Credit Acceptance
| Company type | Public |
|---|---|
| Nasdaq: CACC[1] Russell 1000 Component | |
| Industry | Financial |
| Founded | 1972[2] |
| Founder | Donald Foss |
| Headquarters | Southfield, Michigan, United States |
Key people | Kenneth S. Booth (CEO) |
| Services | Credit Services |
 US$857.5 million (2019)[3] | |
| US$656.1 million (2019)[3] | |
| Total assets | US$7.42 billion (2019)[3] |
| Website | creditacceptance |
Credit Acceptance Corporation is an auto finance company providing automobile loans and other related financial products. The company operates its financial program through a national network of dealer-partners, the automobile dealers participating in the programs. The company operates two programs: the "Portfolio Program" and the "Purchase Program". Through these programs, the company can advance money to automobile dealers in exchange for the right to service the underlying consumer loans and can buy the consumer loans from automobile dealers. Credit Acceptance reported annual revenue of $1.49B for 2019.[4]
History
[edit]![[icon]](/wiki/File:Wiki_letter_w_cropped.svg){kind=small} | This section needs expansion. You can help by adding to it. (March 2020) |
In 1972, Credit Acceptance Corporation was founded by Donald Foss, one of the largest used car dealers in the world at that time.[5] In 1992, Credit Acceptance Corporation completed its initial public offering on the Nasdaq exchange, where it trades under the symbol "CACC."[5]
Criticism
[edit]On December 12, 2019 NPR aired a segment of Morning Edition called "The Big Business Of Subprime Auto Loans", by Anjali Kamat, which described "the murky world of subprime auto finance," and called it "eerily similar to the subprime mortgage lending that touched off the last financial crisis."[6] Aaron Greenspan, a short-seller and transparency expert who published a detailed report about the company, said: "It's a very strange set of circumstances where, like, high finance has been married with this kind of seedy underbelly of the auto industry."[6]
Credit Acceptance has been investigated by the Department of Justice and the Federal Trade Commission for questionable practices related to subprime lending.[7] Credit Acceptance repossesses 35 percent of the cars it finances.[8]
The company has also been criticized for its opaque accounting. According to an article by Aaron Back for the Wall Street Journal, "The problem is that the company’s unique accounting practices make it difficult to see how its loans are really doing. Credit Acceptance uses a form of 'level yield accounting' that is normally applied to purchases of already impaired loans. This means Credit Acceptance doesn’t disclose what portion of loans are delinquent or have defaulted."[9]
References
[edit]- ^ traded symbols
- ^ "CACC Profile - Credit Acceptance Corporation Stock - Yahoo Finance". finance.yahoo.com. Retrieved 6 March 2018.
- ^ a b c "EDGAR Pro". google.brand.edgar-online.com.
- ^ Zacks, Contributor Zacks Equity Research. "Credit Acceptance (CACC) Q4 Earnings Beat, Revenues Rise". www.nasdaq.com.
{{cite web}}:|first=has generic name (help) - ^ a b "Credit Acceptance Corporation: About Us". Archived from the original on 2014-02-15. Retrieved 2014-02-18.
- ^ a b "The Big Business Of Subprime Auto Loans". NPR. 2019. Retrieved December 12, 2019.
- ^ Rivlin, Gary. ""They had created this remarkable system for taking every last dime from their customers"". Mother Jones. Retrieved 2020-04-30.
- ^ "This Subprime Auto Lender Repos 35 Percent Of The Cars It Finances". Jalopnik. 9 February 2018. Retrieved 2020-04-30.
- ^ Back, Aaron (2017-08-16). "This Auto Lender Won't Pay Off". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-04-30.