Michigan | 000-20202 | 38-1999511 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
25505 West Twelve Mile Road | ||||
Southfield, Michigan | 48034-8339 | |||
(Address of principal executive offices) | (Zip Code) |
Not Applicable | ||
Former name or former address, if changed since last report |
CREDIT ACCEPTANCE CORPORATION | |||
Date: October 7, 2014 | By: | /s/ Douglas W. Busk | |
Douglas W. Busk | |||
Senior Vice President and Treasurer | |||
Exhibit No. | Description | |||
99.1 | Press Release dated October 7, 2014. |
Forecasted Collection Percentage as of | Variance in Forecasted Collection Percentage from | ||||||||||||||||||||
Consumer Loan Assignment Year | August 31, 2014 | June 30, 2014 | December 31, 2013 | Initial Forecast | June 30, 2014 | December 31, 2013 | Initial Forecast | ||||||||||||||
2005 | 73.7 | % | 73.7 | % | 73.7 | % | 74.0 | % | 0.0 | % | 0.0 | % | -0.3 | % | |||||||
2006 | 70.0 | % | 70.0 | % | 70.0 | % | 71.4 | % | 0.0 | % | 0.0 | % | -1.4 | % | |||||||
2007 | 68.0 | % | 68.0 | % | 67.9 | % | 70.7 | % | 0.0 | % | 0.1 | % | -2.7 | % | |||||||
2008 | 70.3 | % | 70.3 | % | 70.1 | % | 69.7 | % | 0.0 | % | 0.2 | % | 0.6 | % | |||||||
2009 | 79.4 | % | 79.3 | % | 79.2 | % | 71.9 | % | 0.1 | % | 0.2 | % | 7.5 | % | |||||||
2010 | 77.2 | % | 77.2 | % | 77.0 | % | 73.6 | % | 0.0 | % | 0.2 | % | 3.6 | % | |||||||
2011 | 74.0 | % | 74.1 | % | 74.1 | % | 72.5 | % | -0.1 | % | -0.1 | % | 1.5 | % | |||||||
2012 | 73.4 | % | 73.4 | % | 73.5 | % | 71.4 | % | 0.0 | % | -0.1 | % | 2.0 | % | |||||||
2013 | 73.5 | % | 73.3 | % | 73.3 | % | 72.0 | % | 0.2 | % | 0.2 | % | 1.5 | % | |||||||
2014 (1) | 72.9 | % | 72.8 | % | — | 72.4 | % | 0.1 | % | — | 0.5 | % |
(1) | The forecasted collection rate for 2014 Consumer Loans as of August 31, 2014 includes both Consumer Loans that were in our portfolio as of June 30, 2014 and Consumer Loans assigned during the the past two months. The following table provides forecasted collection rates for each of these segments: |
Forecasted Collection Percentage as of | |||||||||||
2014 Consumer Loan Assignment Period | August 31, 2014 | June 30, 2014 | Variance | ||||||||
January 1, 2014 through June 30, 2014 | 73.1 | % | 72.8 | % | 0.3 | % | |||||
July 1, 2014 through August 31, 2014 | 72.3 | % | — | — |
As of August 31, 2014 | ||||||||||||
Consumer Loan Assignment Year | Forecasted Collection % | Advance % (1) | Spread % | % of Forecast Realized (2) | ||||||||
2005 | 73.7 | % | 46.9 | % | 26.8 | % | 99.8 | % | ||||
2006 | 70.0 | % | 46.6 | % | 23.4 | % | 99.5 | % | ||||
2007 | 68.0 | % | 46.5 | % | 21.5 | % | 99.1 | % | ||||
2008 | 70.3 | % | 44.6 | % | 25.7 | % | 98.7 | % | ||||
2009 | 79.4 | % | 43.9 | % | 35.5 | % | 98.8 | % | ||||
2010 | 77.2 | % | 44.7 | % | 32.5 | % | 96.8 | % | ||||
2011 | 74.0 | % | 45.5 | % | 28.5 | % | 87.6 | % | ||||
2012 | 73.4 | % | 46.3 | % | 27.1 | % | 69.1 | % | ||||
2013 | 73.5 | % | 47.6 | % | 25.9 | % | 40.7 | % | ||||
2014 | 72.9 | % | 48.2 | % | 24.7 | % | 11.6 | % |
(1) | Represents advances paid to dealers on Consumer Loans assigned under our portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under our purchase program as a percentage of the initial balance of the Consumer Loans. Payments of dealer holdback and accelerated dealer holdback are not included. |
(2) | Presented as a percentage of total forecasted collections. |
Year over Year Percent Change | ||||||
Three Months Ended | Unit Volume | Dollar Volume (1) | ||||
March 31, 2013 | -2.9 | % | -0.4 | % | ||
June 30, 2013 | 8.4 | % | 10.5 | % | ||
September 30, 2013 | 11.0 | % | 15.9 | % | ||
December 31, 2013 | 12.6 | % | 11.3 | % | ||
March 31, 2014 | 14.3 | % | 16.2 | % | ||
June 30, 2014 | 4.5 | % | 5.7 | % | ||
September 30, 2014 | 4.7 | % | (2) |
(1) | Represents advances paid to dealers on Consumer Loans assigned under our portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under our purchase program. Payments of dealer holdback and accelerated dealer holdback are not included. |
(2) | Dollar volume grew 2.4% for the two month period ended August 31, 2014. September 2014 dollar volume was unavailable at the time of this release. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | % Change | 2014 | 2013 | % Change | |||||||||
Consumer Loan unit volume | 52,086 | 49,762 | 4.7 | % | 168,282 | 155,573 | 8.2 | % | ||||||
Active dealers (1) | 5,023 | 4,573 | 9.8 | % | 6,556 | 5,836 | 12.3 | % | ||||||
Average volume per active dealer | 10.4 | 10.9 | -4.6 | % | 25.7 | 26.7 | -3.7 | % |
(1) | Active dealers are dealers who have received funding for at least one dealer loan or purchased loan during the period. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||
2014 | 2013 | % Change | 2014 | 2013 | % Change | |||||||||||||
Consumer Loan unit volume from dealers active both periods | 39,662 | 41,800 | -5.1 | % | 141,400 | 142,335 | -0.7 | % | ||||||||||
Dealers active both periods | 3,098 | 3,098 | - | 4,262 | 4,262 | - | ||||||||||||
Average volume per dealers active both periods | 12.8 | 13.5 | -5.1 | % | 33.2 | 33.4 | -0.7 | % | ||||||||||
Consumer Loan unit volume from new dealers | 2,594 | 2,672 | -2.9 | % | 17,180 | 20,117 | -14.6 | % | ||||||||||
New active dealers (1) | 628 | 571 | 10.0 | % | 1,774 | 1,864 | -4.8 | % | ||||||||||
Average volume per new active dealers | 4.1 | 4.7 | -12.8 | % | 9.7 | 10.8 | -10.2 | % | ||||||||||
Attrition (2) | -16.0 | % | -13.4 | % | -8.5 | % | -8.4 | % |
(1) | New active dealers are dealers who enrolled in our program and have received funding for their first dealer loan or purchased loan from us during the period. |
(2) | Attrition is measured according to the following formula: decrease in Consumer Loan unit volume from dealers who have received funding for at least one dealer loan or purchased loan during the comparable period of the prior year but did not receive funding for any dealer loans or purchased loans during the current period divided by prior year comparable period Consumer Loan unit volume. |
• | Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations. |
• | We may be unable to execute our business strategy due to current economic conditions. |
• | We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business. |
• | The terms of our debt limit how we conduct our business. |
• | A violation of the terms of our asset-backed secured financing facilities or revolving secured warehouse facilities could have a materially adverse impact on our operations. |
• | The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity and results of operations. |
• | Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations and adversely affect our financial condition. |
• | Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully. |
• | We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt. |
• | Interest rate fluctuations may adversely affect our borrowing costs, profitability and liquidity. |
• | Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition and results of operations. |
• | We may incur substantially more debt and other liabilities. This could exacerbate further the risks associated with our current debt levels. |
• | The regulation to which we are or may become subject could result in a material adverse effect on our business. |
• | Adverse changes in economic conditions, the automobile or finance industries, or the non-prime consumer market could adversely affect our financial position, liquidity and results of operations, the ability of key vendors that we depend on to supply us with services, and our ability to enter into future financing transactions. |
• | Litigation we are involved in from time to time may adversely affect our financial condition, results of operations and cash flows. |
• | 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. |
• | Our dependence on technology could have a material adverse effect on our business. |
• | Reliance on third parties to administer our ancillary product offerings could adversely affect our business and financial results. |
• | 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 reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace. |
• | The concentration of automotive dealers that participate in our program in several states could adversely affect us. |
• | Failure to properly safeguard confidential consumer information could subject us to liability, decrease our profitability and damage our reputation. |
• | 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. |
• | Reliance on our outsourced business functions could adversely affect our business. |
• | Natural disasters, acts of war, terrorist attacks and threats or the escalation of military activity in response to these attacks or otherwise may negatively affect our business, financial condition and results of operations. |