Credit Acceptance Increases Revenue, Adds Dealers
Subprime lender Credit Acceptance Corp. reported year-over-year improvements in net income and revenue for the first quarter of 2010. The company also added several new dealer partners and reported gains in loan volume and average loan volume per dealer.
SOUTHFIELD, Mich. — Subprime lender Credit Acceptance Corp. reported year-over-year improvements in net income and revenue for the first quarter of 2010. The company also added several new dealer partners and reported gains in loan volume and average loan volume per dealer.
Credit Acceptance CEO Brett Roberts said the favorable performance was the result of several factors, including pricing changes.
"Dollar and unit volume increased during the first quarter of 2010 ... due to pricing changes implemented during the last four months of 2009 and the first quarter of 2010 that reduced per unit profitability in exchange for increased unit volume," Roberts said.
The result was an 11.2 percent increase in loan volume, made possible in part by the 216 new dealer partners who signed on with Credit Acceptance between January and March. The lender now counts 2,346 active dealer partners on its roster, each of whom booked an average of 16.6 new loans during the period.
The effects of the 2008 credit crisis were made clear in an overview of loan performance over the past 10 years. Credit Acceptance forecasts a collection percentage of 76.4 percent for 2009 originations and 69.8 percent for contracts purchased in 2008; both are improvements upon the firm’s initial forecasts. Pre-2008 vintages, however, are not expected to perform as well — for instance, the company predicts a collection percentage of 68.1 percent for loans booked in 2007, more than two points lower than its initial forecast.
Credit Acceptance also reported year-over-year improvements in consolidated net income, adjusted net income and total revenue. Roberts indicated that careful planning and further adjustment will give the company a chance to further improve its financial performance.
"We will continue to monitor unit volumes and will make additional pricing changes," he said. "Future growth rates will partially depend on how unit volumes respond to pricing changes, which will be influenced, to a large degree, by how quickly competition returns to our market."
More Auto Finance
July Was Hot for Auto Borrowers
Credit proved readily available for many, but most loans left buyers in negative territory, Cox Automotive said.
Read More →
Dealer Lender Preferences Revealed
When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.
Read More →
Auto Refi Savings Surge
Consumers with 84-month auto loan terms who refinanced saved the most on monthly payments, according to a new report by auto refinancing provider Caribou.
Read More →
Subaru Enters Lending Business
The automaker follows other brands in adding captive financing in the U.S., and says the move will strengthen its position here.
Read More →
Positive Equity Reaches Record High
Mainstream vehicle owners who bought a car seven years ago are likely to have positive equity when trading in for a new vehicle, according to second-quarter Edmunds data.
Read More →
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Auto Credit Plentiful
June numbers show lenders are readily granting access, including to risky borrowers, as consumers leverage themselves to take on high prices.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →