CREDIT ACCEPTANCE CORP

Previous wording

For the three months ended September 30, 2025, consolidated net income was $108.2 million, or $9.43 per diluted share, compared to consolidated net income of $78.8 million, or $6.35 per diluted share, forthe same period in 2024. The increase was primarily due to a decrease in provision for credit losses and an increase in finance charges, partially offset by an increase in operating expenses. Our results and achievements for the three months ended September 30, 2025 included the following:

Current wording

For the three months ended March 31, 2026, consolidated net income was $135.8 million, or $12.40 per diluted share, compared to consolidated net income of $106.3 million, or $8.66 per diluted share, forthe same period in 2025. The increase was primarily due to a decrease in provision for credit losses.

Previous wording

•A 3.9% increase in the average balance of our Loan portfolio from the third quarter of 2024 to $8.0 billion.

Current wording

•$7.9 billion average balance of our Loan portfolio, consistent with the first quarter of 2025.

Previous wording

•$107.4 million in the repurchase of approximately 230,000 shares, or 2.0% of the shares outstanding at the beginning of the quarter.

Current wording

•365,258 shares, or 3.4% of the shares outstanding at the beginning of the quarter, were repurchased at a cost of $178.9 million.

Previous wording

•$51.9 million in Dealer Holdback and accelerated Dealer Holdback payments to Dealers.

Current wording

•$47.1 million in Dealer Holdback and accelerated Dealer Holdback payments to Dealers.

Previous wording

Critical success factors include our ability to accurately forecast Consumer Loan performance, access capital on acceptable terms, and maintain or grow Consumer Loan volume at the level and on the terms that we anticipate, with the objective to maximize economic profit over the long term. Economic profit is a non-GAAP financial measure we use to evaluate our financial results and determine profit-sharing for team members. We also use economic profit as a framework to evaluate business decisions and strategies. Economic profit measures how efficiently we utilize our total capital, both debt and equity, and is a function of the return on capital in excess of the cost of capital and the amount of capital invested in the business.

Current wording

These factors support our long-term objective of maximizing economic profit, a non-GAAP financial measure we use to evaluate our financial results, determine profit-sharing for team members, and assess business decisions and strategies. Economic profit measures how efficiently we utilize our total capital, both debt and equity, and is a function of the return on capital in excess of the cost of capital and the amount of capital invested in the business.

Previous wording

(1)Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates.

Current wording

(1)Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment, including both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates. As a result, any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.

Previous wording

For the three months ended September 30, 2025, forecasted collection rates improved for Consumer Loans assigned in 2025, declined for Consumer Loans assigned in 2022 through 2024, and were generally consistent with expectations at the start of the period for all other assignment years presented. For the nine months ended September 30, 2025, forecasted collection rates improved for Consumer Loans assigned in 2020, declined for Consumer Loans assigned in 2022 through 2024, and were generally consistent with expectations at the start of the period for all other assignment years presented.

Current wording

For the three months ended March 31, 2026, forecasted collection rates improved for Consumer Loans assigned in 2021, declined for Consumer Loans assigned in 2023, and were generally consistent with expectations at the start of the period for all other assignment years presented. For Consumer Loans assigned in 2026, the decline in the current forecasted collection rate from the initial forecast primarily reflects the impact of canceled Consumer Loans, as described in the footnote to the table above. These Consumer Loans are not seasoned enough for changes in forecasted collection rates to be meaningfully influenced by performance.

Previous wording

(3)Represents activity for the nine months ended September 30, 2025. Information in this table for each of the years prior to 2025 represents activity for all 12 months of that year.

Current wording

(3)Represents activity for the three months ended March 31, 2026. Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year.

Previous wording

The spread between the forecasted collection rate as of September 30, 2025 and the advance rate ranges from 11.9% to 24.1%, on an annual basis, for Consumer Loans assigned over the last 10 years. The spreads with respect to 2019 and 2020 Consumer Loans have been positively impacted by Consumer Loan performance, which has exceeded our initial estimates by a greater margin than the other years presented. The spreads with respect to 2021 through 2023 Consumer Loans have been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented. The higher spread for 2025 Consumer Loans relative to 2024 Consumer Loans as of September 30, 2025 was primarily a result of Consumer Loan performance, as the performance of 2024 Consumer Loans has been lower than our initial estimates.

Current wording

The spread between the forecasted collection rate as of March 31, 2026 and the advance rate ranges from 11.9% to 24.2%, on an annual basis, for Consumer Loans assigned over the last 10 years. The spreads with respect to 2019 and 2020 Consumer Loans have been positively impacted by Consumer Loan performance, which has exceeded our initial estimates by a greater margin than the other years presented. The spreads with respect to 2021 through 2023 Consumer Loans have been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented. The lower spread for 2026 Consumer Loans relative to 2025 Consumer Loans as of March 31, 2026 was primarily a result of Consumer Loan performance, as the performance of 2026 Consumer Loans has been lower than our initial estimates while performance of 2025 Consumer Loans has exceeded our initial estimates.

Previous wording

(1)The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment. The forecasted collection rates represent the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates.

Current wording

(1)The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment. The forecasted collection rates represent the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment, including both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates. As a result, any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.

Previous wording

The spread as of September 30, 2025 on 2025 Dealer Loans was 22.4%, as compared to a spread of 20.2% on 2024 Dealer Loans. The increase was primarily a result of Consumer Loan performance, as the performance of 2024 Dealer Loans has been lower than our initial estimates.

Current wording

The spread as of March 31, 2026 on both 2026 and 2025 Dealer Loans was 22.4%, reflecting the net impact of two offsetting factors. Consumer Loan performance decreased the spread from 2025 to 2026, primarily due to the performance of 2026 Dealer Loans, which has been lower than our initial estimates. The impact of Consumer Loan performance was offset by the higher initial spread on 2026 Dealer Loans, due to the advance rate decreasing by a greater margin than the initial forecast in our Dealer Loan portfolio.

Previous wording

The spread as of September 30, 2025 on 2025 Purchased Loans was 21.3%, as compared to a spread of 21.0% on 2024 Purchased Loans, reflecting the net impact of two offsetting factors. Consumer Loan performance increased the spread from 2024 to 2025, as the performance of 2025 Purchased Loans has exceeded our initial estimates while the performance of 2024 Purchased Loans has been lower than our initial estimates. This impact of Consumer Loan performance was partially offset by the impact of a lower initial spread on 2025 Purchased Loans, due to the advance rate increasing by a greater margin than the initial forecast in our Purchased Loan portfolio.

Current wording

The spread as of March 31, 2026 on 2026 Purchased Loans was 20.5%, as compared to a spread of 21.3% on 2025 Purchased Loans. The decrease was a result of (i) Consumer Loan performance, as the performance of 2026 Purchased Loans has been lower than our initial estimates while the performance of 2025 Purchased Loans has exceeded our initial estimates, and (ii) 2026 Purchased Loans having a lower initial spread, due to the initial forecast decreasing by a greater margin than the advance rate.

Previous wording

Our strategy for accessing capital on acceptable terms needed to maintain and grow the business is to: (1) maintain consistent financial performance; (2) maintain modest financial leverage; and (3) maintain multiple funding sources. Our funded debt to equity ratio was 4.0 to 1 as of September 30, 2025. We currently utilize the following primary forms of debt financing: (1) our revolving secured line of credit facility; (2) Warehouse facilities; (3) Term ABS financings; and (4) senior notes.

Current wording

Our strategy for accessing capital on acceptable terms needed to maintain and grow the business is to: (1) maintain consistent financial performance; (2) maintain modest financial leverage; and (3) maintain multiple funding sources. Our funded debt to equity ratio was 4.2 to 1 as of March 31, 2026. We currently utilize the following primary forms of debt financing: (1) our revolving secured line of credit facility; (2) Warehouse facilities; (3) Term ABS financings; and (4) senior notes.

Previous wording

Unit and dollar volumes declined 16.5% and 19.4%, respectively, during the third quarter of 2025 as the number of active Dealers declined 4.7% and the average unit volume per active Dealer declined 12.2%. Dollar volume declined by more than unit volume during the third quarter of 2025 due to a decrease in the average advance paid, primarily resulting from a decrease in the average size of Consumer Loans assigned. Unit volume for the 28-day period ended October 28, 2025 decreased 13.0% compared to the same period in 2024.

Current wording

Unit and dollar volumes declined 4.3% and 4.0%, respectively, during the first quarter of 2026 as the number of active Dealers increased 1.7% and the average unit volume per active Dealer declined 6.5%. Unit volume for April 2026 decreased 5.1% compared to the same period in 2025.

Previous wording

As of September 30, 2025 and December 31, 2024, the net Dealer Loans receivable balance was 72.1% and 72.3%, respectively, of the total net Loans receivable balance. In 2025, we expanded Dealer access to the Purchase Program for Consumer Loans to consumers with higher credit ratings. The higher percentage of Purchased Loans in 2025 Consumer Loan assignment volume was primarily related to Consumer Loans assigned under this expanded Dealer access.

Current wording

As of March 31, 2026 and December 31, 2025, the net Dealer Loans receivable balance was 71.7% and 72.1%, respectively, of the total net Loans receivable balance. In 2025, we expanded Dealer access to the Purchase Program for Consumer Loans to consumers with higher credit ratings. The higher percentage of Purchased Loans in Consumer Loan assignment volume since 2024 has been primarily related to Consumer Loans assigned under this expanded Dealer access.

Previous wording

Finance Charges. The increase of $31.8 million, or 6.3%, was the result of increases in the average net Loans receivable balance and the average yield on our Loan portfolio as follows:

Current wording

Finance Charges. The increase of $11.7 million, or 2.2%, was primarily a result of an increase in the average yield on our Loan portfolio as follows:

Previous wording

The increase in the average net Loans receivable balance was primarily due to the dollar volume of new Consumer Loan assignments exceeding the principal collected on Loans receivable. The increase in the average yield of our Loan portfolio was primarily due to higher contractual yields on more recent Consumer Loan assignments.

Current wording

The increase in the average yield on our Loan portfolio was primarily due to higher contractual yields on more recent Consumer Loan assignments.

Previous wording

Operating Expenses. The increase of $17.2 million, or 13.3%, was primarily due to:

Current wording

Operating Expenses. The increase of $5.7 million, or 4.2%, was due to:

Previous wording

Provision for Credit Losses. The decrease of $32.7 million, or 17.7%, was due to decreases in provision for credit losses on forecast changes and provision for credit losses on new Consumer Loan assignments.

Current wording

Provision for Credit Losses. The decrease of $22.3 million, or 13.8%, was primarily due to a decrease in provision for credit losses on forecast changes.

Previous wording

The decrease in provision for credit losses related to forecast changes in the third quarter of 2025 compared to the third quarter of 2024 reflected changes in forecasted net cash flow timing and a smaller decline in Consumer Loan performance. While we continued to experience slowing of forecasted net cash flow timing as a result of lower-than-expected Consumer Loan prepayments, it was to a lesser extent as compared to the same period in 2024. During the third quarter of 2025, we decreased our estimate of future net cash flows by $58.6 million, or 0.5%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages. Historically, Consumer Loan prepayments have been lower in periods with less availability of consumer credit. During the third quarter of 2024, we decreased our estimate of future net cash flows by $62.8 million, or 0.6%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect a decrease in Consumer Loan prepayments, which remained below historical averages.

Current wording

The decrease in provision for credit losses related to forecast changes in the first quarter of 2026 compared to the first quarter of 2025 reflected a smaller decline in Consumer Loan performance and changes in forecasted net cash flow timing. During the first quarter of 2026, we decreased our estimate of future net cash flows modestly by $9.1 million, or 0.1%, and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages. During the first quarter of 2025, we decreased our estimate of future net cash flows by $20.9 million, or 0.2%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments.

Previous wording

Interest. The increase in interest expense of $5.1 million, or 4.6%, was primarily due to an increase in our average outstanding debt balance.

Current wording

Interest. The decrease in interest expense of $6.3 million, or 5.5%, was due to decreases in our average cost of debt and average outstanding debt balance.

Previous wording

Provision for Income Taxes. For the three months ended September 30, 2025, the effective income tax rate increased to 27.3% from 26.0% for the same period in 2024, primarily due to a revision of deferred tax estimates during the third quarter of 2025. For additional information, see Note 10 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Current wording

Provision for Income Taxes. For the three months ended March 31, 2026, the effective income tax rate decreased to 22.4% from 25.0% for the same period in 2025. The decrease was primarily due to a reversal of previously recognized non-deductible executive compensation expenses, related to the retirement of executive officers during the first quarter of 2026, and a decrease in the impact of state and local income taxes on our effective income tax rate, primarily related to uncertain tax position estimates. For additional information, see Note 10 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Previous wording

Since 1998, we have completed 59 term securitizations totaling $16.6 billion of debt issued. We believe our securitization trusts contain a significant margin of safety for investors, including structural features such as overcollateralization, subordination, and reserve accounts to protect our investors against credit risk. Our securitization trusts have paid timely interest and principal of all maturing securities in full and have never experienced an early amortization event, event of default, or other adverse event that would cause early or late repayment. Our securitization transactions are generally structured to withstand a 35% decline in the forecasted collection rate before the most junior bond is at risk of taking a principal loss. Accordingly, we believe future net cash flows from collateral securing our outstanding securitization debt are more than sufficient to repay all future obligations of our outstanding securitization trusts.

Current wording

Since 1998, we have completed 61 term securitizations totaling $17.6 billion of debt issued. We believe our securitization trusts contain a significant margin of safety for investors, including structural features such as overcollateralization, subordination, and reserve accounts to protect our investors against credit risk. Our securitization trusts have paid timely interest and principal of all maturing securities in full and have never experienced an early amortization event, event of default, or other adverse event that would cause early or late repayment. Our securitization transactions are generally structured to withstand a 35% decline in the forecasted collection rate before the most junior bond is at risk of taking a principal loss. Accordingly, we believe future net cash flows from collateral securing our outstanding securitization debt are more than sufficient to repay all future obligations of our outstanding securitization trusts.

Previous wording

On July 11, 2025, we extended the date on which our $75.0 million Warehouse Facility VI will cease to revolve from September 30, 2026 to September 30, 2028. The interest rate on borrowings under the facility has been decreased from the Secured Overnight Financing Rate (“SOFR”) plus 210 basis points to SOFR plus 185 basis points. The servicing fee has also been decreased from 6.0% to 4.0% of collections on the underlying consumer loans.

Current wording

On January 15, 2026, we extended the date on which our $100.0 million Term ABS 2021-1 financing will cease to revolve from February 17, 2026 to January 18, 2028. The interest rate on borrowings under the financing was decreased from the Secured Overnight Financing Rate (“SOFR”) plus 220 basis points to SOFR plus 140 basis points.

Previous wording

On March 27, 2025, we completed a $400.0 million Term ABS financing, which was used to repay outstanding indebtedness and for general corporate purposes. The financing has an expected average annualized cost of 5.6% (including upfront fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the underlying Loans.

Current wording

On May 5, 2026, we completed a $450.0 million Term ABS financing, which was used to repay outstanding indebtedness and for general corporate purposes. The financing has an expected average annualized cost of 5.2% (including upfront fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the underlying Loans.

Previous wording

Cash and cash equivalents were $15.9 million as of September 30, 2025 and $343.7 million as of December 31, 2024. As of September 30, 2025 and December 31, 2024, we had $1,586.3 million and $1,734.9 million, respectively, in unused and available revolving lines of credit. Our total balance sheet indebtedness as of September 30, 2025 and December 31, 2024 was $6,369.0 million and $6,352.9 million, respectively.

Current wording

Cash and cash equivalents were $25.7 million as of March 31, 2026 and $22.8 million as of December 31, 2025. As of March 31, 2026 and December 31, 2025, we had $1,264.4 million and $1,627.7 million, respectively, in unused and available revolving lines of credit. Our total balance sheet indebtedness as of March 31, 2026 and December 31, 2025 was $6,408.6 million and $6,353.9 million, respectively.

Previous wording

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we review our accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 discusses several critical accounting estimates, which we believe involve a high degree of judgment and complexity. There have been no material changes to the estimates and assumptions associated with these critical accounting estimates from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, except as described below.

Current wording

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we review our accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025 discusses several critical accounting estimates, which we believe involve a high degree of judgment and complexity. There have been no material changes to the estimates and assumptions associated with these critical accounting estimates from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements. These forward-looking statements represent our outlook only as of the date of this report. While we believe that our forward-looking statements are reasonable, actual results could differ materially since the statements are based on our current expectations, which are subject to risks and uncertainties. Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, and in Part II - Item 1A of this report, other risk factors discussed herein or listed from time to time in our reports filed with the SEC, and the following:

Current wording

We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements. These forward-looking statements represent our outlook only as of the date of this report. While we believe that our forward-looking statements are reasonable, actual results could differ materially since the statements are based on our current expectations, which are subject to risks and uncertainties. Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, other risk factors discussed herein or listed from time to time in our reports filed with the SEC, and the following: