What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-13 compared with 2025-02-12 · 149 added, 117 removed, 1598 unchanged (14% of the section changed)

37 unchanged sentences

We identified finance charge revenue and allowance for credit losses as a critical audit matter.

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.

The principal consideration for our determination that finance charge revenue and allowance for credit losses is a critical audit matter is 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.

• We tested the design and operating effectiveness of management’s review control over model performance variances including actual and expected future net cash flows.

• We tested the design and operating effectiveness of management’s review control over the statistical model used to determine expected future net cash flows which verifies the statistical model is operating as intended.

• For a selection of loans, we agreed certain loan specific credit quality indicators used in the statistical model to source documents in order to recalculate the expected future net cash flows at loan origination 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 of the design used to reasonably determine estimated future net cash flows.

• For a selection of loans, we validated the application of the regression curve applied to the selected loan in the statistical model by recomputing the amount of future net cash flows produced by the statistical model for the selected loan.

/s/ GRANT THORNTON LLP

20 unchanged sentences

Senior notes 1,087.8 991.3

Mortgage note — 8.4

Deferred income taxes, net 354.0 319.1

4 unchanged sentences

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

Common stock, $ .01 par value, 80,000,000 share s authori zed, 10,680,143 and

12,048,151 shares issued and outstanding as of December 31, 2025 and

2 unchanged sentences

Retained earnings 1,119.2 1,414.7

Accumulated other comprehensive loss ( 0.3 ) ( 1.0 )

Accumulated other comprehensive income (loss) 1.0 ( 0.3 )

Total Shareholders’ Equity 1,523.6 1,749.6

35 unchanged sentences

Net income $ 423.9 $ 247.9 $ 286.1

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 )

Other comprehensive income, net of tax:

Unrealized gain on securities, net of tax 1.3 0.7 1.9

Other comprehensive income 1.3 0.7 1.9

Comprehensive income $ 425.2 $ 248.6 $ 288.0

5 unchanged sentences

Net income — — — 286.1 — 286.1

Other comprehensive loss — — — — ( 3.1 ) ( 3.1 )

Other comprehensive income — — — — 1.9 1.9

Stock-based compensation — — 39.1 — — 39.1

4 unchanged sentences

Net income — — — 247.9 — 247.9

Other comprehensive gain — — — — 1.9 1.9

Other comprehensive income — — — — 0.7 0.7

Stock-based compensation — — 45.0 — — 45.0

4 unchanged sentences

Net income — — — 423.9 — 423.9

Other comprehensive gain — — — — 0.7 0.7

Other comprehensive income — — — — 1.3 1.3

Stock-based compensation — — 50.7 — — 50.7

9 unchanged sentences

Net income $ 423.9 $ 247.9 $ 286.1

Adjustments to reconcile cash provided by operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Provision for credit losses 616.1 814.7 736.2

1 unchanged sentence

Amortization 23.0 21.1 17.7

Credit for deferred income taxes ( 70.4 ) ( 38.0 ) ( 7.7 )

Provision (credit) for deferred income taxes 34.6 ( 70.4 ) ( 38.0 )

Stock-based compensation 50.7 45.0 39.1

4 unchanged sentences

Increase in accounts payable and accrued liabilities 82.9 6.8 49.7

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 income taxes receivable ( 63.0 ) 0.1 4.4

Increase (decrease) in income taxes payable ( 117.2 ) 36.2 78.5

Decrease (increase) in other assets ( 1.0 ) 5.3 18.8

106 unchanged sentences

(“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.

(“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 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 2023-5, Credit Acceptance Funding LLC 2024-A, Credit Acceptance Funding LLC 2024-1, Credit Acceptance Funding LLC 2024-2, Credit Acceptance Funding LLC 2024-3, Credit Acceptance Funding LLC 2024-B, Credit Acceptance Funding LLC 2025-1, and Credit Acceptance Funding LLC 2025-2.

Business Segment Information

42 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:

34 unchanged sentences

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.

The outstanding balance of the allowance for credit losses of each Loan represents the amount required to reduce the 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.

2 unchanged sentences

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.

Our forecast of expected future collections includes estimates for prepayments, which historically have been lower in periods with less availability of consumer credit, 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.

We fully write off the outstanding balance 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 balance 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.

The 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.

14 unchanged sentences

Methodology Changes.

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.

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 .

55 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

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.

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 indirectly financed by us.

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

40 unchanged sentences

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.

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.

We adopted the updated standard on a retrospective basis for the year ended December 31, 2025.

The adoption of ASU 2023-09 expanded our income tax disclosures, but did not otherwise have a material impact on our consolidated financial statements.

New Accounting Updates Not Yet Adopted

5 unchanged sentences

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.

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.

4 unchanged sentences

We are currently evaluating the impact the adoption of ASU 2024-03 will have on our consolidated financial statements and related disclosures.

Targeted Improvements to the Accounting For Internal-Use Software.

In September 2025, the FASB issued ASU 2025-06, which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40 to better reflect current software development approaches.

Under the current guidance, capitalization of software development costs for internal-use software is required once the preliminary project stage is complete.

Under the new guidance, capitalization will no longer align with the project stage but may begin once (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual periods.

Early adoption is permitted, but we have not yet adopted ASU 2025-06.

The adoption of ASU 2025-06 is expected to change how we account for our internal-use software.

However, we do not believe that its adoption will have a material impact 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, 2025 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.

For additional information regarding subsequent events, see Note 16 .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

16 unchanged sentences

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:

10 unchanged sentences

Senior notes 1,087.8 1,131.4 991.3 1,035.3

Mortgage note — — 8.4 8.4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

28 unchanged sentences

Senior notes (1) 1,035.3 — — 1,035.3

Mortgage note (1) — 8.4 — 8.4

(1) Measured at amortized cost with fair value disclosed.

18 unchanged sentences

Asset-backed securities 20.1 0.1 — 20.2

Municipal securities 0.7 — — 0.7

Mortgage-backed securities 1.7 — — 1.7

14 unchanged sentences

Asset-backed securities — — 1.2 — 1.2 —

Mortgage-backed securities 1.7 — — — 1.7 —

Total restricted securities available for sale

175 unchanged sentences

• a significant provision for credit losses expense at the time of assignment for contractual net cash flows we do not expect to realize;

• finance charge revenue in subsequent periods that is significantly in excess of our expected yields.

• finance charge revenue in subsequent periods that is significantly in excess of our expected yield.

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

105 unchanged sentences

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.

We monitor and evaluate the credit quality of Consumer Loans assigned under the 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.

147 unchanged sentences

$ 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

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

7 unchanged sentences

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.

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 )

PROPERTY AND EQUIPMENT

85 unchanged sentences

Senior notes 1,100.0 ( 12.2 ) — 1,087.8

Mortgage note — — — —

Total debt $ 6,387.9 $ ( 33.9 ) $ ( 0.1 ) $ 6,353.9

4 unchanged sentences

Senior notes 1,000.0 ( 8.7 ) — 991.3

Mortgage note 8.4 — — 8.4

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

4 unchanged sentences

(Dollars in millions)

Financings Wholly Owned Subsidiary Maturity Date Financing Amount Interest Rate Basis as of December 31, 2024

Financings Wholly Owned Subsidiary Maturity Date Financing Amount Interest Rate Basis

as of December 31, 2025

Revolving Secured

9 unchanged sentences

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

3 unchanged sentences

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

4 unchanged sentences

Term ABS 2024-B (2) Credit Acceptance Funding LLC 2024-B 12/15/27 (5) $ 300.0 Fixed rate

Term ABS 2025-1 (2) Credit Acceptance Funding LLC 2025-1 03/15/27 (3) $ 400.0 Fixed rate

Term ABS 2025-2 (2) Credit Acceptance Funding LLC 2025-2 11/15/27 (3) $ 500.0 Fixed rate

2028 Senior Notes n/a 12/15/28 $ 600.0 Fixed rate

113 unchanged sentences

Interest rate 6.99 % 6.86 %

Term ABS 2023-1

Term ABS 2023-A

Principal balance outstanding $ — $ 200.0

7 unchanged sentences

Interest rate 6.54 % 6.54 %

Term ABS 2023-3

Term ABS 2024-A

Principal balance outstanding $ 200.0 $ 200.0

4 unchanged sentences

(Dollars in millions) As of December 31,

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 2024-1

3 unchanged sentences

Interest rate 6.01 % 6.01 %

Term ABS 2024-A

Term ABS 2024-2

Principal balance outstanding $ 550.0 $ 550.0

7 unchanged sentences

Interest rate 4.91 % 4.91 %

Term ABS 2024-2

Term ABS 2024-B

Principal balance outstanding $ 300.0 $ 300.0

7 unchanged sentences

Interest rate 5.26 % — %

Term ABS 2024-B

Term ABS 2025-2

Principal balance outstanding $ 500.0 $ —

8 unchanged sentences

Interest rate 9.250 % 9.250 %

Mortgage Note

2030 Senior Notes

Principal balance outstanding $ 500.0 $ —

19 unchanged sentences

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 subsidiaries pay us a monthly servicing fee equal to 4 % of the collections received with respect to the conveyed Loans.

The servicing fee is paid out of the collections.

4 unchanged sentences

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.

In turn, each Funding LLC, other than the Funding LLCs for the Term ABS 2019-2, 2021-1, 2022-2, 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, and 2024-B financings pledged the Loans for the benefit of their respective lenders.

The Term ABS 2023-1, 2023-2, 2023-3, 2023-5, 2024-A, 2024-1, 2024-2, 2024-3, 2025-1, and 2025-2 financings each consist of three classes of notes (or, in the case of the 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.

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.

Each Funding LLC (other than the Funding LLCs of the Term ABS 2019-2, 2021-1, 2022-2, 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.

9 unchanged sentences

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.

On February 28, 2025, we issued $ 500.0 million aggregate principal amount of 6.625 % senior notes due 2030 (the “2030 senior notes”).

The 2030 senior notes were issued pursuant to an indenture, dated as of February 28, 2025, 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 2030 senior notes mature on March 15, 2030 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, 2025.

We used a portion of the net proceeds from the 2030 senior notes to redeem all of the $ 400.0 million outstanding principal amount of our 6.625 % senior notes due 2026 (the “2026 senior notes”).

We used the remaining net proceeds from the 2030 senior notes for general corporate purposes.

During the first quarter of 2025, we recognized a pre-tax loss on extinguishment of debt of $ 1.2 million related to the redemption of the 2026 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”).

7 unchanged sentences

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The 2030 senior notes and 2028 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.

1 unchanged sentence

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.

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

12 unchanged sentences

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.

As of December 31, 2025, we were in compliance with the 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.

1 unchanged sentence

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.

Some of these covenants may indirectly limit the repurchase of common stock or payment of dividends on common stock, and the senior notes indentures include covenants limiting such repurchases and dividend payments.

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

18 unchanged sentences

Provision for income taxes $ 141.5 $ 81.6 $ 81.5

Income Tax Payments

Income tax payments during the year, net of refunds, are comprised of the following:

(In millions) For the Years Ended December 31,

2025 2024 2023

Federal $ 252.9 $ 82.7 $ 19.7

Pennsylvania (a) 6.3 3.9

New York (a) (a) 3.9

Alabama (a) (a) 2.8

Other 26.4 14.7 1.6

State total 26.4 21.0 12.2

Total cash paid for income taxes (net of refunds) $ 279.3 $ 103.7 $ 31.9

(a) The amount of income taxes paid during the year does not meet the 5% disaggregation threshold and is included in “Other.”

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Deferred Taxes

19 unchanged sentences

federal statutory income tax rate to our effective income tax rate is as follows:

For the Years Ended December 31,

(In millions) For the Years Ended December 31,

2025 2024 2023

Amount Percentage Amount Percentage Amount Percentage

federal statutory income tax rate $ 118.7 21.0 % $ 69.2 21.0 % $ 77.2 21.0 %

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Effective income tax rate $ 141.5 25.0 % $ 81.6 24.8 % $ 81.5 22.2 %

(1) For the years ended December 31, 2025, 2024, and 2023, the majority of the tax effect in this category was attributable to state income taxes in New Jersey, Tennessee, Illinois, and Pennsylvania;

New Jersey and Indiana;

and New Jersey, Michigan, New York, Pennsylvania, Maryland, and Alabama, respectively.

(2) Includes uncertain tax benefits applicable to states income taxes.

State and local income taxes

For the year ended December 31, 2025, the impact of state and local income taxes on our effective income tax rate increased from 2024, primarily due to a revision of deferred tax estimates during 2025.

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, 2025, the impact of non-deductible executive compensation expense on our effective income tax rate decreased from 2024, due to a decrease in non-deductible executive compensation expense and an increase in pre-tax income.

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.

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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, 2025 as compared to 2024 was due to a lower realized tax deduction from stock compensation and an increase in pre-tax income.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Unrecognized Tax Benefits

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Unrecognized tax benefits at December 31, $ 79.4 $ 73.0 $ 61.0

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 $ 79.4 million as of December 31, 2025.

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Total 54,329 69,323 232,183

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

STOCK REPURCHASES

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(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.

(2) Represents repurchases under authorizations by our 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 September 29, 2025, our 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, 2025, we had authorization to repurchase 1,760,766 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

STOCK-BASED COMPENSATION PLANS

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• 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.

• For non-employee 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, 2025, is presented below:

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(3) The calculation of weighted average remaining contractual term of RSUs outstanding excludes 171,917 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The grant-date weighted average fair value of RSUs granted in 2025, 2024, and 2023 was $ 453.50 , $ 484.58 , and $ 454.04 , respectively.

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• expire either six or ten years from the date of the grant.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

A summary of the stock option activity under the Incentive Plan for the year ended December 31, 2025, is presented below:

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Exercised ( 69,419 ) 337.65

Forfeited ( 3,958 ) 366.45

Outstanding as of December 31, 2025

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2025 2024 2023

Stock options $ 32.9 $ 33.5 $ 33.8

Restricted stock units $ 45.7 $ 12.1 $ 5.6

Stock options 5.0 32.9 33.5

Total $ 50.7 $ 45.0 $ 39.1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

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.

Our current compensation program for executive officers and senior leaders consists primarily of one-time equity awards with a 10-year vesting period.

We expect to recognize the remaining expense for stock-based awards outstanding as of December 31, 2025 over a weighted-average period of 4.2 years as follows:

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Total $ 257.7 $ 1.2 $ 258.9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

BUSINESS SEGMENT AND OTHER INFORMATION

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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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

COMMITMENTS AND CONTINGENCIES

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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.

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 under the Telephone Consumer Protection Act (“TCPA”), 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.

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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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

The following matters include current actions to which we are a party.

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 December 31, 2025 for these matters was $ 82.6 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 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.

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.

On February 4, 2026, the court issued an opinion and order granting in part and denying in part the Company’s motion to dismiss.

The Company intends to vigorously defend itself in this matter.

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.

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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 – (CONTINUED)

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.

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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 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.

In September 2025, we made an offer to jointly settle this matter and the multi-state matter discussed below on terms that included, among other things, a proposed cash payment of $ 45.0 million.

In January 2026, we reached preliminary alignment with representatives of the agencies involved in this matter and the multi-state matter discussed below on certain material terms of a potential settlement of those legal matters, including a potential cash payment by us of $ 75.5 million.

Discussions with respect to resolution of those matters are ongoing.

Until this matter is fully and finally resolved, the Company intends to vigorously defend itself.

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.

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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.

The Company has been informed that the State of Kansas, the State of Texas, and the State of Iowa have withdrawn from the multi-state 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONCLUDED)

In September 2025, we made an offer to jointly settle this matter and the New York Attorney General matter discussed above on terms that included, among other things, a proposed cash payment of $ 45.0 million.

In January 2026, we reached preliminary alignment with representatives of the agencies involved in this matter and the New York Attorney General matter discussed above on certain material terms of a potential settlement of those legal matters, including a potential cash payment by us of $ 75.5 million.

Discussions with respect to resolution of those matters are ongoing.

Until this matter is fully and finally resolved, the Company intends to vigorously defend itself.

Litigation Resolved during 2025

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.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONCLUDED)

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.

We lease office equipment that, in the normal course of business, we expect to have to renew or replace with other leases.

Total rental expense on all operating leases was $ 2.2 million for 2025, $ 2.0 million for 2024, and $ 1.2 million for 2023.

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Lease Commitments

SUBSEQUENT EVENTS

On January 15, 2026, we extended the date on which our $ 100.0 million Term ABS 2021-1 financing will cease to revolve from February 17, 2026 to January 18, 2028.

The interest rate on borrowings under the financing was decreased from SOFR plus 220 basis points to SOFR plus 140 basis points.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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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-K

Item 8. Financial Statements and Supplementary Data