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Item 1. Financial Statements

2025-07-31 compared with 2025-04-30 · 284 added, 94 removed, 1248 unchanged (23% of the section changed)

3 unchanged sentences

(Dollars in millions, except per share data) As of

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 70.0 $ 343.7

20 unchanged sentences

Preferred stock, $ .01 par value, 1,000,000 shares authorized, none issued

Common stock, $ .01 par value, 80,000,000 shares authorized, 11,747,851 and 12,048,151 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Common stock, $ .01 par value, 80,000,000 shares authorized, 11,237,396 and 12,048,151 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Paid-in capital 369.3 335.1

7 unchanged sentences

(Dollars in millions, except per share data) For the Three Months Ended

June 30, For the Six Months Ended

2025 2024 2025 2024

Finance charges $ 540.7 $ 497.7 $ 1,067.4 $ 966.9

13 unchanged sentences

Loss on extinguishment of debt — — 1.2 —

Loss on sale of building — 23.7 — 23.7

Total costs and expenses 466.0 593.5 895.4 1,015.1

Income before provision for income taxes 141.7 86.4

Provision for income taxes 35.4 22.1

Net income $ 106.3 $ 64.3

Net income per share:

Income (loss) before provision (benefit) for income taxes 117.8 ( 55.3 ) 259.5 31.1

Provision (benefit) for income taxes 30.4 ( 8.2 ) 65.8 13.9

Net income (loss) $ 87.4 $ ( 47.1 ) $ 193.7 $ 17.2

Net income (loss) per share:

Basic $ 7.55 $ ( 3.83 ) $ 16.37 $ 1.39

7 unchanged sentences

(In millions) For the Three Months Ended

Net income $ 106.3 $ 64.3

June 30, For the Six Months Ended

2025 2024 2025 2024

Net income (loss) $ 87.4 $ ( 47.1 ) $ 193.7 $ 17.2

Other comprehensive income (loss), net of tax:

1 unchanged sentence

Other comprehensive income (loss) 0.4 — 1.3 ( 0.2 )

Comprehensive income $ 107.2 $ 64.1

Comprehensive income (loss) $ 87.8 $ ( 47.1 ) $ 195.0 $ 17.0

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in millions) For the Three Months Ended March 31, 2025

(Dollars in millions) For the Three Months Ended June 30, 2025

Common Stock Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity

9 unchanged sentences

Balance, end of period 11,237,396 $ 0.1 $ 369.3 $ 1,184.3 $ 1.0 $ 1,554.7

(Dollars in millions) For the Three Months Ended March 31, 2024

(Dollars in millions) For the Three Months Ended June 30, 2024

Common Stock Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity

1 unchanged sentence

Balance, beginning of period 12,220,580 $ 0.1 $ 303.5 $ 1,349.8 $ ( 1.2 ) $ 1,652.2

Net income — — — 64.3 — 64.3

Other comprehensive loss — — — — ( 0.2 ) ( 0.2 )

Net loss — — — ( 47.1 ) — ( 47.1 )

Stock-based compensation — — 10.6 — — 10.6

2 unchanged sentences

Restricted stock units settled in common stock 1,225 — — — — —

Balance, end of period 12,111,128 $ 0.1 $ 313.8 $ 1,242.2 $ ( 1.2 ) $ 1,554.9

(Dollars in millions) For the Six Months Ended June 30, 2025

Common Stock Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity

Number of Shares Amount

Balance, beginning of period 12,048,151 $ 0.1 $ 335.1 $ 1,414.7 $ ( 0.3 ) $ 1,749.6

Net income — — — 193.7 — 193.7

Other comprehensive income — — — — 1.3 1.3

Stock-based compensation — — 25.6 — — 25.6

Repurchase of common stock ( 858,669 ) — ( 2.5 ) ( 424.1 ) — ( 426.6 )

Restricted stock units settled to common stock 15,339 — — — — —

Stock options exercised 32,575 — 11.1 — — 11.1

Balance, end of period 11,237,396 $ 0.1 $ 369.3 $ 1,184.3 $ 1.0 $ 1,554.7

(Dollars in millions) For the Six Months Ended June 30, 2024

Common Stock Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity

Number of Shares Amount

Balance, beginning of period 12,522,397 $ 0.1 $ 279.0 $ 1,475.6 $ ( 1.0 ) $ 1,753.7

Net income — — — 17.2 — 17.2

Other comprehensive income — — — — ( 0.2 ) ( 0.2 )

Stock-based compensation — — 21.5 — — 21.5

Repurchase of common stock ( 462,045 ) — ( 1.3 ) ( 250.6 ) — ( 251.9 )

Restricted stock units settled to common stock 8,350 — — — — —

Stock options exercised 42,426 — 14.6 — — 14.6

Balance, end of period 12,111,128 $ 0.1 $ 313.8 $ 1,242.2 $ ( 1.2 ) $ 1,554.9

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions) For the Three Months Ended March 31,

(In millions) For the Six Months Ended June 30,

Cash Flows From Operating Activities:

4 unchanged sentences

Amortization 11.6 9.8

Provision for deferred income taxes 1.6 31.9

Provision (credit) for deferred income taxes ( 13.3 ) 20.3

Stock-based compensation 25.6 21.5

Loss on extinguishment of debt 1.2 —

Loss on sale of building — 23.7

Other 0.1 0.4

2 unchanged sentences

Increase in income taxes receivable ( 5.2 ) ( 35.6 )

Increase (decrease) in income taxes payable 26.8 ( 11.5 )

Decrease in income taxes payable ( 103.4 ) ( 80.8 )

Decrease in other assets 5.5 12.5

10 unchanged sentences

Purchases of property and equipment ( 0.6 ) ( 0.7 )

Proceeds from sale of building — 3.2

Net cash used in investing activities ( 485.8 ) ( 1,109.9 )

10 unchanged sentences

Other 29.9 3.5

Net cash provided by financing activities 221.0 370.6

Net increase in cash and cash equivalents and restricted cash and cash equivalents 275.6 96.7

Net cash provided by (used in) financing activities ( 281.3 ) 642.6

Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents ( 281.2 ) 46.7

Cash and cash equivalents and restricted cash and cash equivalents beginning of period 845.0 470.9

15 unchanged sentences

Actual results could differ from those estimates.

We have evaluated events and transactions occurring subsequent to the consolidated balance sheet date of March 31, 2025 for items that could potentially be recognized or disclosed in these financial statements.

We did not identify any items that would require disclosure in or adjustment to the consolidated financial statements.

We have evaluated events and transactions occurring subsequent to the consolidated balance sheet date of June 30, 2025, for items that could potentially be recognized or disclosed in these financial statements.

For additional information regarding subsequent events, see Note 16 .

DESCRIPTION OF BUSINESS

10 unchanged sentences

The following table shows the percentage of Consumer Loans assigned to us with either FICO ® scores below 650 or no FICO ® scores:

For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

Consumer Loan Assignment Volume 2025 2024 2025 2024

6 unchanged sentences

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 five quarters:

Unit Volume Dollar Volume (1)

Three Months Ended Dealer Loans Purchased Loans Dealer Loans Purchased Loans

September 30, 2023 74.8 % 25.2 % 71.7 % 28.3 %

December 31, 2023 77.2 % 22.8 % 75.0 % 25.0 %

March 31, 2024 78.2 % 21.8 % 76.6 % 23.4 %

3 unchanged sentences

March 31, 2025 77.0 % 23.0 % 75.1 % 24.9 %

June 30, 2025 71.6 % 28.4 % 68.3 % 31.7 %

(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.

In 2025, we expanded Dealer access to the Purchase Program for Consumer Loans to consumers with higher credit ratings.

The increase in the percentage of Purchased Loans in 2025 Consumer Loan assignment volume was primarily related to Consumer Loans assigned under this expanded Dealer access.

Portfolio Program

17 unchanged sentences

Certain events may also result in Dealers forfeiting their rights to Dealer Holdback, including becoming inactive before assigning 100 Consumer Loans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

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.

22 unchanged sentences

Cash equivalents consist of readily marketable securities with original maturities at the date of acquisition of three months or less.

As of March 31, 2025 and December 31, 2024, we had $ 527.9 million and $ 342.7 million, respectively, in cash and cash equivalents that were not insured by the Federal Deposit Insurance Corporation (“FDIC”).

As of June 30, 2025 and December 31, 2024, we had $ 69.2 million and $ 342.7 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 March 31, 2025 and December 31, 2024, we had $ 585.9 million and $ 497.0 million, respectively, in restricted cash and cash equivalents that were not insured by the FDIC.

As of June 30, 2025 and December 31, 2024, we had $ 489.0 million and $ 497.0 million, respectively, in restricted cash and cash equivalents that were not insured by the FDIC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

1 unchanged sentence

(In millions) As of

March 31, 2025 December 31, 2024 March 31, 2024 December 31, 2023

June 30, 2025 December 31, 2024 June 30, 2024 December 31, 2023

Cash and cash equivalents $ 70.0 $ 343.7 $ 8.3 $ 13.2

26 unchanged sentences

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.

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 predominantly by consumers with impaired or limited credit histories.

Our determination is based on the following:

62 unchanged sentences

Methodolo gy Changes .

For the three months ended March 31, 2025 and 2024, we did not make any methodology changes for Loans that had a material impact on our financial statements.

During the second quarter of 2025, 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 2024.

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.

For additional information, see Note 6 .

For the three and six months ended June 30, 2025 and 2024, we did not make any other methodology changes for Loans that had a material impact on our financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

36 unchanged sentences

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.

Our wholly owned subsidiary VSC Re Company (“VSC Re”) is engaged in the business of reinsuring coverage under vehicle service contracts sold to consumers by Dealers on vehicles financed by us.

Our wholly owned subsidiary VSC Re Company (“VSC Re”) is engaged in the business of reinsuring coverage under vehicle service contracts sold to consumers by Dealers on vehicles indirectly financed by us.

VSC Re currently reinsures vehicle service contracts that are offered through one of our TPPs.

30 unchanged sentences

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.

We expect that the adoption of ASU 2023-09 will expand our income tax disclosures.

Disaggregation of Income Statement Expenses.

23 unchanged sentences

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

(In millions) As of March 31, 2025 As of December 31, 2024

(In millions) As of June 30, 2025 As of December 31, 2024

Amount Estimated Fair

18 unchanged sentences

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 March 31, 2025

(In millions) As of June 30, 2025

Level 1 Level 2 Level 3 Total Fair Value

20 unchanged sentences

Restricted securities available for sale consist of the following:

(In millions) As of March 31, 2025

(In millions) As of June 30, 2025

Amortized Cost Gross Unrealized

16 unchanged sentences

The fair value and gross unrealized losses for restricted securities available for sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:

(In millions) Securities Available for Sale with Gross Unrealized Losses as of March 31, 2025

(In millions) Securities Available for Sale with Gross Unrealized Losses as of June 30, 2025

Less than 12 Months 12 Months or More

7 unchanged sentences

0.2 — 3.2 — 3.4 —

Mortgage-backed securities 1.0 — — — 1.0 —

Total restricted securities available for sale

16 unchanged sentences

(In millions) As of

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Contractual Maturity Amortized Cost Estimated Fair

8 unchanged sentences

Loans receivable and allowance for credit losses consist of the following:

(In millions) As of March 31, 2025

(In millions) As of June 30, 2025

Dealer Loans Purchased Loans Total

9 unchanged sentences

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

For the Three Months Ended March 31, 2025

For the Three Months Ended June 30, 2025

(In millions)

28 unchanged sentences

$ 8,791.0 $ 2,772.0 $ 11,563.0 $ ( 3,005.9 ) $ ( 555.2 ) $ ( 3,561.1 ) $ 5,785.1 $ 2,216.8 $ 8,001.9

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

(In millions)

28 unchanged sentences

$ 7,980.6 $ 2,903.6 $ 10,884.2 $ ( 2,659.5 ) $ ( 677.0 ) $ ( 3,336.5 ) $ 5,321.1 $ 2,226.6 $ 7,547.7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

For the Six Months Ended June 30, 2025

(In millions) 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 $ 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

Finance charges 1,079.3 445.4 1,524.7 ( 370.7 ) ( 86.6 ) ( 457.3 ) 708.6 358.8 1,067.4

Provision for credit losses — — — ( 206.7 ) ( 127.8 ) ( 334.5 ) ( 206.7 ) ( 127.8 ) ( 334.5 )

New Consumer Loan assignments (1) 1,517.8 592.9 2,110.7 — — — 1,517.8 592.9 2,110.7

Collections (2) ( 1,995.1 ) ( 835.4 ) ( 2,830.5 ) — — — ( 1,995.1 ) ( 835.4 ) ( 2,830.5 )

Accelerated Dealer Holdback payments 27.8 — 27.8 — — — 27.8 — 27.8

Dealer Holdback payments 103.5 — 103.5 — — — 103.5 — 103.5

Transfers (3) ( 80.0 ) 80.0 — 25.5 ( 25.5 ) — ( 54.5 ) 54.5 —

Write-offs ( 391.2 ) ( 281.7 ) ( 672.9 ) 391.2 281.7 672.9 — — —

Recoveries (4) 0.7 2.7 3.4 ( 0.7 ) ( 2.7 ) ( 3.4 ) — — —

Deferral of Loan origination costs 7.2 — 7.2 — — — 7.2 — 7.2

Balance, end of period $ 8,791.0 $ 2,772.0 $ 11,563.0 $ ( 3,005.9 ) $ ( 555.2 ) $ ( 3,561.1 ) $ 5,785.1 $ 2,216.8 $ 8,001.9

For the Six Months Ended June 30, 2024

(In millions) 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 912.0 457.0 1,369.0 ( 305.2 ) ( 96.9 ) ( 402.1 ) 606.8 360.1 966.9

Provision for credit losses — — — ( 334.0 ) ( 172.6 ) ( 506.6 ) ( 334.0 ) ( 172.6 ) ( 506.6 )

New Consumer Loan assignments (1) 1,959.1 586.4 2,545.5 — — — 1,959.1 586.4 2,545.5

Collections (2) ( 1,743.9 ) ( 841.3 ) ( 2,585.2 ) — — — ( 1,743.9 ) ( 841.3 ) ( 2,585.2 )

Accelerated Dealer Holdback payments 33.4 — 33.4 — — — 33.4 — 33.4

Dealer Holdback payments 130.5 — 130.5 — — — 130.5 — 130.5

Transfers (3) ( 71.4 ) 71.4 — 22.9 ( 22.9 ) — ( 48.5 ) 48.5 —

Write-offs ( 314.0 ) ( 326.4 ) ( 640.4 ) 314.0 326.4 640.4 — — —

Recoveries (4) 1.5 1.9 3.4 ( 1.5 ) ( 1.9 ) ( 3.4 ) — — —

Deferral of Loan origination costs 7.9 — 7.9 — — — 7.9 — 7.9

Balance, end of period $ 7,980.6 $ 2,903.6 $ 10,884.2 $ ( 2,659.5 ) $ ( 677.0 ) $ ( 3,336.5 ) $ 5,321.1 $ 2,226.6 $ 7,547.7

(1) The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program.

10 unchanged sentences

(In millions)

For the Three Months Ended March 31, 2025

For the Three Months Ended June 30, 2025

Provision for Credit Losses

5 unchanged sentences

$ 102.0 $ 70.6 $ 172.6

(In millions) For the Three Months Ended March 31, 2024

(In millions) For the Three Months Ended June 30, 2024

Provision for Credit Losses Dealer Loans Purchased Loans Total

2 unchanged sentences

Total $ 212.3 $ 108.3 $ 320.6

(In millions)

For the Six Months Ended June 30, 2025

Provision for Credit Losses

Purchased Loans

New Consumer Loan assignments

$ 88.9 $ 68.0 $ 156.9

Forecast changes

117.8 59.8 177.6

$ 206.7 $ 127.8 $ 334.5

(In millions) For the Six Months Ended June 30, 2024

Provision for Credit Losses Dealer Loans Purchased Loans Total

New Consumer Loan assignments $ 106.0 $ 75.6 $ 181.6

Forecast changes 228.0 97.0 325.0

Total $ 334.0 $ 172.6 $ 506.6

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.

4 unchanged sentences

(In millions)

For the Three Months Ended March 31, 2025

For the Three Months Ended June 30, 2025

New Consumer Loan Assignments

12 unchanged sentences

$ 302.1 $ 131.9 $ 434.0

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

(In millions)

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

New Consumer Loan Assignments

12 unchanged sentences

$ 391.9 $ 126.0 $ 517.9

(In millions) For the Six Months Ended June 30, 2025

New Consumer Loan Assignments Dealer Loans Purchased Loans Total

Contractual net cash flows at the time of assignment (1) $ 2,426.9 $ 1,177.7 $ 3,604.6

Expected net cash flows at the time of assignment (2) 2,190.8 849.2 3,040.0

Loans receivable at the time of assignment (3) 1,517.8 592.9 2,110.7

Provision for credit losses expense at the time of assignment $ ( 88.9 ) $ ( 68.0 ) $ ( 156.9 )

Expected future finance charges at the time of assignment (4) 761.9 324.3 1,086.2

Expected net Loan income at the time of assignment (5) $ 673.0 $ 256.3 $ 929.3

(In millions) For the Six Months Ended June 30, 2024

New Consumer Loan Assignments Dealer Loans Purchased Loans Total

Contractual net cash flows at the time of assignment (1) $ 3,060.6 $ 1,201.9 $ 4,262.5

Expected net cash flows at the time of assignment (2) 2,779.4 853.0 3,632.4

Loans receivable at the time of assignment (3) 1,959.1 586.4 2,545.5

Provision for credit losses expense at the time of assignment $ ( 106.0 ) $ ( 75.6 ) $ ( 181.6 )

Expected future finance charges at the time of assignment (4) 926.3 342.2 1,268.5

Expected net Loan income at the time of assignment (5) $ 820.3 $ 266.6 $ 1,086.9

(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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

(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.

5 unchanged sentences

(5) Represents the amount that expected net cash flows at the time of assignment exceed Loans receivable at the time of assignment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

A summary of changes in expected future net cash flows is as follows:

(In millions)

For the Three Months Ended March 31, 2025

For the Three Months Ended June 30, 2025

Expected Future Net Cash Flows

13 unchanged sentences

(In millions)

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

Expected Future Net Cash Flows

12 unchanged sentences

$ 7,704.6 $ 3,469.8 $ 11,174.4

(In millions) For the Six Months Ended June 30, 2025

Expected Future Net Cash Flows Dealer Loans Purchased Loans Total

Balance, beginning of period $ 8,176.3 $ 3,383.9 $ 11,560.2

New Consumer Loan assignments (1) 2,190.8 849.2 3,040.0

Realized net cash flows (2) ( 1,863.8 ) ( 835.4 ) ( 2,699.2 )

Forecast changes ( 64.2 ) ( 12.5 ) ( 76.7 )

Transfers (3) ( 83.6 ) 87.0 3.4

Balance, end of period $ 8,355.5 $ 3,472.2 $ 11,827.7

(In millions) For the Six Months Ended June 30, 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) 2,779.4 853.0 3,632.4

Realized net cash flows (2) ( 1,580.0 ) ( 841.3 ) ( 2,421.3 )

Forecast changes ( 129.4 ) ( 90.7 ) ( 220.1 )

Transfers (3) ( 72.6 ) 76.8 4.2

Balance, end of period $ 7,704.6 $ 3,469.8 $ 11,174.4

(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.

4 unchanged sentences

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Credit Quality

1 unchanged sentence

For additional information regarding credit quality, see Note 3 .

The following table compares our aggregated forecast of Consumer Loan collection rates as of March 31, 2025 with the aggregated forecasts as of December 31, 2024 and at the time of assignment, segmented by year of assignment:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The following table compares our aggregated forecast of Consumer Loan collection rates as of June 30, 2025 with the aggregated forecasts as of March 31, 2025, December 31, 2024, and at the time of assignment, segmented by year of assignment:

Forecasted Collection Percentage as of (1) Current Forecast Variance from

Consumer Loan

Assignment Year March 31, 2025 December 31, 2024 Initial

Forecast December 31, 2024 Initial

Assignment Year June 30, 2025 March 31, 2025 December 31, 2024 Initial

Forecast March 31, 2025 December 31, 2024 Initial

2016 63.9 % 63.9 % 63.9 % 65.4 % 0.0 % 0.0 % - 1.5 %

10 unchanged sentences

Consumer Loan

Assignment Year March 31, 2025 December 31, 2024 Initial

Forecast December 31, 2024 Initial

Assignment Year June 30, 2025 March 31, 2025 December 31, 2024 Initial

Forecast March 31, 2025 December 31, 2024 Initial

2016 63.1 % 63.1 % 63.1 % 65.1 % 0.0 % 0.0 % - 2.0 %

8 unchanged sentences

2025 65.4 % 64.7 % — 65.4 % 0.7 % — 0.0 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Purchased Loans

1 unchanged sentence

Consumer Loan

Assignment Year March 31, 2025 December 31, 2024 Initial

Forecast December 31, 2024 Initial

Assignment Year June 30, 2025 March 31, 2025 December 31, 2024 Initial

Forecast March 31, 2025 December 31, 2024 Initial

2016 66.1 % 66.1 % 66.1 % 66.5 % 0.0 % 0.0 % - 0.4 %

12 unchanged sentences

(2) The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

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 March 31, 2025 and December 31, 2024, segmented by year of assignment:

The following table summarizes the past-due status of Consumer Loan assignments as of June 30, 2025 and December 31, 2024, segmented by year of assignment:

(In millions)

Total Loans as of March 31, 2025 (1) (2)

Total Loans as of June 30, 2025 (1) (2)

Pre-term Consumer Loans (3)

9 unchanged sentences

(In millions)

Dealer Loans as of March 31, 2025 (1)

Dealer Loans as of June 30, 2025 (1)

Pre-term Consumer Loans (3)

8 unchanged sentences

$ 6,194.6 $ 1,388.9 $ 1,048.8 $ 158.7 $ 8,791.0

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

(In millions)

Purchased Loans as of March 31, 2025 (2)

Purchased Loans as of June 30, 2025 (2)

Pre-term Consumer Loans (3)

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$ 7,647.8 $ 1,873.6 $ 1,497.5 $ 270.2 $ 11,289.1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

(In millions)

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$ 1,760.4 $ 437.4 $ 454.8 $ 115.5 $ 2,768.1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

(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.

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(5) We consider a Consumer Loan to be current for purposes of forecasting expected collection rates if contractual repayments are less than 11 days past due.

The following table summarizes the write-offs for Consumer Loan assignments for the three months ended March 31, 2025 and 2024, segmented by year of assignment:

(In millions) For the Three Months Ended March 31, 2025

The following table summarizes the write-offs for Consumer Loan assignments for th e three and six months ended June 30, 2025 and 2024, segmented by year of assignment:

(In millions) For the Three Months Ended June 30, 2025

Write-offs by Consumer Loan Assignment Year Dealer Loans Purchased Loans Total

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$ 207.6 $ 135.9 $ 343.5

(In millions) For the Three Months Ended March 31, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

(In millions) For the Three Months Ended June 30, 2024

Write-offs by Consumer Loan Assignment Year Dealer Loans Purchased Loans Total

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$ 171.2 $ 157.8 $ 329.0

(In millions) For the Six Months Ended June 30, 2025

Write-offs by Consumer Loan Assignment Year Dealer Loans Purchased Loans Total

2020 and prior $ 143.1 $ 56.9 $ 200.0

2021 72.4 31.7 104.1

2022 110.8 53.3 164.1

2023 35.4 70.6 106.0

2024 24.9 58.4 83.3

2025 4.6 10.8 15.4

$ 391.2 $ 281.7 $ 672.9

(In millions) For the Six Months Ended June 30, 2024

Write-offs by Consumer Loan Assignment Year Dealer Loans Purchased Loans Total

2019 and prior $ 91.6 $ 77.3 $ 168.9

2020 54.1 41 95.1

2021 63.9 50.8 114.7

2022 79.1 76.2 155.3

2023 22.2 73.5 95.7

2024 3.1 7.6 10.7

$ 314.0 $ 326.4 $ 640.4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Consumer Loans assigned in 2024 prior to the implementation of our scorecard adjustment during the third quarter of 2024 had underperformed relative to the forecast adjustment we implemented during the second quarter of 2024.

Accordingly, in the second quarter of 2025, we applied an adjustment to that segment of the Consumer Loans assigned in 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 2025 reduced forecasted net cash flows by $ 18.6 million, or 0.2 %, and increased provision for credit losses by $ 16.5 million.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

A summary of reinsurance activity is as follows:

(In millions) For the Three Months Ended

June 30, For the Six Months Ended

2025 2024 2025 2024

Net assumed written premiums $ 23.7 $ 27.3 $ 49.3 $ 58.5

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(In millions) As of

Balance Sheet Location March 31, 2025 December 31, 2024

Balance Sheet Location June 30, 2025 December 31, 2024

Trust assets Restricted cash and cash equivalents $ 0.8 $ 0.3

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Other income consists of the following:

(In millions) For the Three Months Ended March 31,

(In millions) For the Three Months Ended June 30, For the Six Months Ended June 30,

2025 2024 2025 2024

Ancillary product profit sharing $ 7.5 $ 6.4 $ 16.2 $ 13.7

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The following table disaggregates our other income by major source of income and timing of the revenue recognition:

(In millions) For the Three Months Ended March 31, 2025

(In millions) For the Three Months Ended June 30, 2025

Ancillary Product Profit Sharing Interest Remarketing Fees Other Total Other Income

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Total $ 7.5 $ 7.8 $ 3.3 $ 0.4 $ 19.0

(In millions) For the Six Months Ended June 30, 2025

Ancillary Product Profit Sharing Interest Remarketing Fees Other Total Other Income

Source of Income

Third-Party Providers $ 16.2 $ 16.2 $ — $ 0.1 $ 32.5

Dealers — — 6.7 0.7 7.4

Total $ 16.2 $ 16.2 $ 6.7 $ 0.8 $ 39.9

Timing of Revenue Recognition

Over time $ 16.2 $ 16.2 $ — $ 0.2 $ 32.6

At a point in time — — 6.7 0.6 7.3

Total $ 16.2 $ 16.2 $ 6.7 $ 0.8 $ 39.9

Debt consists of the following:

(In millions) As of March 31, 2025

(In millions) As of June 30, 2025

Principal Outstanding Unamortized Debt Issuance Costs Unamortized Discount Carrying

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Total debt $ 6,391.9 $ ( 37.7 ) $ ( 1.3 ) $ 6,352.9

(1) Excludes deferred debt issuance costs of $ 4.0 million and $ 4.4 million as of March 31, 2025 and December 31, 2024, respectively, which are included in other assets.

(1) Excludes deferred debt issuance costs of $ 5.4 million and $ 4.4 million as of June 30, 2025 and December 31, 2024, respectively, which are included in other assets.

(2) Warehouse facilities and Term ABS financings.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

General information for each of our financing transactions in place as of March 31, 2025 is as follows:

General information for each of our financing transactions in place as of June 30, 2025 is as follows:

(Dollars in millions)

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Amount Interest Rate Basis as of

March 31, 2025

June 30, 2025

Revolving Secured Line of Credit Facility n/a 06/22/2028 $ 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

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Term ABS 2022-1 (2) Credit Acceptance Funding LLC 2022-1 06/17/2024 (3) 350.0 Fixed rate

Term ABS 2022-2 (2) Credit Acceptance Funding LLC 2022-2 06/15/2027 (5) 300.0 SOFR plus 246.4 basis points

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(2) Financing made available only to a specified subsidiary of the Company.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

(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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

(4) Represents the revolving maturity date.

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(In millions) For the Three Months Ended

June 30, For the Six Months Ended

2025 2024 2025 2024

Revolving Secured Lines of Credit

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(Dollars in millions) As of

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Revolving Secured Lines of Credit

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(Dollars in millions) As of

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Term ABS 2021-4

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(Dollars in millions) As of

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Term ABS 2024-A

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Debt Covenants

As of March 31, 2025, 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.

As of June 30, 2025, 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.

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Our Warehouse facilities and Term ABS financings contain covenants that measure the performance of the conveyed assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

A reconciliation of the U.S.

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For the Three Months Ended

June 30, For the Six Months Ended

2025 2024 2025 2024

federal statutory income tax rate 21.0 % 21.0 % 21.0 % 21.0 %

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State and local income taxes

For the three months ended March 31, 2025, the impact of state and local income taxes on our effective income tax rate decreased from the same period in 2024, primarily due to having a lower proportion of our consolidated net income reserved for uncertain tax positions.

For the three months ended June 30, 2025, the impact of state and local income taxes on our effective income tax rate changed from the same period in 2024 primarily due to changes in state tax laws enacted during the second quarter of 2024 that were effective retroactively to the beginning of 2024.

Those changes increased our state income taxes and reduced, rather than increased, our effective income tax rate for the second quarter of 2024, as we had a pre-tax loss that quarter compared to pre-tax income for the second quarter of 2025.

For the six months ended June 30, 2025, the impact of state and local income taxes on our effective income tax rate decreased from the same period in 2024 primarily due to:

• The increased impact of an adjustment to an uncertain tax position for state income taxes in the second quarter of 2024 primarily due to lower pre-tax income for the six months ended June 30, 2024.

• Changes in state tax laws enacted during the second quarter of 2024 that were effective retroactively to the beginning of 2024.

Non-deductible executive compensation expense

We recognize non-deductible executive compensation expense as an increase in provision for income taxes or a reduction in benefit for income taxes.

For the second quarter of 2024, the impact of non-deductible executive compensation expense reduced, rather than increased, our effective income tax rate, as we had a pre-tax loss in the period, compared to pre-tax income in the second quarter of 2025.

For the six months ended June 30, 2025, the impact of non-deductible executive compensation expense on our effective income tax rate decreased from the same period in 2024 primarily due to an increase in pre-tax income.

Tax deficiency or excess tax benefit from stock-based compensation

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Tax deficiencies increase our effective income tax rate, while excess tax benefits reduce our effective income tax rate.

The change in the impact on our effective income tax rate for the three months ended March 31, 2025 was primarily due to the recognition of a tax deficiency in the current quarter compared to an excess tax benefit recognized during the first quarter of 2024.

We recognized a tax deficiency in 2025 and an excess tax benefit in 2024.

For the six months ended June 30, 2025, the impact on our effective income tax rate decreased from the same period in 2024 primarily due to an increase in pre-tax income.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

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For the Three Months Ended

June 30, For the Six Months Ended

2025 2024 2025 2024

Weighted average shares outstanding:

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For the Three Months Ended

June 30, For the Six Months Ended

2025 2024 2025 2024

Stock options 47,000 195,324 47,000 67,750

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STOCK REPURCHASES

The following table summarizes our stock repurchases for the three months ended March 31, 2025 and 2024:

(Dollars in millions) For the Three Months Ended March 31,

The following table summarizes our stock repurchases for the three and six months ended June 30, 2025 and 2024:

(Dollars in millions) For the Three Months Ended June 30,

Stock Repurchases Number of Shares Repurchased Cost (1) Number of Shares Repurchased Cost (1)

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Total 529,605 $ 262.2 110,677 $ 60.8

(Dollars in millions) For the Six Months Ended June 30,

Stock Repurchases Number of Shares Repurchased Cost (1) Number of Shares Repurchased Cost (1)

Open Market (2) 853,960 $ 424.2 459,437 $ 250.5

Other (3) 4,709 2.4 2,608 1.4

Total 858,669 $ 426.6 462,045 $ 251.9

(1) Total cost of repurchases includes excise tax.

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On August 21, 2023, the board of directors authorized the repurchase of up to two million shares of our common stock in addition to the board’s prior authorizations.

As of March 31, 2025, we had authorization to repurchase 919,593 shares of our common stock.

As of June 30, 2025, we had authorization to repurchase 391,131 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.

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Forfeited ( 530 ) 530.46

Outstanding as of March 31, 2025

Outstanding as of June 30, 2025

613,303 $ 414.18

1 unchanged sentence

(In millions) For the Three Months Ended

June 30, For the Six Months Ended

2025 2024 2025 2024

Restricted stock units $ 11.3 $ 2.4 $ 21.9 $ 5.1

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Geographic Information

For the three months ended March 31, 2025 and 2024, all of our revenues were derived from the United States.

As of March 31, 2025 and 2024, all of our long-lived assets were located in the United States.

For the three and six months ended June 30, 2025 and 2024, all of our revenues were derived from the United States.

As of June 30, 2025 and 2024, 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.

We also provide Dealers the ability to offer ancillary products on vehicles indirectly financed by us.

Major Customer Information

We did not have any Dealers that provided 10% or more of our revenue during the three months ended March 31, 2025 and 2024.

Additionally, no single Dealer’s Loans receivable balance accounted for more than 10% of total Loans receivable as of March 31, 2025 and 2024.

We did not have any Dealers that provided 10% or more of our revenue during the three and six months ended June 30, 2025 and 2024.

Additionally, no single Dealer’s Loans receivable balance accounted for more than 10% of total Loans receivable as of June 30, 2025 and 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

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The following matters include current actions to which we are a party and updates to matters that were disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

In many proceedings, including the specific actions described below, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the size or range of the possible loss, and accruals for legal matters are not recorded until a loss for a particular matter is considered probable and reasonably estimable.

Given the nature of legal matters and the complexities involved, it is often difficult to predict and determine a meaningful estimate of loss or range of loss until we know, among other factors, the particular claims involved, the likelihood of success of our defenses to those claims, the damages or other relief sought, how discovery or other procedural considerations will affect the outcome, the settlement posture of other parties, and other factors that may have a material effect on the outcome.

For these matters, unless otherwise specified, we do not believe it is possible to provide a meaningful estimate of loss at this time.

Moreover, it is not uncommon for legal matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated.

The total recorded accrual balance as of June 30, 2025 for these matters was $ 31.8 million.

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.

On April 7, 2025, a putative class action was filed against the Company in the United States District Court for the Eastern District of Michigan alleging that the Company violated the Telephone Consumer Protection Act (“TCPA”) by allegedly calling the cellular phones of members of the putative class without prior express consent and with the use of an artificial or prerecorded voice.

The plaintiff seeks to represent a nationwide class and requests damages, injunctive relief, and attorneys’ fees.

The Company is unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this litigation.

On May 14, 2025, the Company filed a motion to dismiss the complaint.

Rather than responding to the motion to dismiss, the plaintiff filed a first amended complaint on May 29, 2025.

On June 12, 2025, the Company filed a motion to dismiss the first amended complaint, which is now fully briefed.

The Company intends to vigorously defend itself in this matter.

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.

We cooperated with this inquiry and, on May 8, 2025, the Office of the Attorney General for the State of California confirmed that the matter is closed.

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.

3 unchanged sentences

See the description below of the lawsuit commenced by the Office of the New York State Attorney General on January 4, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONCLUDED)

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.

2 unchanged sentences

See the description below of the lawsuit commenced by the Bureau on January 4, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONCLUDED)

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.

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On April 24, 2025, the Bureau filed an unopposed motion to withdraw as plaintiff, and on April 29, 2025, the court granted that motion and ordered that the Bureau is no longer a plaintiff in the litigation.

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.

5 unchanged sentences

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.

SUBSEQUENT EVENTS

On July 11, 2025, we extended the date on which our $ 75.0 million Warehouse Facility VI will cease to revolve from September 30, 2026 to September 30, 2028.

The interest rate on borrowings under the facility has been decreased from SOFR plus 210 basis points to SOFR plus 185 basis points.

The servicing fee has also been decreased from 6.0 % to 4.0 % of collections on the underlying consumer loans.

On July 30, 2025, we extended the date on which our $ 300.0 million Warehouse Facility IV will cease to revolve from December 29, 2026 to July 30, 2028.

The interest rate on borrowings under the facility has been decreased from SOFR plus 221.4 basis points to SOFR plus 205 basis points.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements