Business Description
Since 1972, Credit Acceptance Corporation has offered automobile dealers financing
programs that enable them to sell vehicles to consumers, regardless of their
credit history. Our financing programs are offered through a nationwide network
of automobile dealers who benefit from sales of vehicles to consumers who otherwise
could not obtain financing; from repeat and referral sales generated by these
same customers; and from sales to customers responding to advertisements for
our product, but who actually end up qualifying for traditional financing.
Credit Acceptance was founded to collect retail installment contracts (referred
to as “Consumer Loans”) originated by automobile dealerships owned
by Donald Foss, our Chairman, founder, and significant shareholder. During the
1980s, we began to market this service to non-affiliated dealers and, at the
same time, began to offer dealers a non-recourse cash payment (referred to as
an “advance”) against anticipated future collections on Consumer
Loans serviced for that dealer.
We refer to automobile dealers who participate in our programs and who share
our commitment to changing consumers’ lives as “Dealers”.
Upon enrollment in our financing programs, the Dealer enters into a Dealer servicing
agreement with us that defines the legal relationship between Credit Acceptance
and the Dealer. The Dealer servicing agreement assigns the responsibilities
for administering, servicing, and collecting the amounts due on Consumer Loans
from the Dealers to us. We are an indirect lender from a legal perspective,
meaning the Consumer Loan is originated by the Dealer and assigned to us.
Consumers. We help change the lives of consumers who do not qualify for conventional
automobile financing by helping them obtain quality transportation. Without
our financing programs, consumers are often unable to purchase a vehicle or
they purchase an unreliable one. Further, as we report to the three national
credit reporting agencies, an important ancillary benefit of our programs is
that we provide our consumers with an opportunity to improve their lives by
improving their credit score and move on to more traditional sources of financing.
Dealers. Our programs increase Dealers’ profits in the following ways:
Enables Dealers to sell cars to consumers who may not be able to obtain financing
without our programs. In addition, consumers often become repeat customers,
returning to buy cars from the same Dealer over the years.
Allows Dealers to share in the profit, not only from the sale of the vehicle,
but also from its financing.
Enables Dealers to attract consumers who mistakenly assume they do not qualify
for conventional financing.
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