Credit Acceptance
| Company type | Public |
|---|---|
| Template:NASDAQ Russell 1000 Component | |
| Industry | Financial |
| Founded | 1972 |
| Founder | Donald Foss |
| Headquarters | Southfield, Michigan, United States |
Key people | Kenneth S. Booth (CEO) |
| Services | Credit Services |
| IncreaseUS$857.5 million (2019) | |
| Increase US$656.1 million (2019) | |
| Total assets | Increase US$7.42 billion (2019) |
| Website | creditacceptance |
Credit Acceptance Corporation is a finance firm specializing in automotive lending and related credit solutions. The company collaborates with a nationwide network of automobile dealers through two distinct initiatives: the "Portfolio Program" and the "Purchase Program." These programs enable Credit Acceptance to provide funds to car dealers either by acquiring servicing rights or by outright purchasing consumer loans. In 2019, the company generated revenues totaling $1.49 billion.
History
Established in 1972 by Donald Foss, a prominent figure in the used vehicle market, Credit Acceptance transitioned to a publicly traded entity in 1992, listing on the Nasdaq exchange under the symbol "CACC."
Criticism
In December 2019, NPR featured Credit Acceptance in a report addressing the subprime auto lending sector, drawing parallels between its business model and practices linked to previous financial crises.
Short-seller Aaron Greenspan characterized the firm as merging sophisticated financial strategies with a contentious area within the automobile industry.
The company has been subject to investigations by regulatory bodies such as the United States Department of Justice and the Federal Trade Commission regarding its subprime lending operations. Approximately 35% of vehicles financed by Credit Acceptance are repossessed.
Concerns have been raised about the transparency of Credit Acceptance’s accounting practices. The Wall Street Journal noted that its application of "level yield accounting" complicates the clear assessment of loan performance metrics, including rates of delinquency and default.