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Credit Acceptance Corp (NASDAQ: CACC) is a distinguished Michigan-based indirect finance company, operating since 1972. With a workforce that exceeds 1,300 employees, the company is dedicated to transforming lives through its innovative finance solutions. Credit Acceptance partners with car dealers across the United States to facilitate vehicle sales to customers, irrespective of their credit histories. This collaboration enables car dealers to sell more vehicles, while also offering individuals access to necessary transportation, thereby improving their quality of life.
The company experienced an impressive operating revenue of $723 million in 2014, which reflects its robust financial health and effective business model. Credit Acceptance's core revenue streams include finance charges, premiums from the reinsurance of vehicle service contracts, and various fees, with finance charges and servicing fees being the predominant sources.
Credit Acceptance's unique value proposition lies in its inclusive approach to financing, which garners repeat and referral sales. By catering to consumers who may not qualify for traditional financing, the company taps into a significant market segment, driving sustainable growth and profitability. Additionally, the company’s motto, “We change lives!” underscores its commitment to making a substantial impact on both dealers and customers.
Credit Acceptance's recent projects and achievements include the continued refinement of their Consumer Loan collection rates, with an emphasis on enhancing forecast accuracy and improving net cash flows. The latest data, as of December 31, 2023, highlights the company’s ongoing efforts to optimize its collection strategies, ensuring financial stability and operational excellence.
The company prides itself on fostering a supportive work environment that encourages team members to reach their fullest potential. Besides offering competitive benefits, progressive career opportunities, and a casual dress code, Credit Acceptance espouses values such as positivity, respect, insightfulness, directness, and earnestness in its operations and workplace culture.
Credit Acceptance Corporation (Nasdaq: CACC) announced the successful completion of a $389.9 million asset-backed non-recourse secured financing, involving loans valued at approximately $500.1 million. The financing will be used to repay existing debt and serve general corporate purposes, with an expected annualized cost of around 8.5%. The structure ensures that dealer relationships remain intact and preserves their rights to future payments. Importantly, the notes issued will not be registered under the Securities Act of 1933, impacting their availability to investors.
Credit Acceptance Corporation (CACC) reported a significant decline in net income for Q3 2022, with net income of $86.8 million ($6.49 per diluted share), down 65.3% from $250 million ($15.79 per diluted share) in Q3 2021. Year-to-date figures also showed a drop, from $740.7 million ($44.73 per diluted share) in 2021 to $408.5 million ($29.74 per diluted share) in 2022. The decrease was attributed to a $188.6 million increase in the provision for credit losses and a decline in finance charges. However, Consumer Loan assignment volume grew by 29.3%, as unit and dollar volumes increased amid a growing dealer base.
Credit Acceptance Corporation (Nasdaq: CACC) has welcomed Ravi Mohan as its new Chief Technology Officer, effective October 24, 2022. Ravi, previously from Datto, Oracle, and Adobe, is set to enhance the company's technological capabilities, aligning with its strategic goals. His experience in cloud engineering and enterprise applications will be instrumental in improving services for team members, dealers, and consumers. CEO Ken Booth expressed confidence in Ravi's ability to drive positive changes within the company's culture and technology, particularly in today's challenging financial landscape.
Credit Acceptance Corporation (CACC) has announced its third quarter 2022 earnings will be released on November 1, 2022, after market close. A conference call and webcast will be held the same day at 5:00 p.m. ET to discuss these earnings. The company, which has been providing financing solutions for automobile dealers since 1972, offers programs that allow consumers with poor credit histories to purchase vehicles. Credit Acceptance also helps consumers improve their credit scores, paving the way for more traditional financing options in the future.
Credit Acceptance Corporation (CACC) mourns the loss of its founder, Don Foss, who passed away on August 14, 2022, from cancer complications. His innovative approach in the automotive industry began in 1967, leading to the establishment of one of the largest auto finance companies in the U.S. Don served as CEO from 1972 to 2002 and was recognized with various awards for his contributions. He established scholarships for students in automotive careers and was dedicated to philanthropy, leaving behind a legacy of community service. The company expresses deep condolences to the Foss family and acknowledges his impactful legacy.
On August 12, 2022, Credit Acceptance Corporation (CACC) announced a three-year extension of its $500 million asset-backed non-recourse secured financing, originally established on August 28, 2019. The revolving period for this financing has been extended from August 15, 2022, to August 15, 2025. Additionally, the interest rate was increased from 3.13% to 5.15%, while the servicing fee was reduced from 6.0% to 4.0% of collections on the underlying consumer loans. No other material terms were altered in this financing agreement.
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