2023-1, Credit Acceptance Funding LLC 2014-2,2022-3, Credit Acceptance Funding LLC 2022-2, Credit Acceptance Funding LLC 2022-1, Credit Acceptance Funding LLC 2021-4, Credit Acceptance Funding LLC 2021-3, Credit Acceptance Funding LLC 2021-2, Credit Acceptance Funding LLC 2021-1, Credit Acceptance Funding LLC 2019-2, Credit Acceptance Auto Loan Trust 2017-2,2024-1, Credit Acceptance Auto Loan Trust 2017-1,2024-A, Credit Acceptance Auto Loan Trust 2016-3,2023-5, Credit Acceptance Auto Loan Trust 2016-2,2023-3, Credit Acceptance Auto Loan Trust 2015-2,2023-2, Credit Acceptance Auto Loan Trust 2015-1,2023-1, Credit Acceptance Auto Loan Trust 2014-2, Wells Fargo2022-3, Credit Acceptance Auto Loan Trust 2022-1, Credit Acceptance Auto Loan Trust 2021-4, Credit Acceptance Auto Loan Trust 2021-3, Credit Acceptance Auto Loan Trust 2021-2, Computershare Trust Company, N.A., Fifth Third Bank, National Association, as agent, Fifth Third Bank, as agent, Bank of Montreal, as agent,Comerica Bank, Flagstar Bank, FSB, as agentNational Association, and ComericaCitizens Bank, as agentN.A. (incorporated by reference to an exhibitExhibit 4.141 to the Company’s Current Report on Form 8-K dated June 29, 2017)filed April 3, 2024).
4.874.142
First Amendment to LoanSale and SecurityContribution Agreement, dated as of July 18, 2017 amongMarch 28, 2024, between the Company CAC Warehouseand Credit Acceptance Funding LLC VI and Flagstar Bank, FSB2024-1 (incorporated by reference to an exhibitExhibit 4.142 to the Company’s Current Report on Form 8-K, dated October 26, 2017)8 K filed April 3, 2024).
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4.884.143
IndentureAmended and Restated Trust Agreement, dated as of October 26, 2017, betweenMarch 28, 2024, among Credit Acceptance Auto LoanFunding LLC 2024-1, each of the initial members of the Board of Trustees of the Trust, 2017-3 and Wells Fargo Bank, National AssociationComputershare Delaware Trust Company (incorporated by reference to an exhibitExhibit 4.143 to the Company’sCompany's Current Report on Form 8-K dated October 26, 2017)filed April 3, 2024).

4.894.144
Sale and Servicing Agreement, dated as of October 26, 2017March 28, 2024, among the Company, Credit Acceptance Auto Loan Trust 2017-3,2024-1, Credit Acceptance Funding LLC 2017-3,2024-1, and Wells Fargo Bank, National AssociationComputershare Trust Company, N.A. (incorporated by reference to an exhibitExhibit 4.144 to the Company’sCompany's Current Report on Form 8-K dated October 26, 2017)filed April 3, 2024).

4.9031.1
Backup Servicing Agreement dated as of October 26, 2017, among the Company, Credit Acceptance Funding LLC 2017-3, Credit Acceptance Auto Loan Trust 2017-3, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).


4.91
Amended and Restated Trust Agreement dated as of October 26, 2017, between Credit Acceptance Funding LLC 2017-3 and U.S. Bank Trust National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).

4.92
Sale and Contribution Agreement dated as of October 26, 2017, between the Company and Credit Acceptance Funding LLC 2017-3 (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).

4.93
Amended and Restated Intercreditor Agreement dated October 26, 2017, among the Company, CAC Warehouse Funding Corporation II, CAC Warehouse Funding LLC IV, CAC Warehouse Funding LLC V, CAC Warehouse Funding LLC VI, Credit Acceptance Funding LLC 2017-3, Credit Acceptance Funding LLC 2017-2, Credit Acceptance Funding LLC 2017-1, Credit Acceptance Funding LLC 2016-3, Credit Acceptance Funding LLC 2016-2, Credit Acceptance Funding LLC 2016-1, Credit Acceptance Funding LLC 2015-2, Credit Acceptance Funding LLC 2015-1, Credit Acceptance Auto Loan Trust 2017-3, Credit Acceptance Auto Loan Trust 2017-2, Credit Acceptance Auto Loan Trust 2017-1, Credit Acceptance Auto Loan Trust 2016-3, Credit Acceptance Auto Loan Trust 2016-2, Credit Acceptance Auto Loan Trust 2015-2, Credit Acceptance Auto Loan Trust 2015-1, Wells Fargo Bank, National Association, as agent, Fifth Third Bank, as agent, Bank of Montreal, as agent, Flagstar Bank, FSB, as agent and Comerica Bank, as agent (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated October 26, 2017).

4.94
New Bank Addendum to the Sixth Amended and Restated Credit Agreement dated as of October 19, 2017 among the Company, each of the Banks which are parties thereto, and Comerica Bank, as agent.
4.95
Assignment Agreement to the Sixth Amended and Restated Credit Agreement dated as of October 19, 2017 among the Company, the Banks signatory thereto, and Comerica Bank, as agent.

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10.19
Amendment to Shareholder Agreement dated as of September 15, 2017, between Credit Acceptance Corporation and Donald A. Foss *
31.1
Certification of Chief Executive Officerprincipal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officerprincipal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Chief Executive Officerprincipal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of Chief Financial Officerprincipal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101(INS)101(SCH)XBRL Instance Document.
101(SCH)Inline XBRL Taxonomy Extension Schema Document.
101(CAL)Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101(DEF)Inline XBRL Taxonomy Extension Definition Linkbase Document.
101(LAB)Inline XBRL Taxonomy Extension Label Linkbase Document.
101(PRE)Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (included in the Exhibit 101 Inline XBRL Document Set).
*Management contract or compensatory plan or arrangement.

61
*    Management contract or compensatory plan or arrangement.

Unless otherwise noted, the Company’s commission file number for all exhibits incorporated by reference herein is 000-20202.


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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


CREDIT ACCEPTANCE CORPORATION
(Registrant)
By:/s/ Kenneth S. BoothJay D. Martin
Kenneth S. Booth Jay D. Martin
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
Date:OctoberApril 30, 20172024


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