Credit Acceptance Corporation is a specialty finance company focused on the indirect automotive lending market in the United States. The company's primary business model involves partnering with independent and franchised automobile dealers to facilitate vehicle purchases for consumers who typically cannot qualify for traditional prime auto loans. Credit Acceptance operates two main programs: the Portfolio Program, where it advances money to dealers in exchange for the right to service the underlying consumer loans, and the Purchase Program, where it buys the consumer loans outright from the dealers. By purchasing retail installment contracts and providing capital, the company enables dealers to broaden their customer base while mitigating credit risk. The company generates revenue primarily through finance charges, fees, and premiums earned on these loans, as well as by reinsuring coverage under vehicle service contracts. Its competitive position is anchored by its proprietary Credit Approval Processing System (CAPS), which allows dealer-partners to deliver credit approvals to consumers within seconds, and its long-standing expertise in underwriting and servicing subprime auto loans.
