CACC filing — read by section

Item 8. Financial Statements and Supplementary Data

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 
 
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 
 Page 
 Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) 
 47 
 
 Consolidated Balance Sheets as of December 31, 2024 and 2023 49 
 
 Consolidated Statements of Income for the years ended December 31, 2024, 2023, and 2022 50 
 
 Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023, and 2022 51 
 
 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2024, 2023, and 2022 52 
 
 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022 53 
 
 Notes to Consolidated Financial Statements 54 
 
 46 

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
 
 Board of Directors and Shareholders 
 Credit Acceptance Corporation 
 
 Opinion on the financial statements 
 We have audited the accompanying consolidated balance sheets of Credit Acceptance Corporation (a Michigan corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. 
 
 We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 12, 2025 expressed an unqualified opinion. 
 
 Basis for opinion 
 These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 
 
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 
 
 Critical audit matter 
 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 
 
 Finance Charge Revenue and Allowance for Credit Losses 
 As described further in Notes 2 and 5 to the consolidated financial statements, the Company recorded $1,992.7 million in finance charge revenue for the period ended December 31, 2024 and an allowance for credit losses of $3,438.8 million on loans receivable of $11,289.1 million for a net carrying amount of loan receivables of $7,850.3 million as of December 31, 2024. 
 
 Finance charge revenue is determined by applying the effective interest rate to the net carrying amount of the loan receivable. The effective interest rate is based on contractual future net cash flows. The allowance for credit losses is then estimated by discounting the expected future net cash flows at the same effective interest used in determining finance charge revenue. Expected future net cash flows are estimated using a statistical model that considers a number of credit quality indicators to derive the amount of those expected future net cash flows. We identified finance charge revenue and allowance for credit losses as a critical audit matter. 
 47 

 The principal considerations for our determination that finance charge revenue and allowance for credit losses is a critical audit matter are the high degree of estimation uncertainty in management’s modeling of expected future net cash flows. Management’s statistical model used to determine expected future net cash flows required complex auditor judgment to evaluate the reasonableness of the outcomes of the model and the involvement of those with specialized skill and knowledge. 
 
 Our audit procedures related to the finance charge revenue and allowance for credit losses included the following, among others: 
 
 • We tested the design and operating effectiveness of management’s review control over model performance variances between actual and expected future net cash flows. 
 
 • We tested the design and operating effectiveness of management’s review control over their statistical model used to determine expected future net cash flows which verifies the statistical model is operating as intended. 
 
 • For a sample of loans, we selected loan specific credit quality indicators used in the statistical model and agreed those credit quality indicators to source documents in order to recalculate the expected future net cash flows produced by the statistical model. 
 
 • We involved those with specialized skill and knowledge to assess the conceptual soundness of the statistical model’s design and management’s validation to accurately determine estimated future net cash flows. 
 
 /s/ GRANT THORNTON LLP 
 
 We have served as the Company’s auditor since 2005. 
 
 Southfield, Michigan 
 February 12, 2025 
 48 

 CONSOLIDATED BALANCE SHEETS 
 
 (Dollars in millions, except per share data) As of December 31, 
 2024 2023 
 ASSETS: 
 Cash and cash equivalents $ 343.7 $ 13.2 
 Restricted cash and cash equivalents 501.3 457.7 
 Restricted securities available for sale 106.4 93.2 
 
 Loans receivable 
 11,289.1 10,020.1 
 Allowance for credit losses ( 3,438.8 ) ( 3,064.8 ) 
 Loans receivable, net 7,850.3 6,955.3 
 
 Property and equipment, net 14.7 46.5 
 Income taxes receivable 4.2 4.3 
 Other assets 34.0 40.0 
 Total Assets $ 8,854.6 $ 7,610.2 
 
 LIABILITIES AND SHAREHOLDERS’ EQUITY: 
 Liabilities: 
 Accounts payable and accrued liabilities $ 315.8 $ 318.8 
 Revolving secured lines of credit 0.1 79.2 
 Secured financing 5,361.5 3,990.9 
 Senior notes 991.3 989.0 
 Mortgage note — 8.4 
 Deferred income taxes, net 319.1 389.2 
 Income taxes payable 117.2 81.0 
 Total Liabilities 7,105.0 5,856.5 
 
 Commitments and Contingencies - See Note 15 
 Shareholders’ Equity: 
 Preferred stock, $ .01 par value, 1,000,000 shares authorized, none issued 
 — — 
 Common stock, $ .01 par value, 80,000,000 shares aut ho rized, 12,048,151 and 
 12,522,397 shares issued and outstanding as of December 31, 2024 and 
 December 31, 2023, respectively 
 0.1 0.1 
 Paid-in capital 335.1 279.0 
 Retained earnings 1,414.7 1,475.6 
 Accumulated other comprehensive loss ( 0.3 ) ( 1.0 ) 
 Total Shareholders’ Equity 1,749.6 1,753.7 
 Total Liabilities and Shareholders’ Equity $ 8,854.6 $ 7,610.2 

 See accompanying notes to consolidated financial statements. 
 49 

 CONSOLIDATED STATEMENTS OF INCOME 
 
 (Dollars in millions, except per share data) For the Years Ended December 31, 
 2024 2023 2022 
 Revenue: 
 Finance charges $ 1,992.7 $ 1,755.4 $ 1,686.3 
 Premiums earned 96.1 79.6 62.7 
 Other income 73.6 66.9 83.4 
 Total revenue 2,162.4 1,901.9 1,832.4 
 Costs and expenses: 
 Salaries and wages 309.2 280.2 262.0 
 General and administrative 97.9 87.2 88.7 
 Sales and marketing 94.4 91.7 75.6 
 Total operating expenses 501.5 459.1 426.3 
 
 Provision for credit losses on forecast changes 493.8 413.7 137.7 
 Provision for credit losses on new Consumer Loan assignments 320.9 322.5 343.7 
 Total provision for credit losses 814.7 736.2 481.4 
 
 Interest 419.5 266.5 166.6 
 Provision for claims 73.5 70.7 46.4 
 Loss on extinguishment of debt — 1.8 — 
 Loss on sale of building 23.7 — — 
 Total costs and expenses 1,832.9 1,534.3 1,120.7 
 Income before provision for income taxes 329.5 367.6 711.7 
 Provision for income taxes 81.6 81.5 175.9 
 Net income $ 247.9 $ 286.1 $ 535.8 
 Net income per share: 
 Basic $ 20.12 $ 22.09 $ 39.50 
 Diluted $ 19.88 $ 21.99 $ 39.32 
 Weighted average shares outstanding: 
 Basic 12,323,261 12,953,424 13,563,885 
 Diluted 12,469,283 13,010,735 13,625,081 

 See accompanying notes to consolidated financial statements. 
 50 

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 
 (In millions) For the Years Ended December 31, 
 2024 2023 2022 
 Net income $ 247.9 $ 286.1 $ 535.8 
 Other comprehensive income (loss), net of tax: 
 Unrealized gain (loss) on securities, net of tax 0.7 1.9 ( 3.1 ) 
 Other comprehensive income (loss) 0.7 1.9 ( 3.1 ) 
 Comprehensive income $ 248.6 $ 288.0 $ 532.7 

 See accompanying notes to consolidated financial statements. 
 51 

 CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY 
 
 (Dollars in millions) Common Stock 
 Number of Shares Amount Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity 
 Balance, January 1, 2022 14,145,888 $ 0.1 $ 197.2 $ 1,626.7 $ 0.2 $ 1,824.2 
 Net income — — — 535.8 — 535.8 
 Other comprehensive loss — — — — ( 3.1 ) ( 3.1 ) 
 Stock-based compensation — — 36.5 — — 36.5 
 
 Repurchase of common stock ( 1,491,481 ) — ( 3.1 ) ( 781.4 ) — ( 784.5 ) 
 Restricted stock units settled in common stock 57,928 — — — — — 
 Stock options exercised 44,550 — 15.1 — — 15.1 
 Balance, December 31, 2022 12,756,885 0.1 245.7 1,381.1 ( 2.9 ) 1,624.0 
 Net income — — — 286.1 — 286.1 
 Other comprehensive gain — — — — 1.9 1.9 
 Stock-based compensation — — 39.1 — — 39.1 
 
 Repurchase of common stock ( 409,317 ) — ( 11.0 ) ( 191.6 ) — ( 202.6 ) 
 Restricted stock units settled in common stock 159,205 — — — — — 
 Stock options exercised 15,624 — 5.2 — — 5.2 
 Balance, December 31, 2023 12,522,397 0.1 279.0 1,475.6 ( 1.0 ) 1,753.7 
 Net income — — — 247.9 — 247.9 
 Other comprehensive gain — — — — 0.7 0.7 
 Stock-based compensation — — 45.0 — — 45.0 
 Repurchase of common stock ( 588,025 ) — ( 4.5 ) ( 308.8 ) — ( 313.3 ) 
 Restricted stock units settled in common stock 68,003 — — — — — 
 Stock options exercised 45,776 — 15.6 — — 15.6 
 Balance, December 31, 2024 12,048,151 $ 0.1 $ 335.1 $ 1,414.7 $ ( 0.3 ) $ 1,749.6 

 See accompanying notes to consolidated financial statements. 
 52 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
 (In millions) For the Years Ended December 31, 
 2024 2023 2022 
 Cash Flows From Operating Activities: 
 Net income $ 247.9 $ 286.1 $ 535.8 
 Adjustments to reconcile cash provided by operating activities: 
 Provision for credit losses 814.7 736.2 481.4 
 Depreciation 6.7 8.9 9.0 
 Amortization 21.1 17.7 16.6 
 Credit for deferred income taxes ( 70.4 ) ( 38.0 ) ( 7.7 ) 
 Stock-based compensation 45.0 39.1 36.5 
 Loss on extinguishment of debt — 1.8 — 
 Loss on sale of building 23.7 — — 
 Other 0.8 0.6 0.3 
 Change in operating assets and liabilities: 
 Increase in accounts payable and accrued liabilities 6.8 49.7 67.9 
 Decrease in income taxes receivable 0.1 4.4 100.5 
 Increase in income taxes payable 36.2 78.5 2.3 
 Decrease (increase) in other assets 5.3 18.8 ( 3.9 ) 
 Net cash provided by operating activities 1,137.9 1,203.8 1,238.7 
 Cash Flows From Investing Activities: 
 Purchases of restricted securities available for sale ( 59.0 ) ( 43.3 ) ( 50.1 ) 
 Proceeds from sale of restricted securities available for sale 36.9 15.8 11.1 
 Maturities of restricted securities available for sale 9.3 8.5 24.3 
 Principal collected on Loans receivable 3,208.9 3,036.8 3,413.3 
 Advances to Dealers ( 3,578.3 ) ( 2,933.7 ) ( 2,530.0 ) 
 Purchases of Consumer Loans ( 1,040.1 ) ( 1,214.1 ) ( 1,095.3 ) 
 Accelerated payments of Dealer Holdback ( 59.0 ) ( 46.9 ) ( 44.2 ) 
 Payments of Dealer Holdback ( 241.2 ) ( 235.9 ) ( 186.6 ) 
 Purchases of property and equipment ( 1.8 ) ( 4.0 ) ( 3.1 ) 
 Proceeds from sale of building 3.2 — — 
 Net cash used in investing activities ( 1,721.1 ) ( 1,416.8 ) ( 460.6 ) 
 Cash Flows From Financing Activities: 
 Borrowings under revolving secured lines of credit 6,125.9 7,431.9 6,622.6 
 Repayments under revolving secured lines of credit ( 6,205.0 ) ( 7,383.6 ) ( 6,594.3 ) 
 Proceeds from secured financing 3,619.4 2,762.0 1,541.9 
 Repayments of secured financing ( 2,246.6 ) ( 2,519.8 ) ( 1,599.2 ) 
 Proceeds from issuance of senior notes — 600.0 — 
 Repayment of senior notes — ( 400.0 ) — 
 Payments of debt issuance costs and debt extinguishment costs ( 21.7 ) ( 33.3 ) ( 12.5 ) 
 Repurchase of common stock ( 313.3 ) ( 202.6 ) ( 784.5 ) 
 Proceeds from stock options exercised 15.6 5.2 15.1 
 Other ( 17.0 ) 6.4 16.3 
 Net cash provided by (used in) financing activities 957.3 266.2 ( 794.6 ) 
 Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents 374.1 53.2 ( 16.5 ) 
 Cash and cash equivalents and restricted cash and cash equivalents, beginning of period 470.9 417.7 434.2 
 Cash and cash equivalents and restricted cash and cash equivalents, end of period $ 845.0 $ 470.9 $ 417.7 
 Supplemental Disclosure of Cash Flow Information: 
 Cash paid during the period for interest $ 393.4 $ 242.1 $ 147.3 
 Cash paid during the period for income taxes, net of refunds $ 103.7 $ 31.9 $ 72.7 

 See accompanying notes to consolidated financial statements. 
 53 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 1. DESCRIPTION OF BUSINESS 
 
 Principal Business. Credit Acceptance Corporation (referred to as the “Company”, “Credit Acceptance”, “we”, “our” or “us”) makes vehicle ownership possible by providing innovative financing solutions 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 desire to provide an opportunity to consumers to improve their lives as “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. 
 
 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 Years Ended December 31, 
 Consumer Loan Assignment Volume 2024 2023 2022 
 Percentage of total unit volume with either FICO ® scores below 650 or no FICO ® scores 
 80.6 % 80.9 % 84.8 % 

 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.” The following table shows the percentage of Consumer Loans assigned to us as Dealer Loans and Purchased Loans for each of the last three years: 
 
 Unit Volume Dollar Volume (1) 
 For the Years Ended December 31, Dealer Loans Purchased Loans Dealer Loans Purchased Loans 
 2022 73.5 % 26.5 % 69.8 % 30.2 % 
 2023 74.0 % 26.0 % 70.7 % 29.3 % 
 2024 78.7 % 21.3 % 77.5 % 22.5 % 

 (1) Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program. Payments of Dealer Holdback (as defined below) 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”). 
 54 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 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. Dealers make an election as to how many Consumer Loans (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 with 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 a pool of Consumer Loans 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 advance balance. 
 
 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. 
 
 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 the 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 are granted access to the Portfolio Program upon enrollment. Access to the Purchase Program is typically only granted to Dealers that meet one of the following: 
 
 • assigned at least 50 Consumer Loans under the Portfolio Program; 
 • franchise dealership; or 
 • independent dealership that meets certain criteria upon enrollment. 
 
 55 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
 Principles of Consolidation 
 
 The consolidated financial statements include our accounts and our wholly owned subsidiaries. All significant intercompany transactions have been eliminated. Our primary subsidiaries as of December 31, 2024 are: Buyer’s Vehicle Protection Plan, Inc. (“BVPP”), Vehicle Remarketing Services, Inc. (“VRS”), VSC Re Company (“VSC Re”), CAC Warehouse Funding LLC 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 2019-2, Credit Acceptance Funding LLC 2021-1, Credit Acceptance Funding LLC 2021-4, Credit Acceptance Funding LLC 2022-1, Credit Acceptance Funding LLC 2022-2, Credit Acceptance Funding LLC 2022-3, Credit Acceptance Funding LLC 2023-1, Credit Acceptance Funding LLC 2023-2, Credit Acceptance Funding LLC 2023-3, Credit Acceptance Funding LLC 2023-A, Credit Acceptance Funding LLC 2023-5, Credit Acceptance Funding LLC 2024-A, Credit Acceptance Funding LLC 2024-1, Credit Acceptance Funding LLC 2024-2, Credit Acceptance Funding LLC 2024-3, and Credit Acceptance Funding LLC 2024-B. 
 
 Business Segment Information 
 
 We currently operate in one reportable segment which represents our core business of offering innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history. For information regarding our one reportable segment and related entity wide disclosures, see Note 14 to the consolidated financial statements. 
 
 Use of Estimates 
 
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions 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. The accounts which are subject to significant estimation include the allowance for credit losses, finance charge revenue, premiums earned, contingencies, and uncertain tax positions. Actual results could materially differ from those estimates. 
 
 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 December 31, 2024 and 2023, we had $ 342.7 million and $ 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 consist of cash pledged as collateral for secured financings and cash held in a trust for future vehicle service contract claims. As of December 31, 2024 and 2023, we had $ 497.0 million and $ 453.7 million, respectively, in restricted cash and cash equivalents that were not insured by the FDIC. 
 
 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 December 31, 
 2024 2023 2022 
 Cash and cash equivalents $ 343.7 $ 13.2 $ 7.7 
 Restricted cash and cash equivalents 501.3 457.7 410.0 
 Total cash and cash equivalents and restricted cash and cash equivalents 
 $ 845.0 $ 470.9 $ 417.7 

 56 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 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. 
 
 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. Our 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 consists 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. 
 
 Recognition and Measurement Policy. 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 are no longer material to our consolidated financial statements. Consumer Loans assigned to us on or subsequent to January 1, 2020 are accounted for as originated financial assets (“Originated Method”). 
 
 57 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 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. 
 
 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 measuring credit losses. Amounts paid to Dealers for Consumer Loans assigned under the Purchase Program are recorded as Purchased Loans and, for purposes of recognizing revenue and measuring credit losses, are not aggregated. 
 
 The outstanding balance of each 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); 
 • finance charges; 
 • Dealer Holdback payments; 
 • accelerated Dealer Holdback payments; 
 • recoveries; 
 • transfers in; 
 • less: collections (net of certain collection costs); 
 • less: write-offs; and 
 • less: transfers out. 
 
 Under the 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 balance 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 required to reduce net carrying amount of Loans (Loans receivable less allowance for credit losses) to the present value of expected future net cash flows discounted at the effective interest rate. Expected future net cash flows for Dealer Loans are comprised of expected future collections on the assigned Consumer Loans, less any expected future Dealer Holdback payments. Expected future net cash flows for Purchased Loans are comprised of expected future collections on the assigned Consumer Loans. 
 
 58 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 Expected future collections are forecasted for each individual Consumer 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 payments are forecasted for each individual Dealer based on the expected future collections and current advance balance of each Dealer Loan. 
 
 We fully write off the outstanding balances of a Loan and the related allowance for credit losses once we are no longer forecasting any expected future net cash flows on the Loan. Under our partial write-off policy, we write off the amount of the outstanding balances of a Loan and the related allowance for credit losses, 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. The vast majority of the Consumer Loans assigned to us are made to individuals with impaired or limited credit 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 a 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 for 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 a result of Consumer Loans performing differently from 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. During the second quarter of 2024, we applied an adjustment to our methodology for forecasting the amount of future net cash flows from our Loan portfolio, which reduced the forecasted collection rates for Consumer Loans assigned in 2022 through 2024. During the second quarter of 2023, we adjusted our methodology for forecasting the amount and timing of future net cash flows from our Loan portfolio through the utilization of more recent Consumer Loan performance and Consumer Loan prepayment data . During the first quarter of 2022, we removed the COVID-19 forecast adjustment (as defined in Note 5) from our estimate of future net cash flows and enhanced our methodology for forecasting the amount and timing of future net cash flows from our Loan portfolio through the utilization of more recent data and new forecast variables. For additional information, see Note 5. For the three year period ended December 31, 2024, we did not make any other methodology changes for Loans that had a material impact on our financial statements. 
 
 Property and Equipment 
 
 Purchases of property and equipment are recorded at cost. Depreciation is provided on a straight-line basis over the estimated useful life of the asset. Estimated useful lives are generally as follows: buildings – 40 years, building improvements – 10 years, data processing equipment – 3 years, software – 5 years, and office furniture and equipment – 7 years. The cost of assets sold or retired and the related accumulated depreciation are removed from the balance sheet at the time of disposition and any resulting gain or loss is included in operations. Maintenance, repairs, and minor replacements are charged to operations as incurred; major replacements and improvements are capitalized. We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. 
 59 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 Costs incurred during the application development stage of software developed for internal use are capitalized and generally depreciated on a straight-line basis over five years . Costs incurred to maintain existing software are expensed as incurred. For additional information regarding our property and equipment, see Note 6 to the consolidated financial statements. 
 
 Deferred Debt Issuance Costs 
 
 Deferred debt issuance costs associated with secured financings and senior notes are included as a deduction from the carrying amount of the related debt liability, and deferred debt issuance costs associated with our revolving secured line of credit facility are included in other assets. Expenses associated with the issuance of debt instruments are capitalized and amortized as interest expense over the term of the debt instrument using the effective interest method for asset-backed secured financings (“Term ABS financings”) and senior notes and the straight-line method for lines of credit and revolving secured warehouse (“Warehouse”) facilities. For additional information regarding deferred debt issuance costs, see Note 9 to the consolidated 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. 
 
 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 the 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). The effective interest rate is based on contractual 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. 
 
 60 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 Reinsurance 
 
 Our wholly owned subsidiary VSC Re 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 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’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 premiums 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. 
 
 Stock-Based Compensation Plans 
 
 We have stock-based compensation plans for team members and non-employee directors, which are described more fully in Note 13 to the consolidated financial statements. We apply a fair-value-based measurement method in accounting for stock-based compensation plans and recognize stock-based compensation expense over the requisite service period of the grant as salaries and wages expense. 
 
 Employee Benefit Plan 
 
 We sponsor a 401(k) plan that covers substantially all of our team members. We offer matching contributions to the 401(k) plan based on each enrolled team member’s eligible annual gross pay (subject to statutory limitations). Our matching contribution rate is equal to 100 % of the first 4 % participants contribute and an additional 50 % of the next 2 % participants contribute, for a maximum matching contribution of 5 % of each participant’s eligible annual gross pay. For the years ended December 31, 2024, 2023 and 2022, we recognized compensation expense of $ 10.3 million, $ 9.4 million, and $ 8.5 million, respectively, for our matching contributions to the plan. 
 
 Income Taxes 
 
 Provisions for federal, state, and foreign income taxes are calculated on reported pre-tax earnings based on current tax law and also include, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provisions differ from the amounts currently receivable or payable because certain items of income and expense are recognized in different time periods for financial reporting purposes than for income tax purposes. 
 
 Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. 
 
 61 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 We follow a two-step approach for recognizing uncertain tax positions. First, we evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more-likely-than-not that the position will be sustained upon examination, including resolution of related appeals or litigation processes, if any. Second, for positions that we determine are more-likely-than-not to be sustained, we recognize the tax benefit as the largest benefit that has a greater than 50 % likelihood of being sustained. We establish a reserve for uncertain tax positions liability that is comprised of unrecognized tax benefits and related interest. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. We recognize interest and penalties related to uncertain tax positions in provision for income taxes. For additional information regarding our income taxes, see Note 10 to the consolidated financial statements. 
 
 Advertising Costs 
 
 Advertising costs are expensed as incurred. Advertising expenses were $ 1.4 million for the year ended December 31, 2024, $ 0.5 million for the year ended December 31, 2023, and $ 1.0 million for the year ended December 31, 2022. 
 
 New Accounting Update Adopted During the Current Year 
 
 Improvements to Reportable Segment Disclosures. In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, which enhances the required disclosures for operating segments in annual and interim consolidated financial statements. The adoption of ASU 2023-07 for the year ended December 31, 2024 expanded our business segment disclosures, but did not otherwise have a material impact on our consolidated financial statements. 
 
 New Accounting Updates Not Yet Adopted 
 
 Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. In October 2023, the FASB issued 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 Income Tax Disclosures. In December 2023, the FASB issued ASU 2023-09, which intends to improve the transparency of 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. 
 
 Disaggregation of Income Statement Expenses. In November 2024, the FASB issued ASU 2024-03, which requires disaggregated disclosure of income statement expenses. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. We are currently evaluating the impact the adoption of ASU 2024-03 will have on our consolidated financial statements and related disclosures. 
 
 Subsequent Events 
 
 We have evaluated events and transactions occurring subsequent to the consolidated balance sheet date of December 31, 2024 for items that could potentially be recognized or disclosed in these financial statements. We did not identify any items which would require disclosure in or adjustment to the consolidated financial statements. 
 
 62 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 3. 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. 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, corporate bonds, and municipal bonds is based on quoted market values in active markets. For asset-backed securities, 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 the discount rate used to calculate the value of our Loans under our non-GAAP floating yield methodology. 
 
 Revolving Secured Lines 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 certain Term ABS financings is determined using quoted market prices in 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 was determined by calculating the present value of the debt instrument based on current rates for debt with a similar risk profile and maturity. 
 
 A comparison of the carrying amount and estimated fair value of these financial instruments is as follows: 
 
 (In millions) As of December 31, 
 2024 2023 
 Carrying
Amount Estimated
Fair Value Carrying
Amount Estimated
Fair Value 
 Assets 
 Cash and cash equivalents $ 343.7 $ 343.7 $ 13.2 $ 13.2 
 Restricted cash and cash equivalents 501.3 501.3 457.7 457.7 
 Restricted securities available for sale 106.4 106.4 93.2 93.2 
 Loans receivable, net 7,850.3 8,922.7 6,955.3 7,759.1 
 Liabilities 
 Revolving secured lines of credit $ 0.1 $ 0.1 $ 79.2 $ 79.2 
 Secured financing 5,361.5 5,431.9 3,990.9 4,025.9 
 Senior notes 991.3 1,035.3 989.0 1,039.8 
 Mortgage note — — 8.4 8.4 

 63 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 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 1 Valuation is based upon quoted prices for identical instruments traded in active markets. 
 
 Level 2 Valuation 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 3 Valuation 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. 
 
 The following table provides the level of measurement used to determine the fair value for each of our financial instruments measured or disclosed at fair value: 
 
 (In millions) As of December 31, 2024 
 Level 1 Level 2 Level 3 Total Fair Value 
 Assets 
 Cash and cash equivalents (1) $ 343.7 $ — $ — $ 343.7 
 Restricted cash and cash equivalents (1) 501.3 — — 501.3 
 Restricted securities available for sale (2) 
 84.5 21.9 — 106.4 
 Loans receivable, net (1) — — 8,922.7 8,922.7 
 Liabilities 
 Revolving secured lines of credit (1) $ — $ 0.1 $ — $ 0.1 
 Secured financing (1) 3,831.7 1,600.2 — 5,431.9 
 Senior notes (1) 1,035.3 — — 1,035.3 
 
 (In millions) As of December 31, 2023 
 Level 1 Level 2 Level 3 Total 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. 
 64 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 4. RESTRICTED SECURITIES AVAILABLE FOR SALE 
 
 Restricted securities available for sale consist of the following: 
 
 (In millions) As of December 31, 2024 
 Amortized
Cost Gross Unrealized Gains Gross Unrealized Losses Estimated
Fair Value 
 Corporate bonds 
 $ 49.4 $ 0.2 $ ( 0.4 ) $ 49.2 
 U.S. Government and agency securities 35.6 0.1 ( 0.4 ) 35.3 
 Asset-backed securities 20.1 0.1 — 20.2 
 
 Mortgage-backed securities 1.7 — — 1.7 
 Total restricted securities available for sale 
 $ 106.8 $ 0.4 $ ( 0.8 ) $ 106.4 
 (In millions) As of December 31, 2023 
 Amortized
Cost Gross Unrealized Gains Gross Unrealized Losses Estimated
Fair Value 
 Corporate bonds 
 $ 40.5 $ 0.3 $ ( 0.9 ) $ 39.9 
 U.S. Government and agency securities 35.2 0.2 ( 0.9 ) 34.5 
 Asset-backed securities 18.0 0.1 ( 0.2 ) 17.9 
 Municipal securities 0.7 — — 0.7 
 Mortgage-backed securities 0.2 — — 0.2 
 Total restricted securities available for sale 
 $ 94.6 $ 0.6 $ ( 2.0 ) $ 93.2 

 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 December 31, 2024 
 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 
 
 Corporate bonds 
 $ 13.1 $ ( 0.2 ) $ 8.4 $ ( 0.2 ) $ 21.5 $ ( 0.4 ) 
 U.S. Government and agency securities 19.8 ( 0.2 ) 4.9 ( 0.2 ) 24.7 ( 0.4 ) 
 Asset-backed securities 2.4 — 3.6 — 6.0 — 
 Mortgage-backed securities 1.7 — — — 1.7 — 
 Total restricted securities available for sale 
 $ 37.0 $ ( 0.4 ) $ 16.9 $ ( 0.4 ) $ 53.9 $ ( 0.8 ) 

 (In millions) Securities Available for Sale with Gross Unrealized Losses as of December 31, 2023 
 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 
 Corporate bonds 
 $ 2.7 $ — $ 18.4 $ ( 0.9 ) $ 21.1 $ ( 0.9 ) 
 U.S. Government and agency securities 6.8 ( 0.1 ) 16.4 ( 0.8 ) 23.2 ( 0.9 ) 
 Asset-backed securities 1.6 — 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 ) 

 65 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 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 December 31, 
 2024 2023 
 Contractual Maturity Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value 
 Within one year $ 9.5 $ 9.4 $ 6.9 $ 6.8 
 Over one year to five years 84.7 84.3 80.5 79.1 
 Over five years to ten years 12.6 12.7 7.1 7.2 
 Over ten years — — 0.1 0.1 
 Total restricted securities available for sale 
 $ 106.8 $ 106.4 $ 94.6 $ 93.2 

 5. LOANS RECEIVABLE 
 
 Loans receivable and allowance for credit losses consist of the following: 
 
 (In millions) As of December 31, 2024 
 Dealer Loans Purchased Loans Total 
 Loans receivable $ 8,521.0 $ 2,768.1 $ 11,289.1 
 Allowance for credit losses ( 2,844.5 ) ( 594.3 ) ( 3,438.8 ) 
 Loans receivable, net $ 5,676.5 $ 2,173.8 $ 7,850.3 
 
 (In millions) As of December 31, 2023 
 Dealer Loans Purchased Loans Total 
 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 

 66 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 A summary of changes in Loans receivable and allowance for credit losses is as follows: 
 
 (In millions) 
 For the Year Ended December 31, 2024 
 Loans Receivable 
 Allowance for Credit Losses 
 Loans Receivable, Net 
 
 Dealer Loans 
 Purchased Loans 
 Total 
 Dealer Loans 
 Purchased Loans 
 Total 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 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 charges 
 1,931.4 905.9 2,837.3 ( 651.7 ) ( 192.9 ) ( 844.6 ) 1,279.7 713.0 1,992.7 
 Provision for credit losses 
 — — — ( 537.3 ) ( 277.4 ) ( 814.7 ) ( 537.3 ) ( 277.4 ) ( 814.7 ) 
 New Consumer Loan assignments (1) 
 3,578.3 1,040.1 4,618.4 — — — 3,578.3 1,040.1 4,618.4 
 Collections (2) 
 ( 3,575.5 ) ( 1,641.0 ) ( 5,216.5 ) — — — ( 3,575.5 ) ( 1,641.0 ) ( 5,216.5 ) 
 Accelerated Dealer Holdback payments 
 59.0 — 59.0 — — — 59.0 — 59.0 
 Dealer Holdback payments 
 241.2 — 241.2 — — — 241.2 — 241.2 
 Transfers (3) 
 ( 138.9 ) 138.9 — 45.3 ( 45.3 ) — ( 93.6 ) 93.6 — 
 Write-offs 
 ( 658.3 ) ( 634.7 ) ( 1,293.0 ) 658.3 634.7 1,293.0 — — — 
 Recoveries (4) 
 3.4 4.3 7.7 ( 3.4 ) ( 4.3 ) ( 7.7 ) — — — 
 Deferral of Loan origination costs 
 14.9 — 14.9 — — — 14.9 — 14.9 
 Balance, end of period 
 $ 8,521.0 $ 2,768.1 $ 11,289.1 $ ( 2,844.5 ) $ ( 594.3 ) $ ( 3,438.8 ) $ 5,676.5 $ 2,173.8 $ 7,850.3 

 (In millions) 
 For the Year Ended December 31, 2023 
 Loans Receivable 
 Allowance for Credit Losses 
 Loans Receivable, Net 
 
 Dealer Loans 
 Purchased Loans 
 Total 
 Dealer Loans 
 Purchased Loans 
 Total 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 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 charges 
 1,575.5 925.5 2,501.0 ( 528.8 ) ( 216.8 ) ( 745.6 ) 1,046.7 708.7 1,755.4 
 Provision for credit losses 
 — — — ( 427.7 ) ( 308.5 ) ( 736.2 ) ( 427.7 ) ( 308.5 ) ( 736.2 ) 
 New Consumer Loan assignments (1) 
 2,933.7 1,214.1 4,147.8 — — — 2,933.7 1,214.1 4,147.8 
 Collections (2) 
 ( 3,147.7 ) ( 1,656.8 ) ( 4,804.5 ) — — — ( 3,147.7 ) ( 1,656.8 ) ( 4,804.5 ) 
 Accelerated Dealer Holdback payments 
 46.9 — 46.9 — — — 46.9 — 46.9 
 Dealer Holdback payments 
 235.9 — 235.9 — — — 235.9 — 235.9 
 Transfers (3) 
 ( 100.9 ) 100.9 — 35.8 ( 35.8 ) — ( 65.1 ) 65.1 — 
 Write-offs 
 ( 566.6 ) ( 723.8 ) ( 1,290.4 ) 566.6 723.8 1,290.4 — — — 
 Recoveries (4) 
 1.6 4.0 5.6 ( 1.6 ) ( 4.0 ) ( 5.6 ) — — — 
 Deferral of Loan origination costs 
 12.3 — 12.3 — — — 12.3 — 12.3 
 Balance, end 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 

 67 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 (In millions) 
 For the Year Ended December 31, 2022 
 Loans Receivable 
 Allowance for Credit Losses 
 Loans Receivable, Net 
 
 Dealer Loans 
 Purchased Loans 
 Total 
 Dealer Loans 
 Purchased Loans 
 Total 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 Balance, beginning of period 
 $ 5,655.1 $ 3,694.7 $ 9,349.8 $ ( 1,767.8 ) $ ( 1,245.7 ) $ ( 3,013.5 ) $ 3,887.3 $ 2,449.0 $ 6,336.3 
 Finance charges 
 1,391.0 997.8 2,388.8 ( 442.4 ) ( 260.1 ) ( 702.5 ) 948.6 737.7 1,686.3 
 Provision for credit losses 
 — — — ( 240.4 ) ( 241.0 ) ( 481.4 ) ( 240.4 ) ( 241.0 ) ( 481.4 ) 
 New Consumer Loan assignments (1) 
 2,530.0 1,095.3 3,625.3 — — — 2,530.0 1,095.3 3,625.3 
 Collections (2) 
 ( 3,237.5 ) ( 1,871.9 ) ( 5,109.4 ) — — — ( 3,237.5 ) ( 1,871.9 ) ( 5,109.4 ) 
 Accelerated Dealer Holdback payments 
 44.2 — 44.2 — — — 44.2 — 44.2 
 Dealer Holdback payments 
 186.6 — 186.6 — — — 186.6 — 186.6 
 Transfers (3) 
 ( 72.1 ) 72.1 — 18.3 ( 18.3 ) — ( 53.8 ) 53.8 — 
 Write-offs 
 ( 433.4 ) ( 900.4 ) ( 1,333.8 ) 433.4 900.4 1,333.8 — — — 
 Recoveries (4) 
 1.1 3.1 4.2 ( 1.1 ) ( 3.1 ) ( 4.2 ) — — — 
 Deferral of Loan origination costs 
 9.8 — 9.8 — — — 9.8 — 9.8 
 Balance, end 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 

 (1) The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program. 
 (2) Represents repayments that we collected on Consumer Loans assigned under our programs. 
 (3) Under the 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 . 
 
 We recognize provision for credit losses on new Consumer Loan assignments for 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 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 Year Ended December 31, 2024 
 Provision for Credit Losses 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 New Consumer Loan assignments 
 $ 191.4 $ 129.5 $ 320.9 
 Forecast changes 
 345.9 147.9 493.8 
 Total 
 $ 537.3 $ 277.4 $ 814.7 

 (In millions) 
 For the Year Ended December 31, 2023 
 Provision for Credit Losses 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 New Consumer Loan assignments 
 $ 146.2 $ 176.3 $ 322.5 
 Forecast changes 
 281.5 132.2 413.7 
 Total 
 $ 427.7 $ 308.5 $ 736.2 

 (In millions) 
 For the Year Ended December 31, 2022 
 Provision for Credit Losses 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 New Consumer Loan assignments 
 $ 154.8 $ 188.9 $ 343.7 
 Forecast changes 
 85.6 52.1 137.7 
 Total 
 $ 240.4 $ 241.0 $ 481.4 

 68 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 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. Under CECL, we are required to recognize: 
 
 • a significant provision for credit losses expense at the time of assignment 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 yields. 
 
 Additional information related to new Consumer Loan assignments is as follows: 
 
 (In millions) 
 For the Year Ended December 31, 2024 
 New Consumer Loan Assignments 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 Contractual net cash flows at the time of assignment (1) 
 $ 5,613.6 $ 2,126.0 $ 7,739.6 
 Expected net cash flows at the time of assignment (2) 
 5,090.0 1,514.5 6,604.5 
 Loans receivable at the time of assignment (3) 
 3,578.3 1,040.1 4,618.4 
 
 Provision for credit losses expense at the time of assignment 
 $ ( 191.4 ) $ ( 129.5 ) $ ( 320.9 ) 
 Expected future finance charges at the time of assignment (4) 
 1,703.1 603.9 2,307.0 
 Expected net Loan income at the time of assignment (5) 
 $ 1,511.7 $ 474.4 $ 1,986.1 

 (In millions) 
 For the Year Ended December 31, 2023 
 New Consumer Loan Assignments 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 Contractual net cash flows at the time of assignment (1) 
 $ 4,579.3 $ 2,438.1 $ 7,017.4 
 Expected net cash flows at the time of assignment (2) 
 4,154.8 1,704.4 5,859.2 
 Loans receivable at the time of assignment (3) 
 2,933.7 1,214.1 4,147.8 
 
 Provision for credit losses expense at the time of assignment 
 $ ( 146.2 ) $ ( 176.3 ) $ ( 322.5 ) 
 Expected future finance charges at the time of assignment (4) 
 1,367.3 666.6 2,033.9 
 Expected net Loan income at the time of assignment (5) 
 $ 1,221.1 $ 490.3 $ 1,711.4 

 (In millions) 
 For the Year Ended December 31, 2022 
 New Consumer Loan Assignments 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 Contractual net cash flows at the time of assignment (1) 
 $ 3,874.4 $ 2,185.9 $ 6,060.3 
 Expected net cash flows at the time of assignment (2) 
 3,516.1 1,497.0 5,013.1 
 Loans receivable at the time of assignment (3) 
 2,530.0 1,095.3 3,625.3 
 
 Provision for credit losses expense at the time of assignment 
 $ ( 154.8 ) $ ( 188.9 ) $ ( 343.7 ) 
 Expected future finance charges at the time of assignment (4) 
 1,140.9 590.6 1,731.5 
 Expected net Loan income at the time of assignment (5) 
 $ 986.1 $ 401.7 $ 1,387.8 

 (1) The Dealer Loans amount represents repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under the 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 the Purchase Program. 
 (2) The Dealer Loans amount represents repayments that we expected to collect at the time of assignment on Consumer Loans assigned under the 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 the Purchase Program. 
 (3) The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program. The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under the 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. 
 69 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 A summary of changes in expected future net cash flows is as follows: 
 
 (In millions) 
 For the Year Ended December 31, 2024 
 Expected Future Net Cash Flows 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 Balance, beginning of period 
 $ 6,707.2 $ 3,472.0 $ 10,179.2 
 New Consumer Loan assignments (1) 
 5,090.0 1,514.5 6,604.5 
 Realized net cash flows (2) 
 ( 3,275.3 ) ( 1,641.0 ) ( 4,916.3 ) 
 Forecast changes 
 ( 204.6 ) ( 109.4 ) ( 314.0 ) 
 Transfers (3) 
 ( 141.0 ) 147.8 6.8 
 Balance, end of period 
 $ 8,176.3 $ 3,383.9 $ 11,560.2 

 (In millions) 
 For the Year Ended December 31, 2023 
 Expected Future Net Cash Flows 
 Dealer Loans 
 Purchased Loans 
 Total 
 
 Balance, beginning of period 
 $ 5,637.9 $ 3,395.5 $ 9,033.4 
 New Consumer Loan assignments (1) 
 4,154.8 1,704.4 5,859.2 
 Realized net cash flows (2) 
 ( 2,864.9 ) ( 1,656.8 ) ( 4,521.7 ) 
 Forecast changes 
 ( 125.3 ) ( 81.0 ) ( 206.3 ) 
 Transfers (3) 
 ( 95.3 ) 109.9 14.6 
 Balance, end of period 
 $ 6,707.2 $ 3,472.0 $ 10,179.2 

 (In millions) For the Year Ended December 31, 2022 
 Expected Future Net Cash Flows Dealer Loans Purchased Loans Total 
 Balance, beginning of period $ 5,249.7 $ 3,698.6 $ 8,948.3 
 New Consumer Loan assignments (1) 3,516.1 1,497.0 5,013.1 
 Realized net cash flows (2) ( 3,006.7 ) ( 1,871.9 ) ( 4,878.6 ) 
 Forecast changes ( 41.6 ) ( 18.1 ) ( 59.7 ) 
 Transfers (3) ( 79.6 ) 89.9 10.3 
 Balance, end of period $ 5,637.9 $ 3,395.5 $ 9,033.4 

 (1) The Dealer Loans amount represents repayments that we expected to collect at the time of assignment on Consumer Loans assigned under the 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 the Purchase Program. 
 (2) The Dealer Loans amount represents repayments that we collected on Consumer Loans assigned under the 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 the Purchase Program. 
 (3) Under the 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. 
 
 70 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 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 2 to the consolidated financial statements. The following table compares our aggregated forecast of Consumer Loan collection rates as of December 31, 2024, with the aggregated forecasts as of December 31, 2023, as of December 31, 2022, and at the time of assignment, segmented by year of assignment: 
 
 Total Loans as of December 31, 2024 
 Forecasted Collection Percentage as of (1) Current Forecast Variance from 
 Consumer Loan Assignment Year December 31, 2024 December 31, 2023 December 31, 2022 Initial
Forecast December 31, 2023 December 31, 2022 Initial
Forecast 
 2015 65.3 % 65.2 % 65.2 % 67.7 % 0.1 % 0.1 % - 2.4 % 
 2016 63.9 % 63.8 % 63.8 % 65.4 % 0.1 % 0.1 % - 1.5 % 
 2017 64.7 % 64.7 % 64.7 % 64.0 % 0.0 % 0.0 % 0.7 % 
 2018 65.5 % 65.5 % 65.2 % 63.6 % 0.0 % 0.3 % 1.9 % 
 2019 67.2 % 66.9 % 66.6 % 64.0 % 0.3 % 0.6 % 3.2 % 
 2020 67.7 % 67.6 % 67.8 % 63.4 % 0.1 % - 0.1 % 4.3 % 
 2021 63.8 % 64.5 % 66.2 % 66.3 % - 0.7 % - 2.4 % - 2.5 % 
 2022 60.2 % 62.7 % 66.3 % 67.5 % - 2.5 % - 6.1 % - 7.3 % 
 2023 64.3 % 67.4 % — 67.5 % - 3.1 % — - 3.2 % 
 2024 66.5 % — — 67.2 % — — - 0.7 % 

 Dealer Loans as of December 31, 2024 
 Forecasted Collection Percentage as of (1) (2) Current Forecast Variance from 
 Consumer Loan Assignment Year December 31, 2024 December 31, 2023 December 31, 2022 Initial
Forecast December 31, 2023 December 31, 2022 Initial
Forecast 
 2015 64.6 % 64.6 % 64.5 % 67.5 % 0.0 % 0.1 % - 2.9 % 
 2016 63.1 % 63.0 % 63.0 % 65.1 % 0.1 % 0.1 % - 2.0 % 
 2017 64.1 % 64.0 % 64.0 % 63.8 % 0.1 % 0.1 % 0.3 % 
 2018 64.9 % 64.9 % 64.6 % 63.6 % 0.0 % 0.3 % 1.3 % 
 2019 66.8 % 66.5 % 66.3 % 63.9 % 0.3 % 0.5 % 2.9 % 
 2020 67.5 % 67.4 % 67.7 % 63.3 % 0.1 % - 0.2 % 4.2 % 
 2021 63.5 % 64.2 % 66.0 % 66.3 % - 0.7 % - 2.5 % - 2.8 % 
 2022 59.5 % 62.0 % 65.8 % 67.3 % - 2.5 % - 6.3 % - 7.8 % 
 2023 63.1 % 66.4 % — 66.8 % - 3.3 % — - 3.7 % 
 2024 65.4 % — — 66.3 % — — - 0.9 % 

 71 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 Purchased Loans as of December 31, 2024 
 Forecasted Collection Percentage as of (1) (2) Current Forecast Variance from 
 Consumer Loan Assignment Year December 31, 2024 December 31, 2023 December 31, 2022 Initial
Forecast December 31, 2023 December 31, 2022 Initial
Forecast 
 2015 69.0 % 68.9 % 68.9 % 68.5 % 0.1 % 0.1 % 0.5 % 
 2016 66.1 % 66.1 % 66.0 % 66.5 % 0.0 % 0.1 % - 0.4 % 
 2017 66.3 % 66.3 % 66.3 % 64.6 % 0.0 % 0.0 % 1.7 % 
 2018 66.8 % 66.8 % 66.4 % 63.5 % 0.0 % 0.4 % 3.3 % 
 2019 67.9 % 67.5 % 67.2 % 64.2 % 0.4 % 0.7 % 3.7 % 
 2020 67.9 % 67.8 % 68.0 % 63.6 % 0.1 % - 0.1 % 4.3 % 
 2021 64.3 % 65.0 % 66.7 % 66.3 % - 0.7 % - 2.4 % - 2.0 % 
 2022 62.1 % 64.3 % 67.4 % 68.0 % - 2.2 % - 5.3 % - 5.9 % 
 2023 67.7 % 70.1 % — 69.4 % - 2.4 % — - 1.7 % 
 2024 70.7 % — — 70.7 % — — 0.0 % 

 (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 rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment. 
 
 We evaluate and adjust the expected collection rate for each Consumer Loan subsequent to assignment primarily through the monitoring of consumer payment behavior. The following table summarizes the past-due status of Consumer Loan assignments as of December 31, 2024 and December 31, 2023, segmented by year of assignment: 
 
 (In millions) 
 Total Loans as of December 31, 2024 (1) (2) 
 Pre-term Consumer Loans (3) 
 Post-term Consumer Loans (4) 
 Total 
 
 Consumer Loan Assignment Year 
 Current (5) 
 Past Due
11-90 Days 
 Past Due 
 Over 90 Days 
 
 2019 and prior $ 25.5 $ 18.8 $ 87.3 $ 239.7 $ 371.3 
 2020 113.3 64.2 179.1 25.7 382.3 
 2021 267.8 125.2 259.0 3.8 655.8 
 2022 795.2 269.8 371.7 1.0 1,437.7 
 2023 2,033.7 576.5 420.6 — 3,030.8 
 2024 4,412.3 819.1 179.8 — 5,411.2 
 $ 7,647.8 $ 1,873.6 $ 1,497.5 $ 270.2 $ 11,289.1 

 (In millions) 
 Dealer Loans as of December 31, 2024 (1) 
 Pre-term Consumer Loans (3) 
 Post-term Consumer Loans (4) 
 Total 
 
 Consumer Loan Assignment Year 
 Current (5) 
 Past Due
11-90 Days 
 Past Due
Over 90 Days 
 
 2019 and prior $ 11.3 $ 8.2 $ 39.7 $ 132.4 $ 191.6 
 2020 67.9 37.7 106.4 18.5 230.5 
 2021 180.2 82.6 171.0 3.0 436.8 
 2022 569.7 191.5 262.1 0.8 1,024.1 
 2023 1,487.0 429.4 312.8 — 2,229.2 
 2024 3,571.3 686.8 150.7 — 4,408.8 
 $ 5,887.4 $ 1,436.2 $ 1,042.7 $ 154.7 $ 8,521.0 

 72 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 (In millions) 
 Purchased Loans as of December 31, 2024 (2) 
 Pre-term Consumer Loans (3) 
 Post-term Consumer Loans (4) 
 Total 
 
 Consumer Loan Assignment Year 
 Current (5) 
 Past Due
11-90 Days 
 Past Due
Over 90 Days 
 
 2019 and prior $ 14.2 $ 10.6 $ 47.6 $ 107.3 $ 179.7 
 2020 45.4 26.5 72.7 7.2 151.8 
 2021 87.6 42.6 88.0 0.8 219.0 
 2022 225.5 78.3 109.6 0.2 413.6 
 2023 546.7 147.1 107.8 — 801.6 
 2024 841.0 132.3 29.1 — 1,002.4 
 $ 1,760.4 $ 437.4 $ 454.8 $ 115.5 $ 2,768.1 

 (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 Year 
 Current (5) 
 Past Due
11-90 Days 
 Past Due 
 Over 90 Days 
 
 2018 and prior $ 24.2 $ 16.8 $ 73.5 $ 204.9 $ 319.4 
 2019 150.7 83.8 237.6 39.5 511.6 
 2020 328.9 165.5 314.5 4.6 813.5 
 2021 596.6 262.1 368.7 0.7 1,228.1 
 2022 1,518.0 499.8 422.5 — 2,440.3 
 2023 3,888.7 666.5 152.0 — 4,707.2 
 $ 6,507.1 $ 1,694.5 $ 1,568.8 $ 249.7 $ 10,020.1 

 (In millions) 
 Dealer Loans as of December 31, 2023 (1) 
 Pre-term Consumer Loans (3) 
 Post-term Consumer Loans (4) 
 Total 
 
 Consumer Loan Assignment Year 
 Current (5) 
 Past Due
11-90 Days 
 Past Due
Over 90 Days 
 
 2018 and prior $ 11.7 $ 7.9 $ 35.0 $ 117.8 $ 172.4 
 2019 69.9 38.0 111.2 22.0 241.1 
 2020 201.7 98.0 190.4 3.5 493.6 
 2021 407.3 173.4 245.0 0.6 826.3 
 2022 1,109.4 360.4 303.5 — 1,773.3 
 2023 2,942.3 503.6 112.9 — 3,558.8 
 $ 4,742.3 $ 1,181.3 $ 998.0 $ 143.9 $ 7,065.5 

 (In millions) 
 Purchased Loans as of December 31, 2023 (2) 
 Pre-term Consumer Loans (3) 
 Post-term Consumer Loans (4) 
 Total 
 
 Consumer Loan Assignment Year 
 Current (5) 
 Past Due
11-90 Days 
 Past Due
Over 90 Days 
 
 2018 and prior $ 12.5 $ 8.9 $ 38.5 $ 87.1 $ 147.0 
 2019 80.8 45.8 126.4 17.5 270.5 
 2020 127.2 67.5 124.1 1.1 319.9 
 2021 189.3 88.7 123.7 0.1 401.8 
 2022 408.6 139.4 119.0 — 667.0 
 2023 946.4 162.9 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 recognizing revenue and measuring credit losses, 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 . 
 73 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 The following table summarizes the write-offs for Consumer Loan assignments for the years ended December 31, 2024 and 2023, segmented by year of assignment: 
 
 (In millions) For the Year Ended December 31, 2024 
 Write-offs by Consumer Loan Assignment Year Dealer Loans Purchased Loans Total 
 2019 and prior $ 177.6 $ 134.5 $ 312.1 
 2020 110.5 73.5 184.0 
 2021 131.3 92.3 223.6 
 2022 175.0 139.8 314.8 
 2023 47.6 143.9 191.5 
 2024 16.3 50.7 67.0 
 $ 658.3 $ 634.7 $ 1,293.0 

 (In millions) For the Year Ended December 31, 2023 
 Write-offs by Consumer Loan Assignment Year Dealer Loans Purchased Loans Total 
 2018 and prior $ 120.6 $ 104.8 $ 225.4 
 2019 101.3 176.6 277.9 
 2020 107.0 101.9 208.9 
 2021 107.2 119.7 226.9 
 2022 113.3 158.0 271.3 
 2023 17.2 62.8 80.0 
 $ 566.6 $ 723.8 $ 1,290.4 

 During the second quarter of 2024, we applied an adjustment to our methodology for forecasting the amount of future net cash flows from our Loan portfolio, which reduced the forecasted collection rates for Consumer Loans assigned in 2022 through 2024. Consumer Loans assigned in 2022 had continued to underperform our expectations for several quarters. Consumer Loans assigned in 2023 had also begun exhibiting similar trends of underperformance, although not as severe as Consumer Loans assigned in 2022. During the second quarter of 2024, we determined that we had sufficient Consumer Loan performance experience to estimate the magnitude by which we expected Consumer Loans assigned in 2022 through 2024 would likely underperform our historical collection rates on Consumer Loans with similar characteristics. Accordingly, we applied an adjustment to Consumer Loans assigned in 2022 through 2024 to reduce forecasted collection rates to what we believed the ultimate collection rates would be based on these trends. Changes in the amount and timing of forecasted net cash flows are recognized in the period of change as a provision for credit losses. The implementation of this forecast adjustment during the second quarter of 2024 reduced forecasted net cash flows by $ 147.2 million, or 1.4 %, and increased provision for credit losses by $ 127.5 million. 
 
 During the second quarter of 2023, we adjusted our methodology for forecasting the amount and timing of future net cash flows from our Loan portfolio through the utilization of more recent Consumer Loan performance and Consumer Loan prepayment data. We had experienced a decrease in Consumer Loan prepayments to below-average levels and, as a result, slowed our forecasted net cash flow timing. Historically, Consumer Loan prepayments have been lower in periods with less availability of consumer credit. Changes in the amount and timing of forecasted net cash flows are recognized in the period of change as a provision for credit losses. The implementation of the adjustment to our forecasting methodology during the second quarter of 2023 reduced forecasted net cash flows by $ 44.5 million, or 0.5 %, and increased provision for credit losses by $ 71.3 million. 
 
 74 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 The COVID-19 pandemic created conditions that increased the level of uncertainty associated with our estimate of the amount and timing of future net cash flows from our Loan portfolio. During the first quarter of 2020, we applied a subjective adjustment to our forecasting model to reflect our best estimate of the future impact of the COVID-19 pandemic on future net cash flows (“COVID forecast adjustment”), which reduced our estimate of future net cash flows by $162.2 million. We continued to apply the COVID forecast adjustment through the end of 2021, as it continued to represent our best estimate. During the first quarter of 2022, we determined that we had sufficient Consumer Loan performance experience since the lapse of federal stimulus payments and enhanced unemployment benefits to refine our estimate of future net cash flows. Accordingly, during the first quarter of 2022, we removed the COVID forecast adjustment and enhanced our methodology for forecasting the amount and timing of future net cash flows from our Loan portfolio through the utilization of more recent data and new forecast variables. 
 
 The removal of the COVID forecast adjustment and the implementation of the enhanced forecasting methodology during the first quarter of 2022 impacted forecasted net cash flows and provision for credit losses as follows: 
 
 (In millions) Increase / (Decrease) in 
 Forecasting Methodology Changes Forecasted Net Cash Flows Provision for Credit Losses 
 Removal of COVID forecast adjustment $ 149.5 $ ( 118.5 ) 
 Implementation of enhanced forecasting methodology ( 53.8 ) 47.9 
 Total $ 95.7 $ ( 70.6 ) 

 6. PROPERTY AND EQUIPMENT 
 
 Property and equipment consists of the following: 
 
 (In millions) As of December 31, 
 2024 2023 
 Land and land improvements $ 2.7 $ 2.9 
 Building and improvements 17.6 58.8 
 Data processing equipment and software 44.1 50.0 
 Office furniture and equipment 2.2 2.6 
 Total property and equipment 66.6 114.3 
 Less: Accumulated depreciation on property and equipment ( 51.9 ) ( 67.8 ) 
 Total property and equipment, net $ 14.7 $ 46.5 

 As the vast majority of our team members now work remotely, we had significant excess space in the two office buildings that we owned in Southfield, Michigan. During the second quarter of 2024, we sold the larger building for net sales proceeds of $ 3.2 million and recognized a loss on sale of the building of $ 23.7 million. The loss on sale of the building represented the amount by which the $ 26.9 million carrying value of the building and its improvements, the related land and land improvements, and office furniture and equipment exceeded the net sales proceeds of $ 3.2 million. 
 
 Depreciation expense on property and equipment was $ 6.7 million, $ 8.9 million, and $ 9.0 million for the years ended December 31, 2024, 2023, and 2022, respectively. 
 
 75 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 7. REINSURANCE 
 
 A summary of reinsurance activity is as follows: 
 
 (In millions) For the Years Ended December 31, 
 2024 2023 2022 
 Net assumed written premiums $ 104.4 $ 92.8 $ 72.5 
 Net premiums earned 96.1 79.6 62.7 
 Provision for claims 73.5 70.7 46.4 
 Amortization of capitalized acquisition costs 2.4 1.9 1.5 

 The trust assets and related reinsurance liabilities are as follows: 
 (In millions) As of December 31, 
 Balance Sheet location 2024 2023 
 Trust assets Restricted cash and cash equivalents $ 0.3 $ 1.4 
 Trust assets Restricted securities available for sale 106.4 93.2 
 Unearned premium Accounts payable and accrued liabilities 75.9 67.6 
 Claims reserve (1) Accounts payable and accrued liabilities 6.0 5.6 

 (1) The claims reserve represents our liability for incurred-but-not-reported claims and is estimated based on historical claims experience. 
 
 The following tables present information about incurred and paid claims development for the five-year period ended December 31, 2024: 
 
 (Dollars in millions) 
 
 Cumulative Incurred Claims As of December 31, 2024 
 Incident Year As of December 31, Claims Reserve Cumulative Number of Reported Claims 
 2020 2021 2022 2023 2024 
 2020 $ 37.7 $ 37.6 $ 37.7 $ 37.7 $ 37.7 $ — 28,214 
 2021 38.9 39.2 39.3 39.3 — 28,855 
 2022 46.0 47.7 47.8 — 30,492 
 2023 68.9 69.2 — 38,725 
 2024 73.1 6.0 38,798 
 Total $ 267.1 $ 6.0 165,084 

 (In millions) Cumulative Paid Claims 
 As of December 31, 
 Incident Year 2020 2021 2022 2023 2024 
 2020 $ 35.4 $ 37.6 $ 37.7 $ 37.7 $ 37.7 
 2021 36.5 39.2 39.3 39.3 
 2022 42.9 47.7 47.8 
 2023 63.3 69.2 
 2024 67.1 
 Total $ 261.1 

 Average Annual Percentage Payout of Incurred Claims by Age 
 Claim Age (Years) 1 2 3 4 5 
 Payout Percentage 91.7 % 8.1 % 0.2 % — % — % 

 76 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 8. OTHER INCOME 
 
 Other income consists of the following: 
 
 (In millions) For the Years Ended December 31, 
 2024 2023 2022 
 Ancillary product profit sharing $ 33.4 $ 34.1 $ 60.6 
 Interest 26.2 19.7 6.6 
 Remarketing fees 12.1 10.7 13.4 
 Other 1.9 2.4 2.8 
 Total $ 73.6 $ 66.9 $ 83.4 

 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. 
 
 The following table disaggregates our other income by major source of income and timing of the revenue recognition: 
 
 (In millions) For the Year Ended December 31, 2024 
 Ancillary product profit sharing Interest Remarketing fees Other Total Other Income 
 Source of income 
 Third-Party Providers $ 33.4 $ 26.2 $ — $ 0.5 $ 60.1 
 Dealers — — 12.1 1.4 13.5 
 Total $ 33.4 $ 26.2 $ 12.1 $ 1.9 $ 73.6 
 
 Timing of revenue recognition 
 Over time $ 33.4 $ 26.2 $ — $ 0.6 $ 60.2 
 At a point in time — — 12.1 1.3 13.4 
 Total $ 33.4 $ 26.2 $ 12.1 $ 1.9 $ 73.6 
 
 77 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 9. DEBT 
 
 Debt consists of the following: 
 
 (In millions) As of December 31, 2024 
 Principal Outstanding Unamortized Debt Issuance Costs Unamortized Discount Carrying 
Amount 
 Revolving secured lines of credit (1) $ 0.1 $ — $ — $ 0.1 
 Secured financing (2) 5,391.8 ( 29.0 ) ( 1.3 ) 5,361.5 
 Senior notes 1,000.0 ( 8.7 ) — 991.3 
 Mortgage note — — — — 
 Total debt $ 6,391.9 $ ( 37.7 ) $ ( 1.3 ) $ 6,352.9 
 
 (In millions) As of December 31, 2023 
 Principal Outstanding Unamortized Debt Issuance Costs Unamortized Discount Carrying 
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 notes 1,000.0 ( 11.0 ) — 989.0 
 Mortgage note 8.4 — — 8.4 
 Total debt $ 5,106.6 $ ( 36.6 ) $ ( 2.5 ) $ 5,067.5 

 (1) Excludes deferred debt issuance costs of $ 4.4 million and $ 4.2 million as of December 31, 2024 and December 31, 2023, respectively, which are included in other assets. 
 (2) Warehouse facilities and Term ABS financings. 
 
 78 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 General information for each of our financing transactions in place as of December 31, 2024 is as follows: 
 
 (Dollars in millions) 
 
 Financings Wholly Owned Subsidiary Maturity Date Financing Amount Interest Rate Basis as of December 31, 2024 
 Revolving Secured
Line of Credit Facility n/a 06/22/27 $ 390.0 At our option, either the Secured Overnight Financing Rate (SOFR) plus 197.5 basis points or the prime rate plus 87.5 basis points 
 
 RTP Facility n/a — (1) $ 20.0 SOFR plus 197.5 basis points 
 
 Warehouse Facility II (2) CAC Warehouse Funding LLC II 09/20/27 (3) $ 500.0 SOFR plus 185.0 basis points 
 
 Warehouse Facility IV (2) CAC Warehouse Funding LLC IV 12/29/26 (3) $ 300.0 SOFR plus 221.4 basis points 
 
 Warehouse Facility V (2) CAC Warehouse Funding LLC V 12/29/27 (4) $ 250.0 SOFR plus 185.0 basis points 
 
 Warehouse Facility VI (2) CAC Warehouse Funding LLC VI 09/30/26 (3) $ 75.0 SOFR plus 210.0 basis points 
 
 Warehouse Facility VIII (2) CAC Warehouse Funding LLC VIII 09/21/26 (3) $ 200.0 SOFR plus 225.0 basis points 
 
 Term ABS 2019-2 (2) Credit Acceptance Funding LLC 2019-2 09/15/26 (5) $ 500.0 Fixed rate 
 Term ABS 2021-1 (2) Credit Acceptance Funding LLC 2021-1 02/17/26 (5) $ 100.0 SOFR plus 220.0 basis points 
 
 Term ABS 2021-4 (2) Credit Acceptance Funding LLC 2021-4 10/16/23 (3) $ 250.1 Fixed rate 
 Term ABS 2022-1 (2) Credit Acceptance Funding LLC 2022-1 06/17/24 (3) $ 350.0 Fixed rate 
 Term ABS 2022-2 (2) Credit Acceptance Funding LLC 2022-2 06/15/27 (5) $ 300.0 SOFR plus 246.4 basis points 
 
 Term ABS 2022-3 (2) Credit Acceptance Funding LLC 2022-3 10/15/24 (3) $ 389.9 Fixed rate 
 Term ABS 2023-1 (2) Credit Acceptance Funding LLC 2023-1 03/17/25 (3) $ 400.0 Fixed rate 
 Term ABS 2023-2 (2) Credit Acceptance Funding LLC 2023-2 05/15/25 (3) $ 400.0 Fixed rate 
 Term ABS 2023-3 (2) Credit Acceptance Funding LLC 2023-3 08/15/25 (3) $ 400.0 Fixed rate 
 Term ABS 2023-A (2) Credit Acceptance Funding LLC 2023-A 12/15/25 (5) $ 200.0 Fixed rate 
 Term ABS 2023-5 (2) Credit Acceptance Funding LLC 2023-5 12/15/25 (3) $ 294.0 Fixed rate 
 Term ABS 2024-A (2) Credit Acceptance Funding LLC 2024-A 02/15/27 (5) $ 200.0 Fixed rate 
 Term ABS 2024-1 (2) Credit Acceptance Funding LLC 2024-1 03/16/26 (3) $ 500.0 Fixed rate 
 Term ABS 2024-2 (2) Credit Acceptance Funding LLC 2024-2 06/15/26 (3) $ 550.0 Fixed rate 
 Term ABS 2024-3 (2) Credit Acceptance Funding LLC 2024-3 09/15/26 (3) $ 600.0 Fixed rate 
 Term ABS 2024-B (2) Credit Acceptance Funding LLC 2024-B 12/15/27 (5) $ 300.0 Fixed rate 
 2026 Senior Notes n/a 03/15/26 $ 400.0 Fixed rate 
 2028 Senior Notes n/a 12/15/28 $ 600.0 Fixed rate 

 (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) Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on December 27, 2029 will be due on that date. 
 (5) 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. 
 79 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 Additional information related to the amounts outstanding on each facility is as follows: 
 
 (In millions) For the Years Ended December 31, 
 2024 2023 
 Revolving Secured Lines of Credit 
 Maximum outstanding principal balance $ 342.0 $ 355.5 
 Average outstanding principal balance 127.0 156.8 
 Warehouse Facility II 
 Maximum outstanding principal balance $ 251.0 $ 201.0 
 Average outstanding principal balance 94.4 74.3 
 Warehouse Facility IV 
 Maximum outstanding principal balance $ — $ 100.0 
 Average outstanding principal balance — 14.0 
 Warehouse Facility V 
 Maximum outstanding principal balance $ 100.0 $ 82.0 
 Average outstanding principal balance 5.7 5.2 
 Warehouse Facility VI 
 Maximum outstanding principal balance $ 75.0 $ — 
 Average outstanding principal balance 36.5 — 
 Warehouse Facility VIII 
 Maximum outstanding principal balance $ 100.0 $ 82.0 
 Average outstanding principal balance 19.4 5.2 

 80 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 (Dollars in millions) As of December 31, 
 2024 2023 
 Revolving Secured Lines of Credit 
 Principal balance outstanding $ 0.1 $ 79.2 
 Amount available for borrowing (1) 409.9 330.8 
 Interest rate 6.37 % 7.33 % 
 Warehouse Facility II 
 Principal balance outstanding $ — $ — 
 Amount available for borrowing (1) 500.0 400.0 
 Loans pledged as collateral — — 
 Restricted cash and cash equivalents pledged as collateral 2.5 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 collateral — 1.5 
 Interest rate — % — % 
 Warehouse Facility V 
 Principal balance outstanding $ — $ — 
 Amount available for borrowing (1) 250.0 200.0 
 Loans pledged as collateral — — 
 Restricted cash and cash equivalents pledged as collateral 1.0 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 collateral — — 
 Interest rate — % — % 
 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 collateral — 0.8 
 Interest rate — % — % 
 Term ABS 2019-2 
 Principal balance outstanding $ 500.0 $ 500.0 
 Loans pledged as collateral 529.0 597.3 
 Restricted cash and cash equivalents pledged as collateral 41.7 47.6 
 Interest rate 5.43 % 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 % 
 Term ABS 2021-1 
 Principal balance outstanding $ 100.0 $ 100.0 
 Loans pledged as collateral 112.0 112.8 
 Restricted cash and cash equivalents pledged as collateral 8.7 8.8 
 Interest rate 6.60 % 7.56 % 
 
 81 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 (Dollars in millions) As of December 31, 
 2024 2023 
 Term ABS 2021-2 
 Principal balance outstanding $ — $ 188.2 
 Loans pledged as collateral — 415.5 
 Restricted cash and cash equivalents pledged as collateral — 37.3 
 Interest rate — % 1.38 % 
 Term ABS 2021-3 
 Principal balance outstanding $ — $ 265.0 
 Loans pledged as collateral — 396.3 
 Restricted cash and cash equivalents pledged as collateral — 33.8 
 Interest rate — % 1.24 % 
 Term ABS 2021-4 
 Principal balance outstanding $ 63.6 $ 221.6 
 Loans pledged as collateral 167.0 255.2 
 Restricted cash and cash equivalents pledged as collateral 16.4 21.0 
 Interest rate 1.89 % 1.46 % 
 Term ABS 2022-1 
 Principal balance outstanding $ 236.6 $ 350.0 
 Loans pledged as collateral 310.0 378.2 
 Restricted cash and cash equivalents pledged as collateral 24.9 27.4 
 Interest rate 5.24 % 5.03 % 
 Term ABS 2022-2 
 Principal balance outstanding $ 300.0 $ 200.0 
 Loans pledged as collateral 406.0 212.1 
 Restricted cash and cash equivalents pledged as collateral 25.2 14.7 
 Interest rate 7.29 % 7.66 % 
 Term ABS 2022-3 
 Principal balance outstanding $ 347.6 $ 389.9 
 Loans pledged as collateral 395.2 418.9 
 Restricted cash and cash equivalents pledged as collateral 29.1 28.9 
 Interest rate 7.82 % 7.68 % 
 Term ABS 2023-1 
 Principal balance outstanding $ 400.0 $ 400.0 
 Loans pledged as collateral 453.0 611.6 
 Restricted cash and cash equivalents pledged as collateral 33.1 38.5 
 Interest rate 6.92 % 6.92 % 
 Term ABS 2023-2 
 Principal balance outstanding $ 400.0 $ 400.0 
 Loans pledged as collateral 533.3 701.7 
 Restricted cash and cash equivalents pledged as collateral 36.8 42.0 
 Interest rate 6.39 % 6.39 % 
 Term ABS 2023-3 
 Principal balance outstanding $ 400.0 $ 400.0 
 Loans pledged as collateral 524.9 643.8 
 Restricted cash and cash equivalents pledged as collateral 36.5 40.3 
 Interest rate 6.86 % 6.86 % 
 
 82 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 (Dollars in millions) As of December 31, 
 2024 2023 
 Term ABS 2023-A 
 Principal balance outstanding $ 200.0 $ 200.0 
 Loans pledged as collateral 252.0 273.4 
 Restricted cash and cash equivalents pledged as collateral 17.7 17.2 
 Interest rate 7.51 % 7.51 % 
 Term ABS 2023-5 
 Principal balance outstanding $ 294.0 $ 294.0 
 Loans pledged as collateral 398.7 433.9 
 Restricted cash and cash equivalents pledged as collateral 32.9 52.2 
 Interest rate 6.54 % 6.54 % 
 Term ABS 2024-A 
 Principal balance outstanding $ 200.0 $ — 
 Loans pledged as collateral 248.4 — 
 Restricted cash and cash equivalents pledged as collateral 18.1 — 
 Interest rate 7.45 % — % 
 Term ABS 2024-1 
 Principal balance outstanding $ 500.0 $ — 
 Loans pledged as collateral 553.3 — 
 Restricted cash and cash equivalents pledged as collateral 45.0 — 
 Interest rate 6.01 % — % 
 Term ABS 2024-2 
 Principal balance outstanding $ 550.0 $ — 
 Loans pledged as collateral 646.8 — 
 Restricted cash and cash equivalents pledged as collateral 42.0 — 
 Interest rate 6.21 % — % 
 Term ABS 2024-3 
 Principal balance outstanding $ 600.0 $ — 
 Loans pledged as collateral 700.9 — 
 Restricted cash and cash equivalents pledged as collateral 51.5 — 
 Interest rate 4.91 % — % 
 Term ABS 2024-B 
 Principal balance outstanding $ 300.0 $ — 
 Loans pledged as collateral 425.8 — 
 Restricted cash and cash equivalents pledged as collateral 37.9 — 
 Interest rate 6.13 % — % 
 2026 Senior Notes 
 Principal balance outstanding $ 400.0 $ 400.0 
 Interest rate 6.625 % 6.625 % 
 2028 Senior Notes 
 Principal balance outstanding $ 600.0 $ 600.0 
 Interest rate 9.250 % 9.250 % 
 Mortgage Note 
 Principal balance outstanding $ — $ 8.4 
 Interest rate — % 6.88 % 
 (1) Availability may be limited by the amount of assets pledged as collateral. 

 83 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 Revolving Secured Lines of Credit 
 
 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 and (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. 
 
 Borrowings under our 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 Dealer Loans Receivable constituting revolving credit facility collateral and 80% of Purchased Contract Balances constituting revolving credit facility collateral (each as defined in the agreement governing our revolving secured line of credit facility), less a hedging reserve (not exceeding $ 1.0 million), and less the amount of other outstanding debt secured by the collateral that secures our revolving secured line of credit facility. Borrowings under our revolving secured line of credit facility are secured by a lien on most of our 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. 
 
 Warehouse Facilities 
 
 We have five Warehouse facilities with total borrowing capacity of $ 1,325.0 million. Each of the facilities is with a different lender or group of lenders. Under each Warehouse facility, we can convey Loans to the applicable wholly owned subsidiary in return for cash and/or an increase in the value of our equity in such subsidiary. In turn, each such subsidiary pledges the Loans as collateral 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 outstanding balance of the conveyed Loans, as determined in accordance with the applicable agreement, plus certain restricted cash and cash equivalents pledged as collateral, 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 conveyed Loans) are not available to 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 conveyed 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 in its revolving period, the applicable subsidiary is entitled to the 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 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 conveyed Loans on an arms-length basis to a Funding LLC for cash and the sole membership interest in that Funding LLC. In turn, each Funding LLC, other than the Funding LLCs for the Term ABS 2019-2, 2021-1, 2022-2, 2023-A, and 2024-B financings, conveyed the Loans to the respective trusts that issued notes to qualified institutional investors. The Funding LLCs for the Term ABS 2019-2, 2021-1, 2022-2, 2023-A, and 2024-B financings pledged the Loans for the benefit of their respective lenders. The Term ABS 2021-4, 2023-1, 2023-2, 2023-3, 2023-A, 2023-5, 2024-A, 2024-1, 2024-2, and 2024-3 financings each consist of three classes of notes (or, in the case of the Term ABS 2023-A and Term ABS 2024-B, three classes of loans), while the Term ABS 2022-1 and Term ABS 2022-3 financings consist of four classes of notes. 
 
 84 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 Each Term ABS financing at the time of issuance has a specified revolving period during which we are likely to convey additional Loans to the applicable Funding LLC. Each Funding LLC (other than the Funding LLCs of the Term ABS 2019-2, 2021-1, 2022-2, 2023-A, and 2024-B financings) will then convey the Loans to its respective trust. At the end of the applicable revolving period, the debt outstanding under each financing will begin to amortize. 
 
 The Term ABS financings create indebtedness for which the applicable trust or Funding LLC is liable and which is secured by all the assets of the 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 conveyed Loans) are not available to any creditors other than the creditors of the applicable subsidiary. We receive a monthly servicing fee on each financing equal to 4 % of the collections received with respect to the conveyed Loans. The fee is paid out of the collections. Except for the servicing fee and Dealer Holdback payments due to Dealers, if a Term 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 Term ABS financing is in its revolving period, the applicable trust or Funding LLC is entitled to the 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 balance of eligible loans or, in the case of the Term ABS 2019-2 financing and 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 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 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. 
 
 Senior Notes 
 
 On December 19, 2023, we issued $600.0 million aggregate principal amount of 9.250% senior notes due 2028 (the “2028 senior notes”). The 2028 senior notes were issued pursuant to an indenture, dated as of 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 the trustee under the indenture. 
 
 The 2028 senior notes mature on December 15, 2028 and bear interest at a rate of 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, 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. 
 
 The 2028 senior notes and 2026 senior notes (the “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. 
 
 85 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 Mortgage Note 
 
 We had a mortgage note with a commercial bank that was 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 was paid off in full during the second quarter of 2024 in connection with the sale of the related building. 
 
 Principal Debt Maturities 
 
 The scheduled principal maturities of our debt as of December 31, 2024 are as follows: 
 
 (In millions) 
 Year Revolving Secured Lines of Credit Facility Warehouse Facilities Term ABS 
Financings (1) Senior Notes Total 
 2025 $ — $ — $ 1,249.6 $ — $ 1,249.6 
 2026 — — 2,146.9 400.0 2,546.9 
 2027 0.1 — 1,924.7 — 1,924.8 
 2028 — — 70.6 600.0 670.6 
 2029 — — — — — 
 Thereafter — — — — — 
 Total $ 0.1 $ — $ 5,391.8 $ 1,000.0 $ 6,391.9 

 (1) The principal maturities of the Term ABS financings are estimated based on forecasted collections. 
 
 Debt Covenants 
 
 As of December 31, 2024, we were in compliance with our covenants under our revolving secured line of credit facility, our Warehouse facilities, our Term ABS financings, the senior notes indentures, and the RTP Facility. 
 
 Our revolving secured line of credit facility and our Warehouse facilities include covenants 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, 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. Some of these covenants may indirectly limit the repurchase of common stock or payment of dividends on common stock. Our Warehouse facilities and Term ABS financings contain covenants that measure the performance of the conveyed assets. 
 
 86 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 10. INCOME TAXES 
 
 Income Tax Provision 
 
 The income tax provision consists of the following: 
 
 (In millions) For the Years Ended December 31, 
 2024 2023 2022 
 Income before provision for income taxes: $ 329.5 $ 367.6 $ 711.7 
 Current provision for income taxes: 
 Federal 116.1 97.1 152.7 
 State 32.9 20.2 28.5 
 149.0 117.3 181.2 
 Deferred provision for income taxes: 
 Federal ( 47.9 ) ( 26.4 ) ( 10.8 ) 
 State ( 22.5 ) ( 11.6 ) 3.1 
 ( 70.4 ) ( 38.0 ) ( 7.7 ) 
 Interest and penalties expense: 
 Interest 3.0 2.2 2.4 
 Penalties — — — 
 3.0 2.2 2.4 
 Provision for income taxes $ 81.6 $ 81.5 $ 175.9 

 Deferred Taxes 
 
 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities consist of the following: 
 
 (In millions) As of December 31, 
 2024 2023 
 Deferred tax assets: 
 Allowance for credit losses $ 831.7 $ 741.2 
 Stock-based compensation 14.3 14.6 
 Deferred state net operating loss 25.3 13.7 
 
 Other, net 15.2 14.1 
 Total deferred tax assets 886.5 783.6 
 Deferred tax liabilities: 
 Valuation of Loans receivable 1,195.8 1,158.9 
 Deferred Loan origination costs 1.8 1.6 
 Other, net 8.0 12.3 
 Total deferred tax liabilities 1,205.6 1,172.8 
 Net deferred tax liability $ 319.1 $ 389.2 

 The deferred state net operating loss tax asset arising from the operating loss carryforward for state income tax purposes is expected to expire at various times beginning in 2034, if not utilized. We do not anticipate expiration of the net operating loss carryforwards prior to their utilization. 
 
 87 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 Effective Income Tax Rate 
 
 A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows: 
 
 For the Years Ended December 31, 
 2024 2023 2022 
 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % 
 State and local income taxes 3.1 % 2.7 % 3.8 % 
 Non-deductible executive compensation expense 2.1 % 1.3 % 0.5 % 
 Excess tax benefits from stock-based compensation plans - 1.6 % - 3.0 % - 0.8 % 
 Other 0.2 % 0.2 % 0.2 % 
 Effective income tax rate 24.8 % 22.2 % 24.7 % 

 State and local income taxes 
 
 For the year ended December 31, 2024, the impact of state and local income taxes on our effective income tax rate increased from 2023, primarily due to an adjustment to an uncertain tax position estimate for state income taxes during the second quarter of 2024 and changes in state tax laws that were enacted during the second quarter of 2024. 
 
 For the year ended December 31, 2023, the impact of state and local income taxes on our effective income tax rate decreased from 2022 primarily due to the settlement of an uncertain tax position for state income taxes during the second quarter of 2023. 
 
 Non-deductible executive compensation expense 
 
 We recognize non-deductible executive compensation expense as an increase of provision for income taxes or a reduction of benefit for income taxes. For the year ended December 31, 2024, the impact of non-deductible executive compensation expense on our effective income tax rate increased from 2023, primarily due to an increase in non-deductible executive compensation expense. 
 
 Excess tax benefits from stock-based compensation 
 
 We recognize an excess tax benefit or tax deficiency when the 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 benefit or tax deficiency is recognized in provision for income taxes in the period in which the amount of the deduction is determined, which is when restricted stock vests, 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. The decrease in the impact of excess tax benefits on our effective income tax rate for the year ended December 31, 2024 as compared to 2023 was primarily due to a decrease in the number of restricted stock units that were settled in common stock during 2024 due to the timing of long-term stock award grants. 
 
 Unrecognized Tax Benefits 
 
 The following table is a summary of changes in gross unrecognized tax benefits: 
 
 (In millions) For the Years Ended December 31, 
 2024 2023 2022 
 Unrecognized tax benefits at January 1, $ 61.0 $ 57.1 $ 49.4 
 Additions for tax positions of the current year 20.3 16.2 14.5 
 Additions for tax positions of prior years 2.8 — — 
 Reductions for tax positions of prior years ( 0.2 ) ( 0.1 ) — 
 Settlements ( 3.2 ) ( 3.7 ) — 
 Reductions as a result of a lapse of the statute of limitations ( 7.7 ) ( 8.5 ) ( 6.8 ) 
 Unrecognized tax benefits at December 31, $ 73.0 $ 61.0 $ 57.1 

 88 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 The total amount of gross unrecognized tax benefits that, if recognized, would favorably affect our effective income tax rate in future periods was $ 73.0 million as of December 31, 2024. As of December 31, 2024, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits in the next twelve months. Accrued interest related to uncertain tax positions was $ 17.9 million and $ 15.1 million as of December 31, 2024 and 2023, respectively. 
 
 We are subject to income tax in federal, state, and local jurisdictions. We are generally no longer subject to tax examinations on federal returns filed for years prior to 2021 and state and local returns filed for years prior to 2018. 
 
 11. 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 Years Ended December 31, 
 2024 2023 2022 
 Weighted average shares outstanding: 
 Common shares 12,159,941 12,728,888 13,197,912 
 Vested restricted stock units 163,320 224,536 365,973 
 Basic number of weighted average shares outstanding 12,323,261 12,953,424 13,563,885 
 Dilutive effect of restricted stock units and stock options 146,022 57,311 61,196 
 Dilutive number of weighted average shares outstanding 12,469,283 13,010,735 13,625,081 

 The following outstanding stock awards were excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive: 
 
 For the Years Ended December 31, 
 2024 2023 2022 
 Stock options 69,083 228,998 189,465 
 Restricted stock units 240 3,185 2,827 
 Total 69,323 232,183 192,292 

 12. STOCK REPURCHASES 
 
 The following table summarizes our stock repurchases for the years ended December 31, 2024, 2023, and 2022: 
 
 (Dollars in millions) For the Years Ended December 31, 
 2024 2023 2022 
 Stock Repurchases Number of Shares Repurchased Cost (1) Number of Shares Repurchased Cost (1) Number of Shares Repurchased Cost 
 Open Market (2) 560,916 $ 300.4 352,062 $ 175.1 1,467,481 $ 773.0 
 Other (3) 27,109 12.9 57,255 27.5 24,000 11.5 
 Total 588,025 $ 313.3 409,317 $ 202.6 1,491,481 $ 784.5 

 (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 December 31, 2024, we had authorization to repurchase 1,245,091 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 settlement of restricted stock units in common stock. 
 
 89 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 13. STOCK-BASED COMPENSATION PLANS 
 
 Pursuant to our Amended and Restated Incentive Compensation Plan (the “Incentive Plan”), at any time prior to April 12, 2031, 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. On April 10, 2024, our board of directors approved an amendment to the Incentive Plan, subject to shareholder approval, increasing the number of shares authorized for issuance by 250,000 shares, to 3,250,000 shares. Shareholder approval was received at our annual meeting of shareholders on June 5, 2024. The shares available for future grants under the Incentive Plan totaled 310,552 as of December 31, 2024. 
 
 Restricted Stock Units 
 
 We grant performance-based and time-based restricted stock units to team members and directors in accordance with the Incentive Plan. The grant-date fair value per share is estimated to equal the market price of our common stock on the date of grant. Each restricted stock unit represents and has a value equal to one share of common stock. Based on the terms of individual restricted stock unit grant agreements, restricted stock units vest under one of the following methods: 
 
 • For executive officers and senior leaders, over a period of ten years , based on continuous employment. 
 • For certain team members, over a period of three or four years , based on continuous employment. 
 • For independent directors, over a period of three years , based on continuous service as a director. 
 
 A summary of the restricted stock unit (“RSU”) activity under the Incentive Plan for the year ended December 31, 2024, is presented below: 
 
 Restricted Stock Units Number of Restricted Stock Units Weighted Average Grant-Date Fair Value Per Share Aggregate Intrinsic 
Value (2) 
(in millions) Weighted Average Remaining Contractual Term (in years) 
 Outstanding as of December 31, 2023 203,444 $ 179.13 
 Granted 401,670 484.58 
 Converted ( 68,503 ) 181.30 
 Forfeited ( 3,164 ) 466.28 
 Outstanding as of December 31, 2024 (1) 533,447 $ 407.15 $ 250.4 4.1 (3) 
 Vested as of December 31, 2024 110,140 $ 113.85 $ 51.7 1.0 

 (1) No RSUs outstanding at December 31, 2024 were convertible to shares of common stock. 
 (2) The intrinsic value of RSUs is measured by applying the closing stock price as of December 31, 2024 to the applicable number of units. 
 (3) The calculation of weighted average remaining contractual term of RSUs outstanding excludes 98,497 RSUs that are to be settled in common stock on future dates that are currently not known, as they are contingent on the timing of the team members' retirement from the Company. 
 
 The grant-date weighted average fair value of RSUs granted in 2024, 2023, and 2022 was $ 484.58 , $ 454.04 , and $ 488.27 , respectively. The total intrinsic value of RSUs settled in common stock during 2024, 2023, and 2022 was $ 32.2 million, $ 84.8 million, and $ 27.5 million, respectively. 
 
 Stock option grants 
 
 We have granted time-based stock options to team members and directors in accordance with the Incentive Plan. Based on the terms of individual stock option grant agreements, the stock options: 
 
 • vest and become exercisable in three or four equal annual installments beginning on the first anniversary of the date on which the options were granted, based on continuous employment or service, and 
 • expire either six or ten years from the date of the grant. 
 
 90 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 A summary of the stock option activity under the Incentive Plan for the year ended December 31, 2024, is presented below: 
 
 Stock Options Number of Stock Options Weighted Average Exercise Price Per Share Aggregate Intrinsic 
Value (1) 
(in millions) Weighted Average Remaining Contractual Term (in years) 
 Outstanding as of December 31, 2023 
 655,200 $ 365.93 
 
 Exercised ( 45,776 ) 340.17 
 Forfeited ( 3,958 ) 366.45 
 Outstanding as of December 31, 2024 
 605,466 $ 367.88 $ 64.5 3.0 
 Exercisable as of December 31, 2024 
 537,342 $ 357.60 $ 61.6 2.8 
 Unvested as of December 31, 2024 
 68,124 $ 448.94 $ 2.9 4.6 

 (1) The intrinsic value of stock options is the amount by which the market price of the stock as of December 31, 2024 exceeded the exercise price of the options . 
 
 The total intrinsic value of stock options exercised during 2024 was $ 10.0 million. Net cash proceeds from the exercise of stock options in 2024 was $ 15.6 million. 
 
 Stock-based compensation expense 
 
 Stock-based compensation expense consists of the following: 
 
 (In millions) For the Years Ended December 31, 
 2024 2023 2022 
 Stock options $ 32.9 $ 33.5 $ 33.8 
 Restricted stock units 12.1 5.6 2.7 
 
 Total $ 45.0 $ 39.1 $ 36.5 

 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 2025 through 2034 compensation period and included a one-time equity award in December 2024 with a vesting period of ten years. We expect to recognize the remaining expense for stock-based awards outstanding as of December 31, 2024 over a weighted-average period of 4.3 years as follows: 
 
 (In millions) 
 For the Years Ended December 31, Restricted 
Stock Units Stock Options Total Projected Expense 
 2025 $ 33.2 $ 5.0 $ 38.2 
 2026 29.5 1.2 30.7 
 2027 23.6 — 23.6 
 2028 19.7 — 19.7 
 2029 17.2 — 17.2 
 Thereafter 71.7 — 71.7 
 Total $ 194.9 $ 6.2 $ 201.1 

 91 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 14. BUSINESS SEGMENT AND OTHER INFORMATION 
 
 Business Segment Overview 
 
 We identify operating segments as components of our business for which separate financial information is regularly evaluated by our Chief Executive Officer, who acts as the chief operating decision-maker (“CODM”), in assessing performance and making decisions regarding resource allocation. We periodically review and redefine our segment reporting as internal management reporting practices evolve and the components of our business change. Currently, the CODM reviews consolidated financial statements and metrics to assess performance and allocate resources. Thus, we have determined that we operate in one reportable operating segment that represents our core business of offering Dealers innovative financing solutions and related products and services that enable them to sell vehicles to consumers, regardless of their credit history. 
 
 The consolidated financial statements reflect the financial results of our one reportable operating segment. The accounting policies of this segment are the same as those described in the summary of significant accounting policies in Note 2. The CODM assesses performance for our one reportable operating segment and decides how to allocate resources based on net income, as reported on our consolidated statements of income, and total assets, as reported on our consolidated balance sheets. 
 
 Geographic Information 
 
 For the three years ended December 31, 2024, 2023, and 2022, all of our revenues were derived from the United States. As of December 31, 2024 and 2023, all of our long-lived assets were located in the United States. 
 
 Products and Services Information 
 
 Our primary product consists of innovative financing solutions that enable Dealers to sell vehicles to consumers, regardless of their credit history. We also provide Dealers the ability to offer ancillary products on vehicles financed by us. 
 
 Major Customer Information 
 
 We did not have any Dealers that provided 10% or more of our revenue during 2024, 2023, or 2022. Additionally, no single Dealer’s Loans receivable balance accounted for more than 10% of total Loans receivable as of December 31, 2024 or 2023. 
 
 15. 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 harm 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 the 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 other 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 or they may file individual arbitration demands for which arbitration providers may request separate filing fees. Current actions to which we are a party include the following matters: 
 
 On December 1, 2021, we received a subpoena from the Office of the Attorney General for the State of California seeking documents and information regarding GAP products, GAP product administration, and refunds. We have cooperated with this 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. 
 
 92 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED) 
 
 On May 7, 2019, we received 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 (“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 Enforcement (“Staff”) of the Bureau, stating that the Staff was considering whether to recommend that the Bureau take legal action against the Company for alleged violations of the Consumer Financial Protection Act of 2010 (the “CFPA”) in connection with the Company’s consumer loan origination practices. See the description below of the lawsuit commenced by the Bureau on January 4, 2023. 
 
 On January 4, 2023, the Office of the New York State Attorney General and the Bureau 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 service 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 motion 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 (“CFSA”). On July 1, 2024, the court lifted the stay in view of the decision in CFSA and requested revised briefing on the Company’s motion to dismiss that would address the intervening legal developments and sharpen the issues for resolution. As of October 29, 2024, the Company's motion to dismiss has been fully briefed. We are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this litigation. The Company intends to vigorously defend itself in this matter. 
 
 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 these investigations and cannot predict their 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 these investigations. 
 
 An adverse ultimate disposition in any action to which we are a party or otherwise subject could have a material adverse impact on our financial position, liquidity, and results of operations. 
 
 93 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONCLUDED) 

 Litigation Resolved during 2022 
 
 On October 2, 2020, a shareholder filed a putative class action complaint against the Company, its Chief Executive Officer (now former Chief Executive Officer), and its Chief Financial Officer (now Chief Executive Officer) in the United States District Court for the Eastern District of Michigan, Southern Division, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder, based on alleged false and/or misleading statements or omissions regarding the Company and its business, and seeking class certification, unspecified damages plus interest and attorney and expert witness fees, and other costs on behalf of a purported class consisting of all persons and entities (subject to specified exceptions) that purchased or otherwise acquired Credit Acceptance common stock from November 1, 2019 through August 28, 2020. In 2022, the Company reached an agreement to make an aggregate cash payment of $ 12.0 million, all of which was recognized during the second quarter of 2022, to settle claims brought on behalf of all persons and entities that purchased or otherwise acquired Credit Acceptance common stock from May 4, 2018 through August 28, 2020, and provided for a full release of all claims against all defendants, including the Company and its officers. On December 16, 2022, the court entered a final order and judgment consistent with the settlement agreement, including dismissal with prejudice of all claims asserted against the Company and its officers. 
 
 Lease Commitments 
 
 We lease office equipment and, until December 31, 2022, we also leased office space. We expect that, in the normal course of business, leases will be renewed or replaced by other leases. Total rental expense on all operating leases was $ 2.0 million for 2024, $ 1.2 million for 2023, and $ 1.3 million for 2022. Contingent rentals under the operating leases were insignificant. Our total minimum future lease commitments under operating leases as of December 31, 2024 are as follows: 
 
 (In millions) 
 Year Minimum Future
Lease Commitments 
 2025 $ 1.0 
 2026 0.6 
 2027 0.1 
 2028 — 
 2029 — 
 Total $ 1.7 

 94 

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
 
 Not applicable.
CREDIT ACCEPTANCE CORP 10-K

Item 8. Financial Statements and Supplementary Data
