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What changed in CREDIT ACCEPTANCE CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CREDIT ACCEPTANCE CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+198 added−181 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-12)

Top changes in CREDIT ACCEPTANCE CORP's 2025 10-K

198 paragraphs added · 181 removed · 155 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

21 edited+9 added−2 removed108 unchanged
Biggest changeIn addition, we compete by offering a profitable and efficient method for Dealers to finance consumers who would be more difficult or less profitable to finance through other methods. 9 Customer and Geographic Concentrations The following tables provide information regarding the five states that were responsible for the largest dollar volume of Consumer Loan assignments and the related number of active Dealers during 2024, 2023, and 2022: For the Year Ended December 31, 2024 (Dollars in millions) Consumer Loan Assignments Active Dealers (2) Dollar Volume (1) % of Total Number % of Total Michigan $ 372.4 8.1 % 861 5.6 % Texas 327.9 7.1 % 1,295 8.4 % New Jersey 303.5 6.6 % 386 2.5 % Ohio 269.5 5.8 % 1,024 6.6 % Florida 233.7 5.1 % 873 5.6 % All other states 3,111.4 67.3 % 11,024 71.3 % Total $ 4,618.4 100.0 % 15,463 100.0 % For the Year Ended December 31, 2023 (Dollars in millions) Consumer Loan Assignments Active Dealers (2) Dollar Volume (1) % of Total Number % of Total Michigan $ 326.3 7.9 % 833 5.9 % Texas 272.5 6.6 % 1,170 8.3 % Ohio 245.2 5.9 % 986 7.0 % New Jersey 238.2 5.7 % 357 2.5 % Tennessee 216.0 5.2 % 569 4.0 % All other states 2,849.6 68.7 % 10,259 72.3 % Total $ 4,147.8 100.0 % 14,174 100.0 % For the Year Ended December 31, 2022 (Dollars in millions) Consumer Loan Assignments Active Dealers (2) Dollar Volume (1) % of Total Number % of Total Michigan $ 353.0 9.7 % 731 6.1 % New York 229.8 6.3 % 687 5.8 % Ohio 205.7 5.7 % 832 7.0 % Texas 205.5 5.7 % 903 7.6 % New Jersey 204.0 5.6 % 300 2.5 % All other states 2,427.3 67.0 % 8,448 71.0 % Total $ 3,625.3 100.0 % 11,901 100.0 % (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.
Biggest changeIn addition, we compete by offering a profitable and efficient method for Dealers to finance consumers who would be more difficult or less profitable to finance through other methods. 9 Customer and Geographic Concentrations The following tables provide information regarding the five states that were responsible for the largest dollar volume of Consumer Loan assignments and the related number of active Dealers during 2025, 2024, and 2023: For the Year Ended December 31, 2025 (Dollars in millions) Consumer Loan Assignments Active Dealers (2) Dollar Volume (1) % of Total Number % of Total Michigan $ 308.3 8.0 % 854 5.4 % Texas 281.2 7.3 % 1,377 8.7 % Ohio 241.1 6.3 % 1,062 6.7 % New Jersey 244.9 6.4 % 397 2.5 % Florida 168.2 4.4 % 924 5.9 % All other states 2,612.4 67.6 % 11,131 70.8 % Total $ 3,856.1 100.0 % 15,745 100.0 % For the Year Ended December 31, 2024 (Dollars in millions) Consumer Loan Assignments Active Dealers (2) Dollar Volume (1) % of Total Number % of Total Michigan $ 372.4 8.1 % 861 5.6 % Texas 327.9 7.1 % 1,295 8.4 % New Jersey 303.5 6.6 % 386 2.5 % Ohio 269.5 5.8 % 1,024 6.6 % Florida 233.7 5.1 % 873 5.6 % All other states 3,111.4 67.3 % 11,024 71.3 % Total $ 4,618.4 100.0 % 15,463 100.0 % For the Year Ended December 31, 2023 (Dollars in millions) Consumer Loan Assignments Active Dealers (2) Dollar Volume (1) % of Total Number % of Total Michigan $ 326.3 7.9 % 833 5.9 % Texas 272.5 6.6 % 1,170 8.3 % Ohio 245.2 5.9 % 986 7.0 % New Jersey 238.2 5.7 % 357 2.5 % Tennessee 216.0 5.2 % 569 4.0 % All other states 2,849.6 68.7 % 10,259 72.3 % Total $ 4,147.8 100.0 % 14,174 100.0 % (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.
Representatives service Consumer Loans through our servicing platform, which consists of the following two systems: • The collection system, which assigns Consumer Loans to representatives through a predictive dialer and records all collection activity, including: • details of past phone conversations with the consumer; • collection letters sent; • promises to pay; • broken promises; • payment history; • repossession orders; and • collection attorney activity. • The servicing system, which maintains a record of all transactions relating to Consumer Loan assignments and is a primary source of data utilized to: • determine the outstanding balance of the Consumer Loans; • forecast future collections; • analyze the profitability of our program; and • evaluate our proprietary credit scoring system. 8 Ancillary Products We provide Dealers the ability to offer vehicle service contracts to consumers through our relationships with Third-Party Providers (“TPPs”).
Representatives service Consumer Loans through our servicing platform, which consists of the following two systems: • The collection system, which assigns Consumer Loans to representatives through a predictive dialer and records all collection activity, including: • details of phone conversations with the consumer; • collection letters sent; • promises to pay; • broken promises; • payment history; • repossession orders; and • collection attorney activity. • The servicing system, which maintains a record of all transactions relating to Consumer Loan assignments and is a primary source of data utilized to: • determine the outstanding balance of the Consumer Loans; • forecast future collections; • analyze the profitability of our program; and • evaluate our proprietary credit scoring system. 8 Ancillary Products We provide Dealers the ability to offer vehicle service contracts to consumers through our relationships with Third-Party Providers (“TPPs”).
See the description below of the lawsuit commenced by the Office of the New York State Attorney General on January 4, 2023. On April 22, 2019, we received a civil investigative demand from the Bureau seeking, among other things, certain information relating to the Company’s origination and collection of Consumer Loans, TPPs, and credit reporting.
See the description below of the lawsuit commenced by the Office of the New York State Attorney General on January 4, 2023. 11 On April 22, 2019, we received a civil investigative demand from the Bureau seeking, among other things, certain information relating to the Company’s origination and collection of Consumer Loans, TPPs, and credit reporting.
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. VSC Re currently reinsures vehicle service contracts that are offered through one of our TPPs.
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.
The following table shows the percentage of Consumer Loans assigned to us with either FICO ® scores below 650 or no FICO ® scores: For the Years Ended December 31, Consumer Loan Assignment Volume 2024 2023 2022 Percentage of total unit volume with either FICO ® scores below 650 or no FICO ® scores 80.6 % 80.9 % 84.8 % Business Segment Information We currently operate in one reportable segment which represents our core business of offering innovative financing solutions and related products and services that enable Dealers to sell vehicles to consumers regardless of their credit history.
The following table shows the percentage of Consumer Loans assigned to us with either FICO ® scores below 650 or no FICO ® scores: For the Years Ended December 31, Consumer Loan Assignment Volume 2025 2024 2023 Percentage of total unit volume with either FICO ® scores below 650 or no FICO ® scores 79.5 % 80.6 % 80.9 % Business Segment Information We currently operate in one reportable segment which represents our core business of offering innovative financing solutions and related products and services that enable Dealers to sell vehicles to consumers regardless of their credit history.
The following table sets forth the percent relationship to total revenue of each of these sources: For the Years Ended December 31, Percent of Total Revenue 2024 2023 2022 Finance charges 92.2 % 92.3 % 92.0 % Premiums earned 4.4 % 4.2 % 3.4 % Other income 3.4 % 3.5 % 4.6 % Total revenue 100.0 % 100.0 % 100.0 % 5 Operations Sales and Marketing .
The following table sets forth the percent relationship to total revenue of each of these sources: For the Years Ended December 31, Percent of Total Revenue 2025 2024 2023 Finance charges 92.4 % 92.2 % 92.3 % Premiums earned 4.1 % 4.4 % 4.2 % Other income 3.5 % 3.4 % 3.5 % Total revenue 100.0 % 100.0 % 100.0 % 5 Operations Sales and Marketing .
Dealer Loans and Purchased Loans are collectively referred to as “Loans.” The following table shows the percentage of Consumer Loans assigned to us under each of the programs for each of the last three years: Unit Volume Dollar Volume (1) For the Years Ended December 31, Portfolio Program Purchase Program Portfolio Program Purchase Program 2022 73.5 % 26.5 % 69.8 % 30.2 % 2023 74.0 % 26.0 % 70.7 % 29.3 % 2024 78.7 % 21.3 % 77.5 % 22.5 % (1) Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program.
Dealer Loans and Purchased Loans are collectively referred to as “Loans.” The following table shows the percentage of Consumer Loans assigned to us under each of the programs for each of the last three years: Unit Volume Dollar Volume (1) For the Years Ended December 31, Portfolio Program Purchase Program Portfolio Program Purchase Program 2023 74.0 % 26.0 % 70.7 % 29.3 % 2024 78.7 % 21.3 % 77.5 % 22.5 % 2025 74.2 % 25.8 % 71.7 % 28.3 % (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.
Instead, our accounting reflects that of a lender to the Dealer. The classification as a Dealer Loan for accounting purposes is primarily a result of (1) the Dealer’s financial interest in the Consumer Loan and (2) certain elements of our legal relationship with the Dealer.
The classification as a Dealer Loan for accounting purposes is primarily a result of (1) the Dealer’s financial interest in the Consumer Loan and (2) certain elements of our legal relationship with the Dealer.
The number of Dealer enrollments and active Dealers for each of the last three years are presented in the table below: For the Years Ended December 31, Dealer Enrollments Active Dealers (1) 2022 3,627 11,901 2023 5,605 14,174 2024 6,088 15,463 (1) Active Dealers are Dealers who have received funding for at least one Loan during the period.
The number of Dealer enrollments and active Dealers for each of the last three years are presented in the table below: For the Years Ended December 31, Dealer Enrollments Active Dealers (1) 2023 5,605 14,174 2024 6,088 15,463 2025 5,752 15,745 (1) Active Dealers are Dealers who have received funding for at least one Loan during the period.
CAPS allows Dealers to input a consumer’s credit application and view the response from us via the internet. CAPS allows Dealers to: (1) receive a quick approval from us; (2) interact with our proprietary credit scoring system to optimize the structure of each transaction prior to delivery; and (3) create, electronically execute, and print legally compliant Consumer Loan documents.
Each process allows Dealers to: (1) receive a quick approval from us; (2) interact with our proprietary credit scoring system to optimize the structure of each transaction prior to delivery; and (3) create, electronically execute, and print legally compliant Consumer Loan documents.
Ongoing Regulatory Matters Regulatory matters to which we are a party include the following matters, in each case the eventual scope, duration, and outcome of which we cannot predict at this time. • 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. 11 • 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.
Ongoing Regulatory Matters Regulatory matters to which we are a party include the following matters, in each case the eventual scope, duration, and outcome of which we cannot predict at this time. • 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.
Advances are made only after the consumer and Dealer have signed a Consumer Loan contract, we have received the executed Consumer Loan contract and supporting documentation in either physical or electronic form, and we have approved all of the related stipulations for funding. 4 For accounting purposes, the transactions described under the Portfolio Program are not considered to be loans to consumers.
Advances are made only after the consumer and Dealer have signed a Consumer Loan contract, we have received the executed Consumer Loan contract and supporting documentation in either physical or electronic form, and we have approved all of the related stipulations for funding.
Consumers are obligated to make payments on the Consumer Loan directly to us, and any failure to make such payments will result in our pursuing payment through collection efforts. All Consumer Loans submitted to us for assignment are processed through our Credit Approval Processing System (“CAPS”).
Consumers are obligated to make payments on the Consumer Loan directly to us, and any failure to make such payments will result in our pursuing payment through collection efforts.
The following table presents team members by operating function: Number of Team Members as of December 31, Operating Function 2024 2023 2022 Servicing 906 845 907 Originations 578 533 505 Engineering, Analytics, Marketing, and Product Management 512 420 425 Support 435 434 409 Total 2,431 2,232 2,246 As of December 31, 2024, we had 2,431 full- and part-time team members.
The following table presents team members by operating function: Number of Team Members as of December 31, Operating Function 2025 2024 2023 Servicing 799 937 877 Originations 588 578 533 Engineering, Analytics, Marketing, and Product Management 542 512 420 Support 385 404 402 Total 2,314 2,431 2,232 As of December 31, 2025, we had 2,314 full- and part-time team members.
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. In addition, governmental regulations that would deplete the supply of used vehicles, such as environmental protection regulations governing emissions or fuel consumption, could have a material adverse effect on us.
In addition, governmental regulations that would deplete the supply of used vehicles, such as environmental protection regulations governing emissions or fuel consumption, could have a material adverse effect on us. Dealers must also comply with credit and trade practice statutes and regulations.
Payments of Dealer Holdback and accelerated Dealer Holdback are not included. (2) Active Dealers are Dealers who have received funding for at least one Loan during the year.
Payments of Dealer Holdback and accelerated Dealer Holdback are not included. (2) Active Dealers are Dealers who have received funding for at least one Loan during the year. No single Dealer’s Loans receivable balance accounted for more than 10% of total Loans receivable balance as of December 31, 2025 or 2024.
Regulation Our business is subject to laws and regulations, including the Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, prohibitions against unfair, deceptive, and abusive acts and practices, and various other state and federal laws and regulations.
For additional information, see Note 2 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference. 10 Regulation Our business is subject to laws and regulations, including the Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, prohibitions against unfair, deceptive, and abusive acts and practices, and various other state and federal laws and regulations.
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.
Dealers have an opportunity to receive an accelerated Dealer Holdback payment each time a pool of Consumer Loans is closed.
As of October 29, 2024, the Company's motion to dismiss has been fully briefed. The Company intends to vigorously defend itself in this matter. • On March 18, 2016, we received a subpoena from the Attorney General of the State of Maryland, relating to the Company’s repossession and sale policies and procedures in the state of Maryland.
As of October 29, 2024, the Company's motion to dismiss has been fully briefed. The Company intends to vigorously defend itself in this matter.
Since typically the combination of the advance and the consumer’s down payment provides the Dealer with a cash profit at the time of sale, the Dealer’s risk in the Consumer Loan is limited. We cannot demand repayment of the advance from the Dealer except in the event the Dealer is in default of the Dealer servicing agreement.
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. 4 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.
This seasonality has a material impact on our interim results, as we are required to recognize a significant provision for credit losses expense at the time of assignment. For additional information, see Note 2 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference.
Seasonality Our business is seasonal with peak Consumer Loan assignments and collections occurring during the first quarter of the year. This seasonality has a material impact on our interim results, as we are required to recognize a significant provision for credit losses expense at the time of assignment.
Removed
No single Dealer’s Loans receivable balance accounted for more than 10% of total Loans receivable balance as of December 31, 2024 or 2023. 10 Seasonality Our business is seasonal with peak Consumer Loan assignments and collections occurring during the first quarter of the year.
Added
We cannot demand repayment of the advance from the Dealer except in the event the Dealer is in default of the Dealer servicing agreement.
Removed
Dealers must also comply with credit and trade practice statutes and regulations.
Added
For accounting purposes, the transactions described under the Portfolio Program are not considered to be loans to consumers. Instead, our accounting reflects that of a lender to the Dealer.
Added
Consumer Loans submitted to us for assignment are processed either through our Credit Approval Processing System (“CAPS”) or via an integration we have with aggregators used by Dealers to submit credit application information to various finance sources. Each of these processes allow Dealers to submit a consumer's credit application to us and receive a response.
Added
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.
Added
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.
Added
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.
Added
Discussions with respect to resolution of those matters are ongoing. • 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.
Added
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. 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.
Added
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

25 edited+13 added−0 removed112 unchanged
Biggest changeWe are subject to income tax in many of the various jurisdictions in which we operate. Increases in statutory income tax rates and other adverse changes in applicable law in these jurisdictions could have an adverse effect on our results of operations. In the ordinary course of business, there are transactions and calculations where the ultimate tax determination is uncertain.
Biggest changeIncreases in statutory income tax rates and other adverse changes in applicable law in these jurisdictions could have an adverse effect on our results of operations. In the ordinary course of business, there are transactions and calculations where the ultimate tax determination is uncertain. At any one time, multiple tax years are subject to audit by various taxing jurisdictions.
If third parties or our team members breach or are able to breach our network security or the network security of a third party that we share information with or otherwise are able to misappropriate our consumers’ and team members’ personal information, or if we give third parties or our team members improper access to our consumers’ and team members’ personal information, we could be subject to liability.
If third parties or our team members are able to breach our network security or the network security of a third party that we share information with or otherwise are able to misappropriate our consumers’ and team members’ personal information, or if we give third parties or our team members improper access to our consumers’ and team members’ personal information, we could be subject to liability.
Additionally, inflation, higher gasoline prices, the deferral or resumption of student loan payments, increased focus on climate-related initiatives and regulation, declining stock market values, unstable real estate values, resets of adjustable rate mortgages to higher interest rates, increasing unemployment levels, general availability of consumer credit, or other factors that impact consumer confidence or disposable income could increase loss frequency and decrease consumer demand for automobiles as well as weaken collateral values of automobiles.
Additionally, inflation, higher gasoline prices, the deferral or resumption of student loan payments, increased focus on climate-related initiatives and regulation, declining stock market values, unstable real estate values, resets of adjustable rate mortgages to higher interest rates, increasing unemployment levels, general availability of consumer credit, tariffs, or other factors that impact consumer confidence or disposable income could increase loss frequency and decrease consumer demand for automobiles as well as weaken collateral values of automobiles.
The regulations to which we are or may become subject could result in a material adverse effect on our business. Reference should be made to Item 1. Business “Regulation” for a discussion of regulatory risk factors.
The regulations to which we are or may become subject could result in a material adverse effect on our business. Reference should be made to Item 1. Business “Regulation” for a discussion of regulatory risk factors. 23
We have relationships with TPPs to administer vehicle service contracts and GAP underwritten by third-party insurers and financed by us. We depend on these TPPs to evaluate and pay claims in an accurate and timely manner.
We have relationships with TPPs to administer vehicle service contracts and GAP underwritten by third-party insurers and indirectly financed by us. We depend on these TPPs to evaluate and pay claims in an accurate and timely manner.
Further, the rapid evolution and increased adoption of artificial intelligence technologies, increased sophistication and activities of organized crime, hackers, terrorists, activists and other external parties may increase our level of cybersecurity risk.
Further, the rapid evolution and increased adoption of artificial intelligence (“AI”) technologies, increased sophistication and activities of organized crime, hackers, terrorists, activists, and other external parties may increase our level of cybersecurity risk.
Advances in computer capabilities, new discoveries in the field of cryptography, or other events or developments may result in a compromise or breach of the algorithms that we use to protect sensitive consumer transaction data. A party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations.
Advances in computer capabilities, new discoveries in the field of cryptography, advancements in AI, or other events or developments may result in a compromise or breach of the algorithms that we use to protect sensitive consumer transaction data. A party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations.
A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interests which may conflict with the interests of our other security holders. As of December 31, 2024, based on filings made with the SEC and other information made available to us, Allan V.
A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interests which may conflict with the interests of our other security holders. As of December 31, 2025, based on filings made with the SEC and other information made available to us, Allan V.
We and our third-party service providers face ongoing threats to our systems and data and from time to time experience cyberattacks and other security incidents. Numerous national finance companies have disclosed security breaches involving sophisticated cyber-attacks, including ransomware, that were not recognized or detected until after such companies had been affected, notwithstanding the preventive measures such companies had in place.
We and our third-party service providers face ongoing threats to our systems and data and occasionally experience cyberattacks and other security incidents. Numerous national finance companies have disclosed security breaches involving sophisticated cyber-attacks, including ransomware, that were not recognized or detected until after such companies had been affected, notwithstanding the preventive measures such companies had in place.
In particular, our revolving credit facility requires, among other things, that we maintain (i) as of the end of each fiscal quarter, a ratio of consolidated funded debt less unrestricted cash and cash equivalents to consolidated tangible net worth at or below a specified maximum and (ii) as of the end of each fiscal quarter, a ratio of consolidated income available for fixed charges for the period of four consecutive fiscal quarters most recently ended to consolidated fixed charges, as defined in the agreements, for that period of not less than a specified minimum.
In particular, our revolving credit facility and warehouse facilities require, among other things, that we maintain (i) as of the end of each fiscal quarter, a ratio of consolidated funded debt less unrestricted cash and cash equivalents to consolidated tangible net worth at or below a specified maximum and (ii) as of the end of each fiscal quarter, a ratio of consolidated income available for fixed charges for the period of four consecutive fiscal quarters most recently ended to consolidated fixed charges, as defined in the agreements, for that period of not less than a specified minimum.
Their interests may conflict with the interests of our other security holders. 17 The beneficial ownership reported by Mr. Apple and Mr. Neary includes, in each case, beneficial ownership in their capacity as trustees of shares held in a marital trust established by our late founder, Donald Foss, and representing 8.6% of our common stock as of December 31, 2024.
Their interests may conflict with the interests of our other security holders. 17 The beneficial ownership reported by Mr. Apple and Mr. Neary includes, in each case, beneficial ownership in their capacity as trustees of shares held in a marital trust established by our late founder, Donald Foss, and representing 8.0% of our common stock as of December 31, 2025.
Although we have experienced cybersecurity incidents from time to time that have not had a material effect on our business, financial condition, or results of operations, there can be no assurance that a cyber-attack, security breach, or other cybersecurity incident will not have a material adverse effect on us in the future.
Although we have experienced occasional cybersecurity incidents that have not had a material effect on our business, financial condition, or results of operations, there can be no assurance that a cyber-attack, security breach, or other cybersecurity incident will not have a material adverse effect on us in the future.
Key factors involved in the execution of our business strategy include achieving our desired Consumer Loan assignment volume, continued and successful use of CAPS and pricing strategy, the use of effective credit risk management techniques and servicing strategies, continued investment in technology to support operating efficiency, and continued access to funding and liquidity sources.
Key factors involved in the execution of our business strategy include achieving our desired Consumer Loan assignment volume, continued and successful use of CAPS and other internet-based credit application processing systems and pricing strategy, the use of effective credit risk management techniques and servicing strategies, continued investment in technology to support operating efficiency, and continued access to funding and liquidity sources.
In addition, an event of default under our revolving credit facility would permit the lenders thereunder to terminate all commitments to extend further credit under our revolving credit facility.
In addition, an event of default under our revolving credit facility or warehouse facilities would permit the lenders thereunder to terminate all commitments to extend further credit under such facilities.
Foss’s death on August 14, 2022, until the final adjournment of the tenth annual meeting of shareholders held by the Company after the date of the shareholder agreement, the shares in the trust are to be voted in accordance with the recommendation of the Company’s Board of Directors with respect to election and removal of directors, certain routine matters, and any other proposal to be submitted to the Company’s shareholders with respect to any extraordinary transaction providing for the acquisition of all of the Company’s outstanding common stock.
Foss’s death on August 14, 2022, until the final adjournment of the Company’s 2026 annual meeting of shareholders, the shares in the trust are to be voted in accordance with the recommendation of the Company’s Board of Directors with respect to election and removal of directors, certain routine matters, and any other proposal to be submitted to the Company’s shareholders with respect to any extraordinary transaction providing for the acquisition of all of the Company’s outstanding common stock.
Neary beneficially owned 8.6% of our common stock (representing, collectively, beneficial ownership of 42.8% of our common stock, after taking into account those shares reported as beneficially owned by more than one of these shareholders).
Neary beneficially owned 8.0% of our common stock (representing, collectively, beneficial ownership of 45.3% of our common stock, after taking into account those shares reported as beneficially owned by more than one of these shareholders).
During the year ended December 31, 2024, our five largest states (measured by 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) contained 28.7% of Dealers.
During the year ended December 31, 2025, our five largest states (measured by 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) contained 29.2% of Dealers.
We are dependent on our senior management, and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably. Our senior management average 16 years of experience with us. Our success is dependent upon the management and the leadership skills of this team.
We are dependent on our senior management, and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably. As of December 31, 2025, our senior management averaged 15 years of experience with us. Our success is dependent upon the management and the leadership skills of this team.
We are subject to general economic conditions which are beyond our control. During periods of economic slowdown or recession, delinquencies, defaults, repossessions, and losses may increase on our Consumer Loans, and Consumer Loan prepayments may decline.
We are subject to general economic conditions which are beyond our control. During periods of economic slowdown or recession, delinquencies, defaults, repossessions, and losses may increase on our Consumer Loans, and Consumer Loan prepayments, which historically have been lower in periods with less availability of consumer credit, may decline.
At any one time, multiple tax years are subject to audit by various taxing jurisdictions. We provide reserves for potential payments of tax to various tax authorities related to uncertain tax positions. Please see the Critical Accounting Estimates – Uncertain Tax Positions section in Item 7 of this Form 10-K, which is incorporated herein by reference.
We provide reserves for potential payments of tax to various tax authorities related to uncertain tax positions. Please see the Critical Accounting Estimates – Uncertain Tax Positions section in Item 7 of this Form 10-K, which is incorporated herein by reference.
Our systems, and those of our third-party service providers, are dependent upon computer and telecommunications equipment, software systems, and internet access. The temporary or permanent loss of any components of these systems through hardware failures, software errors, operating malfunctions, the vulnerability of the internet, or otherwise could interrupt our business operations and harm our business.
The temporary or permanent loss of any components of these systems through hardware failures, software errors, operating malfunctions, the vulnerability of the internet, or otherwise could interrupt our business operations and harm our business.
Apple beneficially owned 20.0% of our common stock, Prescott General Partners LLC and its affiliates beneficially owned 19.3% of our common stock, Jill Foss Watson beneficially owned 14.2% of our common stock, and John P.
Apple beneficially owned 20.9% of our common stock, Prescott General Partners LLC and its affiliates beneficially owned 20.7% of our common stock, Jill Foss Watson beneficially owned 15.8% of our common stock, and John P.
For a description of significant litigation to which we are a party, see Note 15 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference. 22 Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations.
For a description of significant litigation to which we are a party, see Note 15 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference.
Our security measures are designed to protect against security breaches, but our failure to prevent security breaches could subject us to liability, decrease our profitability, and damage our reputation. Legal and Regulatory Risks Litigation we are involved in from time to time may adversely affect our financial condition, results of operations, and cash flows.
Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures. Legal and Regulatory Risks Litigation we are involved in from time to time may adversely affect our financial condition, results of operations, and cash flows.
Technology and Cybersecurity Risks Our dependence on technology could have a material adverse effect on our business. All Consumer Loans submitted to us for assignment are processed through our internet-based CAPS application. Our Consumer Loan servicing platform is also technology based. We rely on these systems to record and process significant amounts of data quickly and accurately.
Technology and Cybersecurity Risks Our dependence on technology could have a material adverse effect on our business. All Consumer Loans submitted to us for assignment are processed either through CAPS or via an integration we have with aggregators used by Dealers to submit credit application information to various finance sources. Our Consumer Loan servicing platform is also technology based.
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Imposition of or increases in tariffs on U.S. imports could result in higher used car prices in the United States, leading to decreased Dealer origination of Consumer Loans and a decline in Consumer Loan assignments to us.
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We rely on these systems to record and process significant amounts of data quickly and accurately. Our systems, and those of our third-party service providers, are dependent upon computer and telecommunications equipment, software systems, and internet access.
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Our security measures are designed to protect against security breaches, but our failure to prevent security breaches could subject us to liability, decrease our profitability, and damage our reputation. The development and use of artificial intelligence presents risks and challenges that may adversely impact our business.
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We, or TPPs, third-party service providers, automobile dealers who participate in our programs, or other third parties with which we transact or have business relationships, may develop or incorporate AI technology in certain business processes, services, or products. The development and use of AI presents several potential risks and challenges to our business.
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The implementation by us of AI technologies may require significant additional investments in infrastructure, personnel, and training. There can be no assurance that such investments will yield the anticipated benefits or that we will be able to successfully integrate AI into our existing systems and processes without disruption.
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We may not be able to effectively implement or keep pace with evolutions in AI or other technology-driven products and services as quickly or with the same degree of success as our competitors.
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Failure to successfully keep pace with technological change affecting the financial services industry could harm our ability to maintain and expand our relationships with Dealers and otherwise adversely affect our business and our ability to compete successfully in the automobile finance market.
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The legal and regulatory environment relating to AI is complex and rapidly evolving in the United States and includes both regulatory frameworks targeting AI specifically and other laws and regulations related to such matters as intellectual property, privacy, consumer protection, and employment, among others, applicable to the use of AI.
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These evolving laws and regulations could affect our approach to AI technology and any implementation of AI technology that we may pursue and could result in significant compliance costs and risk of non-compliance.
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AI models may produce output or take action that is incorrect, that reflects biases included in the data on which they are trained, that results in the release of private, confidential, or proprietary information, that infringes on the intellectual property rights of others, or that is otherwise harmful.
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The limited transparency of AI models increases the challenges associated with assessing the proper operation of AI models, understanding and monitoring the capabilities of AI models, reducing erroneous output of AI models, eliminating bias in AI models, and complying with relevant regulations.
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Further, we may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, which could expose us to risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility. 22 Whether or not we are otherwise able successfully to manage the implementation of AI in our business and address the competitive challenges AI could pose to our business, any failure by TPPs, our third-party service providers, Dealers, or other third parties with which we transact or have business relationships to adhere to our AI policies, or otherwise to use AI in an appropriate manner, could result in legal or regulatory violations, jeopardize our intellectual property rights or those of other parties, or expose us to cybersecurity threats, any of which could adversely affect our business and result in our sustaining reputational, technical, or competitive harm.
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Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations. We are subject to income tax in many of the various jurisdictions in which we operate.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe audit plan is reassessed throughout the year, and the plan is subject to modification by our internal audit team, e.g., based on such considerations as changes to resources, business operations, or internal or external risk factors. The CISO also issues an annual written report to the board of directors on the Program and material cybersecurity risks.
Biggest changeThe audit plan is reassessed throughout the year, and the plan is subject to modification by our internal audit team, e.g., based on such considerations as changes to resources, business operations, and internal or external risk factors.
At least annually, our internal audit team conducts a formal risk assessment and develops an audit plan that identifies, assesses, and prioritizes risks that include cybersecurity. The results of the risk assessment and the proposed audit plan are communicated to various leaders within the Company as well as the audit committee of the board of directors for input.
At least annually, our internal audit team conducts a formal risk assessment and develops an audit plan that identifies, assesses, and prioritizes risks that include cybersecurity. The results of the risk assessment and the proposed audit plan are communicated to various leaders within the Company as well as the audit committee of our board of directors for input.
Our information security team uses a multifaceted approach to assess, identify, and manage material risks to the Company from cybersecurity threats, including testing of the effectiveness of our cybersecurity incident prevention and response systems; conducting routine vulnerability scanning of information systems assets; network/endpoint detection and response coupled with anomaly identification enhanced logging capabilities powered by artificial intelligence software; discovery through collaboration with the Company’s internal audit team; monitoring of threat intelligence feeds provided by industry associations/groups, service providers, and federal/state authorities; and professional service engagements, such as retaining the services of an external 24/7 security operations center and partnering with third parties in testing our information systems for vulnerabilities from external, internal, and social engineering perspectives and assessing the effectiveness of our cybersecurity controls.
Our information security team uses a multifaceted approach to assess, identify, and manage material risks to the Company from cybersecurity threats, including testing of the effectiveness of our cybersecurity incident prevention and response systems; conducting routine vulnerability scanning of information systems assets; network/endpoint detection, and response coupled with anomaly identification enhanced logging capabilities powered by AI software; discovery through collaboration with the Company’s internal audit team; monitoring of threat intelligence feeds provided by industry associations/groups, service providers, and federal/state authorities; and professional service engagements, such as retaining the services of an external 24/7 security operations center and partnering with third parties in testing our information systems for vulnerabilities from external, internal, and social engineering perspectives and assessing the effectiveness of our cybersecurity controls.
For more information about these risks, see the disclosure under the heading “Technology and Cybersecurity Risks” in Part I, Item 1A. Risk Factors. 23 Our board of directors oversees the Company’s risk management process, including cybersecurity risks, directly and through its committees.
For more information about these risks, see the disclosure under the heading “Technology and Cybersecurity Risks” in Part I, Item 1A. Risk Factors. Our board of directors oversees the Company’s risk management process, including cybersecurity risks, directly and through its committees.
The Company has an information security compliance committee (the “Committee”) that consists of the members of the Company's compliance committee, which reports to the board of directors, and at least three members of Company management.
The Company has an information security compliance committee (the “Committee”) that consists of the members of the Company's compliance committee, which reports to our board of directors, and at least three members of Company management.
The Company’s information security team has extensive experience in information security and previous information security work experience in several industries, including defense, manufacturing, and financial services. The CISO reports to the board of directors, the audit committee, and senior management on cybersecurity threats.
The Company’s information security team has extensive experience in information security and previous information security work experience in several industries, including defense, manufacturing, and financial services. The CISO reports to our board of directors and senior management on cybersecurity threats.
We have adopted aspects of the ISO 27002, NIST SP 800-37 Rev. 2, and NIST Cybersecurity frameworks, to which risk management in relation to our information systems is aligned. We categorize our information systems as either critical or secondary, depending on business value and/or risk of financial or compliance impact of cybersecurity incidents.
We have adopted NIST SP 800-37 Rev. 2 and the NIST Cybersecurity Framework, and we have aligned our information systems risk management to these guidelines. We categorize our information systems as either critical or secondary, depending on business value and/or risk of financial or compliance impact of cybersecurity incidents.
The Company takes a risk-based approach to cybersecurity and has implemented cybersecurity policies throughout its operations that are designed to address cybersecurity threats and incidents.
The CISO also issues an annual written report to our board of directors on the Program and material cybersecurity risks. 24 The Company takes a risk-based approach to cybersecurity and has implemented cybersecurity policies throughout its operations that are designed to address cybersecurity threats and incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeTherefore, we continue to have a need for office space. 24
Biggest changeTherefore, we continue to have a need for office space. 25

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe 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.
Biggest changeThe 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 under the Telephone Consumer Protection Act (“TCPA”), for alleged physical and mental harm relating to the repossession and sale of consumers’ vehicles and other debt collection activities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(4) Amount includes 22,292 shares of common stock released to us by team members as payment of tax withholdings upon the settlement of restricted stock units in common stock.
Biggest change(3) Includes 1,568 shares of common stock released to us by team members as payment of tax withholdings upon the settlement of restricted stock units in common stock. (4) Includes 662 shares of common stock released to us by team members as payment of tax withholdings upon the settlement of restricted stock units in common stock.
Stock Performance Graph The following graph compares the percentage change in the cumulative total shareholder return on our common stock during the five-year period ended December 31, 2024 with the cumulative total return on the NASDAQ Composite Index and a peer group index based upon approximately 100 companies included in the Dow Jones U.S. Financial Services Index.
Stock Performance Graph The following graph compares the percentage change in the cumulative total shareholder return on our common stock during the five-year period ended December 31, 2025 with the cumulative total return on the NASDAQ Composite Index and a peer group index based upon approximately 100 companies included in the Dow Jones U.S. Financial Services Index.
(2) On August 21, 2023, our board of directors authorized the repurchase by us from time to time of up to two million shares of our common stock (the "August 2023 Authorization"). The August 2023 Authorization, which was announced on August 24, 2023, does not have a specified expiration date.
(2) On August 21, 2023, our board of directors authorized the repurchase by us from time to time of up to two million shares of our common stock (the “August 2023 Authorization”). The August 2023 Authorization, which was announced on August 24, 2023, does not have a specified expiration date.
Repurchases under the August 2023 Authorization may be made in the open market, through privately negotiated transactions, through block trades, pursuant to trading plans adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934 or otherwise.
Repurchases under the August 2023 Authorization and the September 2025 Authorization may be made in the open market, through privately negotiated transactions, through block trades, pursuant to trading plans adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934 or otherwise.
(3) Consists of shares of common stock released to us by team members as payment of tax withholdings upon the settlement of restricted stock units in common stock and the vesting of restricted stock units.
(5) Consists of shares of common stock released to us by team members as payment of tax withholdings upon the settlement of restricted stock units in common stock and the vesting of restricted stock units.
The comparison assumes that $100 was invested on December 31, 2019 in our common stock and in the foregoing indices and assumes the reinvestment of dividends. Source: Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2025. Index Data: Copyright Nasdaq, Inc. Used with permission. All rights reserved. Index Data: Copyright S&P Dow Jones Indices LLC.
The comparison assumes that $100 was invested on December 31, 2020 in our common stock and in the foregoing indices and assumes the reinvestment of dividends. Source: Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2026. Index Data: Copyright Nasdaq, Inc. Used with permission. All rights reserved. Index Data: Copyright S&P Dow Jones Indices LLC.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Global Select Market ® under the symbol “CACC.” Holders As of February 4, 2025, we had approximately 50 shareholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Global Select Market ® under the symbol “CACC.” Holders As of February 6, 2026, we had approximately 50 shareholders of record of our common stock.
As of January 1, 2023, our share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act of 2022. Any excise tax incurred is recognized as part of the cost basis of the shares acquired in the consolidated statements of shareholders’ equity.
Our share repurchases in excess of issuances are subject to a 1% excise tax, which is recognized as part of the cost basis of the shares acquired in the consolidated statements of shareholders’ equity.
All rights reserved. 26 Stock Repurchases The following table summarizes our stock repurchases for the three months ended December 31, 2024: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1 through October 31, 2024 1,945 (3) $ 465.22 — 1,346,570 November 1 through November 30, 2024 178 (3) 463.76 — 1,346,570 December 1 through December 31, 2024 123,771 (4) 485.88 101,479 1,245,091 125,894 $ 485.53 101,479 (1) Average price paid per share excludes excise tax.
All rights reserved. 27 Stock Repurchases The following table summarizes our stock repurchases for the three months ended December 31, 2025: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1 through October 31, 2025 107,303 (3) $ 462.53 105,735 2,055,332 November 1 through November 30, 2025 295,228 (4) 441.25 294,566 1,760,766 December 1 through December 31, 2025 22,274 (5) 443.48 — 1,760,766 424,805 446.74 400,301 (1) Average price paid per share excludes excise tax.
Added
On September 29, 2025, our board of directors authorized the repurchase by us from time to time of up to two million shares of our common stock (the “September 2025 Authorization”) in addition to the prior authorizations by our board of directors. The September 2025 Authorization, which was announced on September 30, 2025, does not have a specified expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe quarterly changes to our forecast of future net cash flows from our Loan portfolio for the period from January 1, 2020 through December 31, 2024 are shown in the following table: (Dollars in millions) Increase (Decrease) in Forecasted Net Cash Flows Three Months Ended Total Loans % Change from Forecast at Beginning of Period March 31, 2020 $ (206.5) -2.3 % June 30, 2020 24.4 0.3 % September 30, 2020 138.5 1.5 % December 31, 2020 (2.7) 0.0 % March 31, 2021 107.4 1.1 % June 30, 2021 104.5 1.1 % September 30, 2021 82.3 0.9 % December 31, 2021 31.9 0.3 % March 31, 2022 110.2 1.2 % June 30, 2022 (43.4) -0.5 % September 30, 2022 (85.4) -0.9 % December 31, 2022 (41.1) -0.5 % March 31, 2023 9.4 0.1 % June 30, 2023 (89.3) -0.9 % September 30, 2023 (69.4) -0.7 % December 31, 2023 (57.0) -0.6 % March 31, 2024 (30.8) -0.3 % June 30, 2024 (189.3) -1.7 % September 30, 2024 (62.8) -0.6 % December 31, 2024 (31.1) -0.3 % 31 The following table presents information on Consumer Loan assignments for each of the last 10 years: Average Total Assignment Volume Consumer Loan Assignment Year Consumer Loan (1) Advance (2) Initial Loan Term (in months) Unit Volume Dollar Volume (2) (in millions) 2015 $ 16,354 $ 7,272 50 298,288 $ 2,167.0 2016 18,218 7,976 53 330,710 2,635.5 2017 20,230 8,746 55 328,507 2,873.1 2018 22,158 9,635 57 373,329 3,595.8 2019 23,139 10,174 57 369,805 3,772.2 2020 24,262 10,656 59 341,967 3,641.2 2021 25,632 11,790 59 268,730 3,167.8 2022 27,242 12,924 60 280,467 3,625.3 2023 27,025 12,475 61 332,499 4,147.8 2024 26,497 11,961 61 386,126 4,618.4 (1) Represents the repayments that we were contractually owed on Consumer Loans at the time of assignment, which include both principal and interest.
Biggest changeThe 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. 31 The following table presents information on Consumer Loan assignments for each of the last 10 years: Average Total Assignment Volume Consumer Loan Assignment Year Consumer Loan (1) Advance (2) Initial Loan Term (in months) Unit Volume Dollar Volume (2) (in millions) 2016 $ 18,218 $ 7,976 53 330,710 $ 2,635.5 2017 20,230 8,746 55 328,507 2,873.1 2018 22,158 9,635 57 373,329 3,595.8 2019 23,139 10,174 57 369,805 3,772.2 2020 24,262 10,656 59 341,967 3,641.2 2021 25,632 11,790 59 268,730 3,167.8 2022 27,242 12,924 60 280,467 3,625.3 2023 27,025 12,475 61 332,499 4,147.8 2024 26,497 11,961 61 386,126 4,618.4 2025 25,423 11,428 60 337,411 3,856.1 (1) Represents the repayments that we were contractually owed on Consumer Loans at the time of assignment, which include both principal and interest.
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.
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.
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.
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.
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.
The implementation of this forecast adjustment during the second quarter of 2024 reduced forecasted net cash flows by $147.2 million, or 1.4%, and increased provision for credit losses by $127.5 million.
During the second quarter of 2023, we adjusted our methodology for forecasting the amount and timing of future net cash flows from our Loan portfolio through the utilization of more recent Consumer Loan performance and Consumer Loan prepayment data.
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.
If the various financing alternatives were to become limited or unavailable to us, our operations and liquidity could be materially and adversely affected. Market Risk We are exposed primarily to market risks associated with movements in interest rates. Our policies and procedures prohibit the use of financial instruments for speculative purposes. 44 Interest Rate Risk.
If the various financing alternatives were to become limited or unavailable to us, our operations and liquidity could be materially and adversely affected. 44 Market Risk We are exposed primarily to market risks associated with movements in interest rates. Our policies and procedures prohibit the use of financial instruments for speculative purposes. Interest Rate Risk.
Additionally, inflation, higher gasoline prices, the deferral or resumption of student loan payments, increased focus on climate-related initiatives and regulation, declining stock market values, unstable real estate values, resets of adjustable rate mortgages to higher interest rates, increasing unemployment levels, general availability of consumer credit, or other factors that impact consumer confidence or disposable income could increase loss frequency and decrease consumer demand for automobiles as well as weaken collateral values of automobiles.
Additionally, inflation, higher gasoline prices, the deferral or resumption of student loan payments, increased focus on climate-related initiatives and regulation, declining stock market values, unstable real estate values, resets of adjustable rate mortgages to higher interest rates, increasing unemployment levels, general availability of consumer credit, tariffs, or other factors that impact consumer confidence or disposable income could increase loss frequency and decrease consumer demand for automobiles as well as weaken collateral values of automobiles.
Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of this Form 10-K, which is incorporated herein by reference, and the risks and uncertainties discussed elsewhere in this Form 10-K and in our other reports filed or furnished from time to time with the SEC.
Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of this Form 10-K, which is incorporated herein by reference, and the risks and uncertainties discussed elsewhere in this Form 10-K and in our other reports filed or furnished from time to time with the SEC. 45
We currently utilize the following primary forms of debt financing: (1) our revolving secured line of credit facility; (2) Warehouse facilities; (3) Term ABS financings; and (4) senior notes. 34 Consumer Loan Volume The following table summarizes changes in Consumer Loan assignment volume in each of the last three years as compared to the same period in the previous year: Year over Year Percent Change For the Year Ended December 31, Unit Volume Dollar Volume (1) 2022 4.4 % 14.5 % 2023 18.6 % 14.4 % 2024 16.1 % 11.3 % (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.
We currently utilize the following primary forms of debt financing: (1) our revolving secured line of credit facility; (2) Warehouse facilities; (3) Term ABS financings; and (4) senior notes. 34 Consumer Loan Volume The following table summarizes changes in Consumer Loan assignment volume in each of the last three years as compared to the same period in the previous year: Year over Year Percent Change For the Year Ended December 31, Unit Volume Dollar Volume (1) 2023 18.6 % 14.4 % 2024 16.1 % 11.3 % 2025 -12.6 % -16.5 % (1) Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program.
Under the GAAP methodology we employ, which is known as the current expected credit loss model, or CECL, we are required to recognize: • a significant provision for credit losses expense at the time of the Loan’s assignment to us for contractual net cash flows we do not expect to realize; and • finance charge revenue in subsequent periods that is significantly in excess of our expected yields.
Under the GAAP methodology we employ, which is known as the current expected credit loss model, or CECL, we are required to recognize: • a significant provision for credit losses expense at the time of the Loan’s assignment to us for contractual net cash flows we do not expect to realize; and • finance charge revenue in subsequent periods that is significantly in excess of our expected yield.
We periodically adjust our statistical pricing model for new trends that we identify through our evaluation of these forecasted collection rate variances. 40 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.
We periodically adjust our statistical pricing model for new trends that we identify through our evaluation of these forecasted collection rate variances. 40 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.
As of December 31, 2024, we had $300.0 million in floating rate debt outstanding under Term ABS 2022-2, without interest rate protection. For every 100-basis-point increase in interest rates on Term ABS 2022-2, annual after-tax earnings would decrease by approximately $2.3 million, assuming we maintain a level amount of floating rate debt.
As of December 31, 2025, we had $300.0 million in floating rate debt outstanding under Term ABS 2022-2, without interest rate protection. For every 100-basis-point increase in interest rates on Term ABS 2022-2, annual after-tax earnings would decrease by approximately $2.3 million, assuming we maintain a level amount of floating rate debt.
As of December 31, 2024, we had $100.0 million in floating rate debt outstanding under Term ABS 2021-1, without interest rate protection. For every 100-basis-point increase in interest rates on Term ABS 2021-1, annual after-tax earnings would decrease by approximately $0.8 million, assuming we maintain a level amount of floating rate debt.
As of December 31, 2025, we had $100.0 million in floating rate debt outstanding under Term ABS 2021-1, without interest rate protection. For every 100-basis-point increase in interest rates on Term ABS 2021-1, annual after-tax earnings would decrease by approximately $0.8 million, assuming we maintain a level amount of floating rate debt.
For 2020 and prior Consumer Loan assignments, the risk of a material forecast variance is modest, as we have currently realized in excess of 90% of the expected collections. Conversely, the forecasted collection rates for more recent Consumer Loan assignments are less certain as a significant portion of our forecast has not been realized.
For 2021 and prior Consumer Loan assignments, the risk of a material forecast variance is modest, as we have currently realized in excess of 90% of the expected collections. Conversely, the forecasted collection rates for more recent Consumer Loan assignments are less certain as a significant portion of our forecast has not been realized.
Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates. 33 The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate) as of December 31, 2024 for Dealer Loans and Purchased Loans separately.
Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates. 33 The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate) as of December 31, 2025 for Dealer Loans and Purchased Loans separately.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
The following table compares our aggregated forecast of Consumer Loan collection rates as of December 31, 2024, with the aggregated forecasts as of December 31, 2023, as of December 31, 2022, and at the time of assignment, segmented by year of assignment: Forecasted Collection Percentage as of (1) Current Forecast Variance from Consumer Loan Assignment Year December 31, 2024 December 31, 2023 December 31, 2022 Initial Forecast December 31, 2023 December 31, 2022 Initial Forecast 2015 65.3 % 65.2 % 65.2 % 67.7 % 0.1 % 0.1 % -2.4 % 2016 63.9 % 63.8 % 63.8 % 65.4 % 0.1 % 0.1 % -1.5 % 2017 64.7 % 64.7 % 64.7 % 64.0 % 0.0 % 0.0 % 0.7 % 2018 65.5 % 65.5 % 65.2 % 63.6 % 0.0 % 0.3 % 1.9 % 2019 67.2 % 66.9 % 66.6 % 64.0 % 0.3 % 0.6 % 3.2 % 2020 67.7 % 67.6 % 67.8 % 63.4 % 0.1 % -0.1 % 4.3 % 2021 63.8 % 64.5 % 66.2 % 66.3 % -0.7 % -2.4 % -2.5 % 2022 60.2 % 62.7 % 66.3 % 67.5 % -2.5 % -6.1 % -7.3 % 2023 64.3 % 67.4 % — 67.5 % -3.1 % — -3.2 % 2024 66.5 % — — 67.2 % — — -0.7 % (1) Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment.
The following table compares our aggregated forecast of Consumer Loan collection rates as of December 31, 2025, with the aggregated forecasts as of December 31, 2024, as of December 31, 2023, 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 December 31, 2025 December 31, 2024 December 31, 2023 Initial Forecast December 31, 2024 December 31, 2023 Initial Forecast 2016 63.9 % 63.9 % 63.8 % 65.4 % 0.0 % 0.1 % -1.5 % 2017 64.8 % 64.7 % 64.7 % 64.0 % 0.1 % 0.1 % 0.8 % 2018 65.5 % 65.5 % 65.5 % 63.6 % 0.0 % 0.0 % 1.9 % 2019 67.2 % 67.2 % 66.9 % 64.0 % 0.0 % 0.3 % 3.2 % 2020 68.0 % 67.7 % 67.6 % 63.4 % 0.3 % 0.4 % 4.6 % 2021 63.8 % 63.8 % 64.5 % 66.3 % 0.0 % -0.7 % -2.5 % 2022 59.3 % 60.2 % 62.7 % 67.5 % -0.9 % -3.4 % -8.2 % 2023 63.3 % 64.3 % 67.4 % 67.5 % -1.0 % -4.1 % -4.2 % 2024 65.3 % 66.5 % — 67.2 % -1.2 % — -1.9 % 2025 67.2 % — — 67.0 % — — 0.2 % (1) Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment.
The financing has an expected average annualized cost of 6.5% (including upfront fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the underlying Loans.
The financing has an expected average annualized cost of 5.1% (including upfront fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the underlying Loans.
The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate), and the percentage of the forecasted collections that had been realized as of December 31, 2024, as well as forecasted collection rates and spreads at the time of assignment.
The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate), and the percentage of the forecasted collections that had been realized as of December 31, 2025, as well as forecasted collection rates and spreads at the time of assignment.
Dollar volume increased less than unit volume in 2024 due to a decrease in the average advance paid, due to decreases in the average advance rate and the average size of Consumer Loans assigned. Unit volume for 2024 was the highest unit volume in our history.
Dollar volume increased less than unit volume in 2024 due to decreases in the average advance rate and the average size of Consumer Loans assigned, which resulted in a decrease in the average advance paid. Unit volume for 2024 was the highest unit volume in our history.
(2) We have contractual obligations to pay Dealer Holdback to Dealers. Payments of Dealer Holdback are contingent upon the receipt of consumer payments and the repayment of advances. The amounts presented represent our forecast as of December 31, 2024.
(2) We have contractual obligations to pay Dealer Holdback to Dealers. Payments of Dealer Holdback are contingent upon the receipt of consumer payments and the repayment of advances. The amounts presented represent our forecast as of December 31, 2025.
There are various restrictive covenants to which we are subject under each financing arrangement, and we were in compliance with those covenants as of December 31, 2024.
There are various restrictive covenants to which we are subject under each financing arrangement, and we were in compliance with those covenants as of December 31, 2025.
Results of Operations The following is a discussion of our 2024 and 2023 results of operations and income statement data on a consolidated basis, including year-to-year comparisons between 2024 and 2023.
Results of Operations The following is a discussion of our 2025 and 2024 results of operations and income statement data on a consolidated basis, including year-to-year comparisons between 2025 and 2024.
New Accounting Updates Not Yet Adopted See Note 2 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference, for information concerning the following new accounting updates and the impact of the implementation of these updates on our financial statements: • Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative • Improvements to Income Tax Disclosures • Disaggregation of Income Statement Expenses Forward-Looking Statements We make forward-looking statements in this report and may make such statements in future filings with the SEC.
New Accounting Updates Not Yet Adopted See Note 2 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference, for information concerning the following new accounting updates and the impact of the implementation of these updates on our financial statements: • Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative • Disaggregation of Income Statement Expenses • Targeted Improvements to the Accounting for Internal-Use Software Forward-Looking Statements We make forward-looking statements in this report and may make such statements in future filings with the SEC.
The following table compares our forecast of aggregate Consumer Loan collection rates as of December 31, 2024 with the forecasts at the time of assignment, for Dealer Loans and Purchased Loans separately: Dealer Loans Purchased Loans Forecasted Collection Percentage as of (1) Forecasted Collection Percentage as of (1) Consumer Loan Assignment Year December 31, 2024 Initial Forecast Variance December 31, 2024 Initial Forecast Variance 2015 64.6 % 67.5 % -2.9 % 69.0 % 68.5 % 0.5 % 2016 63.1 % 65.1 % -2.0 % 66.1 % 66.5 % -0.4 % 2017 64.1 % 63.8 % 0.3 % 66.3 % 64.6 % 1.7 % 2018 64.9 % 63.6 % 1.3 % 66.8 % 63.5 % 3.3 % 2019 66.8 % 63.9 % 2.9 % 67.9 % 64.2 % 3.7 % 2020 67.5 % 63.3 % 4.2 % 67.9 % 63.6 % 4.3 % 2021 63.5 % 66.3 % -2.8 % 64.3 % 66.3 % -2.0 % 2022 59.5 % 67.3 % -7.8 % 62.1 % 68.0 % -5.9 % 2023 63.1 % 66.8 % -3.7 % 67.7 % 69.4 % -1.7 % 2024 65.4 % 66.3 % -0.9 % 70.7 % 70.7 % 0.0 % (1) The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment.
The following table compares our forecast of aggregate Consumer Loan collection rates as of December 31, 2025 with the forecasts at the time of assignment, for Dealer Loans and Purchased Loans separately: Dealer Loans Purchased Loans Forecasted Collection Percentage as of (1) Forecasted Collection Percentage as of (1) Consumer Loan Assignment Year December 31, 2025 Initial Forecast Variance December 31, 2025 Initial Forecast Variance 2016 63.2 % 65.1 % -1.9 % 66.2 % 66.5 % -0.3 % 2017 64.1 % 63.8 % 0.3 % 66.4 % 64.6 % 1.8 % 2018 64.9 % 63.6 % 1.3 % 66.8 % 63.5 % 3.3 % 2019 66.9 % 63.9 % 3.0 % 67.9 % 64.2 % 3.7 % 2020 67.8 % 63.3 % 4.5 % 68.4 % 63.6 % 4.8 % 2021 63.6 % 66.3 % -2.7 % 64.4 % 66.3 % -1.9 % 2022 58.5 % 67.3 % -8.8 % 61.3 % 68.0 % -6.7 % 2023 62.1 % 66.8 % -4.7 % 66.8 % 69.4 % -2.6 % 2024 64.1 % 66.3 % -2.2 % 69.9 % 70.7 % -0.8 % 2025 65.7 % 65.5 % 0.2 % 71.9 % 71.5 % 0.4 % (1) The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment.
Variances in the pattern of future claims from our current estimates would impact the timing of premiums recognized in future periods. A 10% change in premiums earned for the year ended December 31, 2024 would have affected 2024 consolidated net income by approximately $7.4 million. Contingencies Nature of Estimates Required.
Variances in the pattern of future claims from our current estimates would impact the timing of premiums recognized in future periods. A 10% change in premiums earned for the year ended December 31, 2025 would have affected 2025 consolidated net income by approximately $7.2 million. Contingencies Nature of Estimates Required.
Access to Capital Our strategy for accessing capital on acceptable terms needed to maintain and grow the business is to: (1) maintain consistent financial performance; (2) maintain modest financial leverage; and (3) maintain multiple funding sources. Our funded debt to equity ratio was 3.6 to 1 as of December 31, 2024.
Access to Capital Our strategy for accessing capital on acceptable terms needed to maintain and grow the business is to: (1) maintain consistent financial performance; (2) maintain modest financial leverage; and (3) maintain multiple funding sources. Our funded debt to equity ratio was 4.2 to 1 as of December 31, 2025.
(3) A lease liability of $1.6 million is recognized within accounts payable and accrued liabilities in our consolidated balance sheet as of December 31, 2024. (4) Purchase obligations consist primarily of contractual obligations related to our information system needs.
(3) A lease liability of $2.1 million is recognized within accounts payable and accrued liabilities in our consolidated balance sheet as of December 31, 2025. (4) Purchase obligations consist primarily of contractual obligations related to our information system needs.
Forecasted Collection % as of Spread % as of Consumer Loan Assignment Year December 31, 2024 Initial Forecast Advance % (1) December 31, 2024 Initial Forecast % of Forecast Realized (2) 2015 65.3 % 67.7 % 44.5 % 20.8 % 23.2 % 99.7 % 2016 63.9 % 65.4 % 43.8 % 20.1 % 21.6 % 99.5 % 2017 64.7 % 64.0 % 43.2 % 21.5 % 20.8 % 99.2 % 2018 65.5 % 63.6 % 43.5 % 22.0 % 20.1 % 98.6 % 2019 67.2 % 64.0 % 44.0 % 23.2 % 20.0 % 96.9 % 2020 67.7 % 63.4 % 43.9 % 23.8 % 19.5 % 92.4 % 2021 63.8 % 66.3 % 46.0 % 17.8 % 20.3 % 83.6 % 2022 60.2 % 67.5 % 47.4 % 12.8 % 20.1 % 66.0 % 2023 64.3 % 67.5 % 46.2 % 18.1 % 21.3 % 43.1 % 2024 66.5 % 67.2 % 45.1 % 21.4 % 22.1 % 15.1 % (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 as a percentage of the initial balance of the Consumer Loans.
Forecasted Collection % as of Spread % as of Consumer Loan Assignment Year December 31, 2025 Initial Forecast Advance % (1) December 31, 2025 Initial Forecast % of Forecast Realized (2) 2016 63.9 % 65.4 % 43.8 % 20.1 % 21.6 % 99.7 % 2017 64.8 % 64.0 % 43.2 % 21.6 % 20.8 % 99.6 % 2018 65.5 % 63.6 % 43.5 % 22.0 % 20.1 % 99.3 % 2019 67.2 % 64.0 % 44.0 % 23.2 % 20.0 % 98.6 % 2020 68.0 % 63.4 % 43.9 % 24.1 % 19.5 % 96.9 % 2021 63.8 % 66.3 % 46.0 % 17.8 % 20.3 % 92.5 % 2022 59.3 % 67.5 % 47.4 % 11.9 % 20.1 % 81.7 % 2023 63.3 % 67.5 % 46.2 % 17.1 % 21.3 % 65.3 % 2024 65.3 % 67.2 % 45.1 % 20.2 % 22.1 % 43.5 % 2025 67.2 % 67.0 % 45.0 % 22.2 % 22.0 % 15.2 % (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 as a percentage of the initial balance of the Consumer Loans.
The following table shows the percentage of Consumer Loans assigned to us under each of the programs for each of the last three years: Unit Volume Dollar Volume (1) For the Years Ended December 31, Portfolio Program Purchase Program Portfolio Program Purchase Program 2022 73.5 % 26.5 % 69.8 % 30.2 % 2023 74.0 % 26.0 % 70.7 % 29.3 % 2024 78.7 % 21.3 % 77.5 % 22.5 % (1) Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program.
The following table shows the percentage of Consumer Loans assigned to us under each of the programs for each of the last three years: Unit Volume Dollar Volume (1) For the Years Ended December 31, Portfolio Program Purchase Program Portfolio Program Purchase Program 2023 74.0 % 26.0 % 70.7 % 29.3 % 2024 78.7 % 21.3 % 77.5 % 22.5 % 2025 74.2 % 25.8 % 71.7 % 28.3 % (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.
For the year ended December 31, 2023, forecasted collection rates improved for Consumer Loans assigned in 2018 and 2019, declined for Consumer Loans assigned in 2020 through 2022, and were generally consistent with expectations at the start of the period for all other assignment years presented.
For the year ended December 31, 2025, forecasted collection rates improved for Consumer Loans assigned in 2020 and 2025, declined for Consumer Loans assigned in 2022 through 2024, and were generally consistent with expectations at the start of the period for all other assignment years presented.
Dealer Loans Purchased Loans Consumer Loan Assignment Year Forecasted Collection % (1) Advance % (1)(2) Spread % Forecasted Collection % (1) Advance % (1)(2) Spread % 2015 64.6 % 43.4 % 21.2 % 69.0 % 50.2 % 18.8 % 2016 63.1 % 42.1 % 21.0 % 66.1 % 48.6 % 17.5 % 2017 64.1 % 42.1 % 22.0 % 66.3 % 45.8 % 20.5 % 2018 64.9 % 42.7 % 22.2 % 66.8 % 45.2 % 21.6 % 2019 66.8 % 43.1 % 23.7 % 67.9 % 45.6 % 22.3 % 2020 67.5 % 43.0 % 24.5 % 67.9 % 45.5 % 22.4 % 2021 63.5 % 45.1 % 18.4 % 64.3 % 47.7 % 16.6 % 2022 59.5 % 46.4 % 13.1 % 62.1 % 50.1 % 12.0 % 2023 63.1 % 44.8 % 18.3 % 67.7 % 49.8 % 17.9 % 2024 65.4 % 44.1 % 21.3 % 70.7 % 48.9 % 21.8 % (1) The forecasted collection rates and advance rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment.
Dealer Loans Purchased Loans Consumer Loan Assignment Year Forecasted Collection % (1) Advance % (1)(2) Spread % Forecasted Collection % (1) Advance % (1)(2) Spread % 2016 63.2 % 42.1 % 21.1 % 66.2 % 48.6 % 17.6 % 2017 64.1 % 42.1 % 22.0 % 66.4 % 45.8 % 20.6 % 2018 64.9 % 42.7 % 22.2 % 66.8 % 45.2 % 21.6 % 2019 66.9 % 43.1 % 23.8 % 67.9 % 45.6 % 22.3 % 2020 67.8 % 43.0 % 24.8 % 68.4 % 45.5 % 22.9 % 2021 63.6 % 45.1 % 18.5 % 64.4 % 47.7 % 16.7 % 2022 58.5 % 46.4 % 12.1 % 61.3 % 50.1 % 11.2 % 2023 62.1 % 44.8 % 17.3 % 66.8 % 49.8 % 17.0 % 2024 64.1 % 44.1 % 20.0 % 69.9 % 48.9 % 21.0 % 2025 65.7 % 43.2 % 22.5 % 71.9 % 50.4 % 21.5 % (1) The forecasted collection rates and advance rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment.
Variances in the amount and timing of future net cash flows from current estimates could materially impact earnings in future periods. A 1% decline in the forecasted future net cash flows on Loans as of December 31, 2024 would have reduced 2024 consolidated net income by approximately $59.7 million.
Variances in the amount and timing of future net cash flows from current estimates could materially impact earnings in future periods. A 1% decline in the forecasted future net cash flows on Loans as of December 31, 2025 would have reduced 2025 consolidated net income by approximately $56.4 million.
From time to time, we may manage that risk through the use of derivatives such as interest rate caps. As of December 31, 2024, we had $0.1 million of floating rate debt outstanding under our revolving secured lines of credit, without interest rate protection.
From time to time, we may manage that risk through the use of derivatives such as interest rate caps. As of December 31, 2025, we had $107.3 million of floating rate debt outstanding under our revolving secured lines of credit, without interest rate protection.
The spread with respect to 2022 Consumer Loans has been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented.
The spreads with respect to 2022 and 2023 Consumer Loans have been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented.
Payments of Dealer Holdback and accelerated Dealer Holdback are not included. Consumer Loan assignment volumes depend on a number of factors including (1) the overall demand for our financing programs, (2) the amount of capital available to fund new Loans, and (3) our assessment of the volume that our infrastructure can support.
Payments of Dealer Holdback and accelerated Dealer Holdback are not included. Consumer Loan assignment volumes depend on a number of factors including (1) the overall demand for our financing programs and (2) the amount of capital available to fund new Loans.
However, as of December 31, 2024, there was no floating rate debt outstanding under these facilities. As of December 31, 2024, we did not have a balance outstanding under Warehouse Facility II, Warehouse IV, and Warehouse Facility VI, which do not have interest rate protection.
However, as of December 31, 2025, there was no floating rate debt outstanding under this facility. As of December 31, 2025, we did not have a balance outstanding under Warehouse Facility II, Warehouse Facility IV, Warehouse Facility VI, and Warehouse VIII, which do not have interest rate protection.
Payments of Dealer Holdback and accelerated Dealer Holdback are not included. As of December 31, 2024 and 2023, the net Dealer Loans receivable balance was 72.3% and 67.7%, respectively, of the total net Loans receivable balance.
Payments of Dealer Holdback and accelerated Dealer Holdback are not included. As of December 31, 2025 and 2024, the net Dealer Loans receivable balance was 72.1% and 72.3%, respectively, of the total net Loans receivable balance.
Based on the actual principal amounts outstanding under our revolving secured line of credit facility, our Warehouse facilities, our Term ABS financings, and our senior notes as of December 31, 2024, the forecasted principal amounts outstanding on all other debt, and the actual interest rates in effect as of December 31, 2024, interest is expected to be approximately $397.8 million during 2025; $271.8 million during 2026; and $180.9 million during 2027 and thereafter.
Based on the actual principal amounts outstanding under our revolving secured line of credit facility, our Warehouse facilities, our Term ABS financings, and our senior notes as of December 31, 2025, the forecasted principal amounts outstanding on all other debt, and the actual interest rates in effect as of December 31, 2025, interest is expected to be approximately $350.8 million during 2026; $208.7 million during 2027; and $164.6 million during 2028 and thereafter.
We continue to evaluate the expected collection rate for each Consumer Loan subsequent to assignment. Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast.
We use a statistical model to estimate the expected collection rate for each Consumer Loan at the time of assignment. We continue to evaluate the expected collection rate for each Consumer Loan subsequent to assignment. Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast.
For every 100-basis-point increase in interest rates on our revolving secured lines of credit, annual after-tax earnings would decrease by a negligible amount, assuming we maintain a level amount of floating rate debt. As of December 31, 2024, we had interest rate cap agreements outstanding to manage the interest rate risk on Warehouse Facility V and Warehouse Facility VIII.
For every 100-basis-point increase in interest rates on our revolving secured lines of credit, annual after-tax earnings would decrease by approximately $0.8 million, assuming we maintain a level amount of floating rate debt. As of December 31, 2025, we had an interest rate cap agreement outstanding to manage the interest rate risk on Warehouse Facility V.
The higher spread for 2024 Consumer Loans relative to 2023 Consumer Loans as of December 31, 2024 was primarily a result of Consumer Loan performance, as the performance of 2023 Consumer Loans has been lower than our initial estimates by a greater margin than 2024 Consumer Loans.
The higher spread for 2025 Consumer Loans relative to 2024 Consumer Loans as of December 31, 2025 was primarily a result of Consumer Loan performance, as the performance of 2025 Consumer Loans has exceeded our initial estimates while the performance of 2024 Consumer Loans has been lower than our initial estimates.
On March 28, 2024, we completed a $500.0 million Term ABS financing, which was used to repay outstanding indebtedness and for general corporate purposes.
On March 27, 2025, we completed a $400.0 million Term ABS financing, which was used to repay outstanding indebtedness and for general corporate purposes.
Our pricing strategy is intended to maximize the amount of economic profit we generate, within the confines of capital and infrastructure constraints. During 2024, unit and dollar volumes increased 16.1% and 11.3%, respectively, as the number of active Dealers increased 9.1% while average volume per active Dealer increased 6.4%.
Our pricing strategy is intended to maximize the amount of economic profit we generate, within the confines of capital constraints. During 2025, unit and dollar volumes declined 12.6% and 16.5%, respectively, as the number of active Dealers increased 1.8% while average unit volume per active Dealer declined 14.4%.
We had experienced a decrease in Consumer Loan prepayments to below-average levels and, as a result, slowed our forecasted net cash flow timing. The below-average levels of Consumer Loan prepayments continued through the fourth quarter of 2023. Historically, Consumer Loan prepayments have been lower in periods with less availability of consumer credit.
We had experienced a decrease in Consumer Loan prepayments to below-average levels and, as a result, slowed our forecasted net cash flow timing. The below-average levels of Consumer Loan prepayments continued through the fourth quarter of 2023.
The increase of $237.3 million, or 13.5%, was primarily due to an increase in the average net Loans receivable balance, as follows: (Dollars in millions) For the Years Ended December 31, 2024 2023 Change Average net Loans receivable balance $ 7,530.7 $ 6,627.8 $ 902.9 Average yield on our Loan portfolio 26.5 % 26.5 % — % 37 The following table summarizes the impact each component had on the overall increase in finance charges for the year ended December 31, 2024: (In millions) Impact on finance charges: For the Year Ended December 31, 2024 Due to an increase in the average net Loans receivable balance $ 239.1 Due to a decrease in the average yield (1.8) Total increase in finance charges $ 237.3 The increase in the average net Loans receivable balance was primarily due to the dollar volume of new Consumer Loan assignments exceeding the principal collected on Loans receivable.
The increase of $149.1 million, or 7.5%, was the result of increases in the average net Loans receivable balance and the average yield on our Loan portfolio, as follows: (Dollars in millions) For the Years Ended December 31, 2025 2024 Change Average net Loans receivable balance $ 7,956.3 $ 7,530.7 $ 425.6 Average yield on our Loan portfolio 26.9 % 26.5 % 0.4 % 37 The following table summarizes the impact each component had on the overall increase in finance charges for the year ended December 31, 2025: (In millions) Impact on finance charges: For the Year Ended December 31, 2025 Due to an increase in the average net Loans receivable balance $ 112.6 Due to an increase in the average yield 36.5 Total increase in finance charges $ 149.1 The increase in the average net Loans receivable balance was primarily due to the dollar volume of new Consumer Loan assignments exceeding the principal collected on Loans receivable.
Provision for Credit Losses . The increase of $78.5 million, or 10.7%, was primarily due to an increase in provision for credit losses on forecast changes. We recognize provision for credit losses on new Consumer Loan assignments for contractual net cash flows that are not expected to be realized at the time of assignment.
Provision for Credit Losses . The decrease of $198.6 million, or 24.4%, was primarily due to a decrease in provision for credit losses on forecast changes. We recognize provision for credit losses on new Consumer Loan assignments for contractual net cash flows that are not expected to be realized at the time of assignment.
Although the advance rate on Purchased Loans is higher as compared to the advance rate on Dealer Loans, Purchased Loans do not require us to pay Dealer Holdback. The spread as of December 31, 2024 on 2024 Dealer Loans was 21.3%, as compared to a spread of 18.3% on 2023 Dealer Loans.
Although the advance rate on Purchased Loans is higher as compared to the advance rate on Dealer Loans, Purchased Loans do not require us to pay Dealer Holdback. The spread as of December 31, 2025 on 2025 Dealer Loans was 22.5%, as compared to a spread of 20.0% on 2024 Dealer Loans.
The interest rate on borrowings under the facility has been decreased from SOFR plus 245 basis points to SOFR plus 185 basis points. On December 20, 2024, we completed a $300.0 million Term ABS financing, which was used to repay outstanding indebtedness and for general corporate purposes.
The interest rate on borrowings under the facility was decreased from SOFR plus 225 basis points to SOFR plus 185 basis points. On November 13, 2025, we completed a $500.0 million Term ABS financing, which was used to repay outstanding indebtedness and for general corporate purposes.
During 2024, we decreased our estimate of future net cash flows by $314.0 million, or 3.1%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect a decrease in Consumer Loan prepayments, which remain below historical averages.
During 2025, we decreased our estimate of future net cash flows by $169.5 million, or 1.5%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages.
The following table presents the change in interest expense, average outstanding debt balance, and average cost of debt for the year ended December 31, 2024 as compared to the year ended December 31, 2023: (Dollars in millions) For the Years Ended December 31, 2024 2023 Change Interest expense $ 419.5 $ 266.5 $ 153.0 Average outstanding debt balance 5,849.7 4,785.7 1,064.0 Average cost of debt 7.2 % 5.5 % 1.7 % Loss on Sale of Building.
The following table presents the change in interest expense, average outstanding debt balance, and average cost of debt for the year ended December 31, 2025 as compared to the year ended December 31, 2024: (Dollars in millions) For the Years Ended December 31, 2025 2024 Change Interest expense $ 462.9 $ 419.5 $ 43.4 Average outstanding debt balance 6,448.9 5,849.7 599.2 Average cost of debt 7.2 % 7.2 % — % Loss on Sale of Building.
The spread between the forecasted collection rate as of December 31, 2024 and the advance rate ranges from 12.8% to 23.8% for Consumer Loans assigned over the last 10 years.
The spread between the forecasted collection rate as of December 31, 2025 and the advance rate ranges from 11.9% to 24.1% for Consumer Loans assigned over the last 10 years.
Based on the amount and timing of these forecasts and expected expense levels, an advance or one-time purchase payment is made to the related Dealer at a price designed to maximize economic profit. We use a statistical model to estimate the expected collection rate for each Consumer Loan at the time of assignment.
Consumer Loan Metrics At the time a Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan. Based on the amount and timing of these forecasts and expected expense levels, an advance or one-time purchase payment is made to the related Dealer at a price designed to maximize economic profit.
The following table summarizes the changes in Consumer Loan unit volume and active Dealers: For the Years Ended December 31, For the Years Ended December 31, 2024 2023 % Change 2023 2022 % Change Consumer Loan unit volume 386,126 332,499 16.1 % 332,499 280,467 18.6 % Active Dealers (1) 15,463 14,174 9.1 % 14,174 11,901 19.1 % Average volume per active Dealer 25.0 23.5 6.4 % 23.5 23.6 -0.4 % Consumer Loan unit volume from Dealers active both periods 339,361 304,779 11.3 % 282,008 259,999 8.5 % Dealers active both periods 10,637 10,637 — 9,506 9,506 — Average volume per Dealer active both periods 31.9 28.7 11.3 % 29.7 27.4 8.5 % Consumer Loan unit volume from Dealers not active both periods 46,765 27,720 68.7 % 50,491 20,468 146.7 % Dealers not active both periods 4,826 3,537 36.4 % 4,668 2,395 94.9 % Average volume per Dealer not active both periods 9.7 7.8 24.4 % 10.8 8.5 27.1 % (1) Active Dealers are Dealers who have received funding for at least one Consumer Loan during the period. 35 The following table provides additional information on the changes in Consumer Loan unit volume and active Dealers: For the Years Ended December 31, For the Years Ended December 31, 2024 2023 % Change 2023 2022 % Change Consumer Loan unit volume from new active Dealers 43,985 46,741 -5.9 % 46,741 28,223 65.6 % New active Dealers (1) 4,330 4,070 6.4 % 4,070 2,819 44.4 % Average volume per new active Dealer 10.2 11.5 -11.3 % 11.5 10.0 15.0 % Attrition (2) -8.3 % -7.3 % -7.3 % -6.9 % (1) New active Dealers are Dealers who enrolled in our program and have received funding for their first Loan from us during the period.
The following table summarizes the changes in Consumer Loan unit volume and active Dealers: For the Years Ended December 31, For the Years Ended December 31, 2025 2024 % Change 2024 2023 % Change Consumer Loan unit volume 337,411 386,126 -12.6 % 386,126 332,499 16.1 % Active Dealers (1) 15,745 15,463 1.8 % 15,463 14,174 9.1 % Average volume per active Dealer 21.4 25.0 -14.4 % 25.0 23.5 6.4 % Consumer Loan unit volume from Dealers active both periods 300,460 350,638 -14.3 % 339,361 304,779 11.3 % Dealers active both periods 10,938 10,938 — 10,637 10,637 — Average volume per Dealer active both periods 27.5 32.1 -14.3 % 31.9 28.7 11.3 % Consumer Loan unit volume from Dealers not active both periods 36,951 35,488 4.1 % 46,765 27,720 68.7 % Dealers not active both periods 4,807 4,525 6.2 % 4,826 3,537 36.4 % Average volume per Dealer not active both periods 7.7 7.8 -1.3 % 9.7 7.8 24.4 % (1) Active Dealers are Dealers who have received funding for at least one Consumer Loan during the period. 35 The following table provides additional information on the changes in Consumer Loan unit volume and active Dealers: For the Years Ended December 31, For the Years Ended December 31, 2025 2024 % Change 2024 2023 % Change Consumer Loan unit volume from new active Dealers 35,018 43,985 -20.4 % 43,985 46,741 -5.9 % New active Dealers (1) 4,285 4,330 -1.0 % 4,330 4,070 6.4 % Average volume per new active Dealer 8.2 10.2 -19.6 % 10.2 11.5 -11.3 % Attrition (2) -9.2 % -8.3 % -8.3 % -7.3 % (1) New active Dealers are Dealers who enrolled in our program and have received funding for their first Loan from us during the period.
A summary as of December 31, 2024 of our material financial obligations requiring future repayments is as follows: (In millions) Payments Due as of December 31, 2024 In less than 12 months In 12 months or more Total Long-term debt, including current maturities (1) $ 1,249.6 $ 5,142.3 $ 6,391.9 Dealer Holdback (2) 139.5 450.5 590.0 Operating lease obligations (3) 1.0 0.7 1.7 Purchase obligations (4) 2.4 14.8 17.2 Total financial obligations $ 1,392.5 $ 5,608.3 $ 7,000.8 (1) The amounts presented consist solely of principal and do not reflect deferred debt issuance costs of $37.7 million and unamortized debt discount of $1.3 million.
A summary as of December 31, 2025 of our material financial obligations requiring future repayments is as follows: (In millions) Payments Due as of December 31, 2025 In less than 12 months In 12 months or more Total Long-term debt, including current maturities (1) $ 2,181.4 $ 4,206.5 $ 6,387.9 Dealer Holdback (2) 88.2 493.7 581.9 Operating lease obligations (3) 1.3 1.2 2.5 Purchase obligations (4) 5.2 18.7 23.9 Total financial obligations $ 2,276.1 $ 4,720.1 $ 6,996.2 (1) The amounts presented consist solely of principal and do not reflect deferred debt issuance costs of $33.9 million and unamortized debt discount of $0.1 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.
Consumer Loans assigned in 2023 had also begun exhibiting similar trends of underperformance, although not as severe as Consumer Loans assigned in 2022.
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.
Consumer Loans assigned in 2023 had also begun exhibiting similar trends of underperformance, although not as severe as Consumer Loans assigned in 2022.
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.
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.
During periods of economic slowdown or recession, delinquencies, defaults, repossessions, and losses may increase on our Consumer Loans, and Consumer Loan prepayments may decline.
During periods of economic slowdown or recession, delinquencies, defaults, repossessions, and losses may increase on our Consumer Loans, and Consumer Loan prepayments, which historically have been lower in periods with less availability of consumer credit, may decline.
Our provision for credit losses for the year ended December 31, 2023, included: • $322.5 million provision for credit losses on new Consumer Loan assignments, which reduced consolidated net income by $248.3 million, or $19.08 per diluted share; and • $413.7 million provision for credit losses on forecast changes related to changes in the amount and timing of expected future net cash flows, which reduced consolidated net income by $318.5 million, or $24.48 per diluted share. 41 Key Factors.
Our provision for credit losses for the year ended December 31, 2024, included: • $320.9 million provision for credit losses on new Consumer Loan assignments, which reduced consolidated net income by $247.1 million, or $19.82 per diluted share; and • $493.8 million provision for credit losses on forecast changes related to changes in the amount and timing of expected future net cash flows, which reduced consolidated net income by $380.2 million, or $30.49 per diluted share. 41 Key Factors.
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. 38 During 2023, we decreased our estimate of future net cash flows by $206.3 million, or 2.3%, to reflect a decline in Consumer Loan prepayments to below-average levels.
Accordingly, during 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. 38 During 2024, we decreased our estimate of future net cash flows by $314.0 million, or 3.1%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect a decrease in Consumer Loan prepayments, which remained below historical averages.
For the year ended December 31, 2024, the effective income tax rate increased to 24.8% from 22.2% for the year ended December 31, 2023.
For the year ended December 31, 2025, the effective income tax rate increased to 25.0% from 24.8% as compared with the year ended December 31, 2024.
The following table summarizes the provision for credit losses for each of these components: (In millions) For the Years Ended December 31, Provision for Credit Losses 2024 2023 Change Forecast changes $ 493.8 $ 413.7 $ 80.1 New Consumer Loan assignments 320.9 322.5 (1.6) Total $ 814.7 $ 736.2 $ 78.5 The increase in provision for credit losses related to forecast changes was due to a greater decline in Consumer Loan performance during 2024 compared to 2023 and slower net cash flow timing during 2024 compared to 2023.
The following table summarizes the provision for credit losses for each of these components: (In millions) For the Years Ended December 31, Provision for Credit Losses 2025 2024 Change Forecast changes $ 338.3 $ 493.8 $ (155.5) New Consumer Loan assignments 277.8 320.9 (43.1) Total $ 616.1 $ 814.7 $ (198.6) The decrease in provision for credit losses related to forecast changes was primarily due to a smaller decline in Consumer Loan performance during 2025 compared to 2024.
The financing has an expected average annualized cost of 6.4% (including upfront fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the underlying Loans.
The financing has an expected average annualized cost of 5.6% (including upfront fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the underlying Loans. 43 On June 24, 2025, we extended the maturity of our revolving secured line of credit facility from June 22, 2027 to June 22, 2028.
Economic profit measures how efficiently we utilize our total capital, both debt and equity, and is a function of the return on capital in excess of the cost of capital and the amount of capital invested in the business. 29 Consumer Loan Metrics At the time a Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan.
Economic profit measures how efficiently we utilize our total capital, both debt and equity, and is a function of the return on capital in excess of the cost of capital and the amount of capital invested in the business.
For additional information, see Note 2 and Note 5 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference. 36 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 (Dollars in millions, except per share data) For the Years Ended December 31, 2024 2023 $ Change % Change Revenue: Finance charges $ 1,992.7 $ 1,755.4 $ 237.3 13.5 % Premiums earned 96.1 79.6 16.5 20.7 % Other income 73.6 66.9 6.7 10.0 % Total revenue 2,162.4 1,901.9 260.5 13.7 % Costs and expenses: Salaries and wages 309.2 280.2 29.0 10.3 % General and administrative 97.9 87.2 10.7 12.3 % Sales and marketing 94.4 91.7 2.7 2.9 % Total operating expenses 501.5 459.1 42.4 9.2 % Provision for credit losses on forecast changes 493.8 413.7 80.1 19.4 % Provision for credit losses on new Consumer Loan assignments 320.9 322.5 (1.6) -0.5 % Total provision for credit losses 814.7 736.2 78.5 10.7 % Interest 419.5 266.5 153.0 57.4 % Provision for claims 73.5 70.7 2.8 4.0 % Loss on extinguishment of debt — 1.8 (1.8) -100.0 % Loss on sale of building 23.7 — 23.7 — % Total costs and expenses 1,832.9 1,534.3 298.6 19.5 % Income before provision for income taxes 329.5 367.6 (38.1) -10.4 % Provision for income taxes 81.6 81.5 0.1 0.1 % Net income $ 247.9 $ 286.1 $ (38.2) -13.4 % Net income per share: Basic $ 20.12 $ 22.09 $ (1.97) -8.9 % Diluted $ 19.88 $ 21.99 $ (2.11) -9.6 % Weighted average shares outstanding: Basic 12,323,261 12,953,424 (630,163) -4.9 % Diluted 12,469,283 13,010,735 (541,452) -4.2 % Finance Charges.
For additional information, see Note 2 and Note 5 to the consolidated financial statements contained in Item 8 of this Form 10-K, which is incorporated herein by reference. 36 Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 (Dollars in millions, except per share data) For the Years Ended December 31, 2025 2024 $ Change % Change Revenue: Finance charges $ 2,141.8 $ 1,992.7 $ 149.1 7.5 % Premiums earned 95.6 96.1 (0.5) -0.5 % Other income 79.8 73.6 6.2 8.4 % Total revenue 2,317.2 2,162.4 154.8 7.2 % Costs and expenses: Salaries and wages 337.1 309.2 27.9 9.0 % General and administrative 161.4 97.9 63.5 64.9 % Sales and marketing 101.4 94.4 7.0 7.4 % Total operating expenses 599.9 501.5 98.4 19.6 % Provision for credit losses on forecast changes 338.3 493.8 (155.5) -31.5 % Provision for credit losses on new Consumer Loan assignments 277.8 320.9 (43.1) -13.4 % Total provision for credit losses 616.1 814.7 (198.6) -24.4 % Interest 462.9 419.5 43.4 10.3 % Provision for claims 71.7 73.5 (1.8) -2.4 % Loss on extinguishment of debt 1.2 — 1.2 — % Loss on sale of building — 23.7 (23.7) -100.0 % Total costs and expenses 1,751.8 1,832.9 (81.1) -4.4 % Income before provision for income taxes 565.4 329.5 235.9 71.6 % Provision for income taxes 141.5 81.6 59.9 73.4 % Net income $ 423.9 $ 247.9 $ 176.0 71.0 % Net income per share: Basic $ 37.02 $ 20.12 $ 16.90 84.0 % Diluted $ 36.38 $ 19.88 $ 16.50 83.0 % Weighted average shares outstanding: Basic 11,451,578 12,323,261 (871,683) -7.1 % Diluted 11,650,773 12,469,283 (818,510) -6.6 % Finance Charges.
The changes in forecasted collection rates impacted forecasted net cash flows (forecasted collections less forecasted Dealer Holdback payments) as follows: (In millions) For the Years Ended December 31, Decrease in Forecasted Net Cash Flows 2024 2023 2022 Dealer Loans $ (204.6) $ (125.3) $ (41.6) Purchased Loans (109.4) (81.0) (18.1) Total $ (314.0) $ (206.3) $ (59.7) % change from forecast at beginning of period -3.1 % -2.3 % -0.7 % 30 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 the year ended December 31, 2024, forecasted collection rates improved for Consumer Loans assigned in 2019, declined for Consumer Loans assigned in 2021 through 2024, and were generally consistent with expectations at the start of the period for all other assignment years presented. 30 The changes to our forecast of future net cash flows from our Loan portfolio (forecasted collections less forecasted Dealer Holdback payments) are shown in the following table: (Dollars in millions) Decrease in Forecasted Net Cash Flows For the Years Ended December 31, Total Loans % Change from Forecast at Beginning of Period 2023 $ (206.3) -2.3 % 2024 (314.0) -3.1 % 2025 (169.5) -1.5 % The decreases in forecasted net cash flows for the years ended December 31, 2025, 2024, and 2023, were composed of ordinary decreases in forecasted net cash flows and the following adjustments applied to our forecasting methodology: 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.
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.
We had experienced a decrease in Consumer Loan prepayments to below-average levels and, as a result, slowed our forecasted net cash flow timing. 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 $206.3 million decrease in forecasted net cash flows during 2023 was composed of an ordinary decrease in forecasted net cash flows of $161.8 million, or 1.8%, and an adjustment to our forecasting methodology during the second quarter of 2023, which, upon implementation, decreased our estimate of future net cash flows by $44.5 million, or 0.5%, and increased our provision for credit losses by $71.3 million.
The $169.5 million decrease in forecasted net cash flows for the year ended December 31, 2025 was composed of an ordinary decrease in forecasted net cash flows of $150.9 million, or 1.3%, and an adjustment applied to our forecasting methodology, which upon implementation, reduced forecasted net cash flows by $18.6 million, or 0.2%, and increased our provision for credit losses by $16.5 million.
The decrease in consolidated net income was primarily due to increases in provision for credit losses and interest expense.
The increase in consolidated net income was primarily due to a decrease in provision for credit losses and an increase in finance charges, partially offset by an increase in operating expenses.
The increase of $42.4 million, or 9.2%, was primarily due to: • An increase in salaries and wages expense of $29.0 million, or 10.3%, primarily due to increases in (i) the number of team members as we are investing in our business with the goal of increasing the speed at which we enhance our product for Dealers and consumers, (ii) fringe benefits, primarily due to higher medical claims, and (iii) stock-based compensation expense, primarily due to equity awards granted to our executive officers and senior leaders. ▪ An increase in general and administrative expense of $10.7 million, or 12.3%, primarily due to increases in legal and technology systems expenses.
The cumulative amount reflects, among other things, preliminary alignment between us and representatives of the agencies involved in the previously disclosed multi-state and New York Attorney General legal matters on certain material terms of a potential settlement of those legal matters, including a potential cash payment by us of $75.5 million. • An increase in salaries and wages expense of $27.9 million, or 9.0%, primarily due to increases in (i) the number of team members in Engineering as we are investing in our business with the goal of increasing the speed at which we enhance our product for Dealers and consumers, (ii) stock-based compensation expense, primarily due to equity awards granted to our executive officers and senior leaders, and (iii) fringe benefits, primarily due to higher medical claims.
The increase was primarily due to Consumer Loan performance, as the performance of 2023 Dealer Loans has been lower than our initial estimates by a greater margin than 2024 Dealer Loans. The spread as of December 31, 2024 on 2024 Purchased Loans was 21.8%, as compared to a spread of 17.9% on 2023 Purchased Loans.
The increase was primarily a result of Consumer Loan performance, as the performance of 2025 Dealer Loans has exceeded our initial estimates while the performance of 2024 Dealer Loans has been lower than our initial estimates.
The interest rate on borrowings under the facility has been decreased from SOFR plus 230 basis points to SOFR plus 185 basis points. 43 On September 19, 2024, we extended the date on which the $500.0 million Term ABS 2019-2 financing will cease to revolve from August 15, 2025 to September 15, 2026 and increased the interest rate under the financing from 5.15% to 5.43%.
The interest rate on borrowings under the facility was decreased from the Secured Overnight Financing Rate plus 221.4 basis points to SOFR plus 205 basis points. On September 19, 2025, we extended the date on which our $200.0 million Warehouse Facility VIII will cease to revolve from September 21, 2026 to September 19, 2028.
The decrease in provision for credit losses related to new Consumer Loan assignments was due to a 14.3% decrease in the average provision per new Consumer Loan assignment, partially offset by a 16.1% increase in Consumer Loan assignment unit volume.
The decrease in provision for credit losses related to new Consumer Loan assignments was primarily due to a 12.6% decrease in Consumer Loan assignment unit volume. Interest. The increase in interest expense of $43.4 million, or 10.3%, was primarily due to an increase in our average outstanding debt balance.
Under CECL, changes in the amount and timing of forecasted net cash flows are recorded as a provision for credit losses in the period of change.
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.
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) Our provision for credit losses for the year ended December 31, 2024, included: • $320.9 million provision for credit losses on new Consumer Loan assignments, which reduced consolidated net income by $247.1 million, or $19.82 per diluted share; and • $493.8 million provision for credit losses on forecast changes related to changes in the amount and timing of expected future net cash flows, which reduced consolidated net income by $380.2 million, or $30.49 per diluted share.
Our provision for credit losses for the year ended December 31, 2025, included: • $277.8 million provision for credit losses on new Consumer Loan assignments, which reduced consolidated net income by $208.4 million, or $17.89 per diluted share; and • $338.3 million provision for credit losses on forecast changes related to changes in the amount and timing of expected future net cash flows, which reduced consolidated net income by $253.7 million, or $21.78 per diluted share.
Critical Success Factors Critical success factors include our ability to accurately forecast Consumer Loan performance, access capital on acceptable terms, and maintain or grow Consumer Loan volume at the level and on the terms that we anticipate, with the objective to maximize economic profit over the long term.
The building was sold to reduce excess office space and eliminate the associated annual operating costs of approximately $2.1 million. • 13 workplace awards, including reaching #39 on Great Place to Work ® and Fortune magazine's 100 Best Companies to Work For ® list and #9 on the 2024 Top Workplaces USA list in the 1,000-2,499 employee company size category. 29 Critical Success Factors Critical success factors include our ability to accurately forecast Consumer Loan performance, access capital on acceptable terms, and maintain or grow Consumer Loan volume at the level and on the terms that we anticipate, with the objective to maximize economic profit over the long term.
The increase was primarily a result of a higher initial spread on 2024 Purchased Loans, due to a higher initial forecast and lower advance rate. Additionally, the performance of 2023 Purchased Loans has been lower than our initial estimates.
This impact of Consumer Loan performance was partially offset by the impact of a lower initial spread on 2025 Purchased Loans, due to the advance rate increasing by a greater margin than the initial forecast in our Purchased Loan portfolio.
The increase was primarily due to: • A decrease in the impact of excess tax benefits on our effective income tax rate, primarily due to the timing of long-term stock award grants. • An increase in non-deductible executive compensation expense. • An increase in the impact of state and local income taxes on our effective income tax rate, primarily due to an adjustment to an uncertain tax position estimate during the second quarter of 2024 and changes in state tax laws that were enacted during the second quarter of 2024.
The increase was primarily due to an increase in state income taxes due to a revision of deferred tax estimates during 2025 and a reduction in excess tax benefits due to an increase in pre-tax income in 2025, partially offset by a decrease in non-deductible executive compensation expense.

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