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Sep 30
Credit Acceptance Q3 2025 Earnings Report
Credit Acceptance reported a significant increase in GAAP net income and diluted EPS for Q3 2025, driven by decreased credit loss provisions and higher finance charges, despite declines in consumer loan assignment volumes.
Key Takeaways
Credit Acceptance Corporation announced a net income of $108.2 million, or $9.43 per diluted share, for the third quarter of 2025. This represents a substantial increase compared to the same period last year, primarily due to a decrease in the provision for credit losses and an increase in finance charges. However, the company experienced declines in both unit and dollar volumes of consumer loan assignments and a decrease in economic profit.
GAAP net income increased by 37.3% to $108.2 million, and diluted EPS rose by 48.5% to $9.43 compared to Q3 2024.
Adjusted net income grew by 2.7% to $117.9 million, with adjusted diluted EPS increasing by 11.1% to $10.28.
Consumer loan assignment unit volume declined by 16.5% and dollar volume by 19.4% year-over-year, attributed to fewer active dealers and lower average volume per dealer.
The average balance of the loan portfolio increased by 3.9% from Q3 2024 to $8.0 billion, contributing to a 6.3% increase in finance charges.
Credit Acceptance
Credit Acceptance
Credit Acceptance Revenue by Segment
Revenue by Segment
Finance Charges Revenue
CapyFin.comPremiums Earned Revenue
CapyFin.comOther Income Revenue
CapyFin.com Forward Guidance
Credit Acceptance anticipates continued challenges in the competitive landscape and collection environment, but expects its modernized systems and product initiatives to drive future improvements. The company's business model is designed to produce acceptable returns even with worse-than-forecasted loan performance.
Positive Outlook
- Modernized CAPS origination system and delivery operating model are expected to increase speed of enhancements by almost 70% compared to a year ago.
- New dealer experience for franchise and large independent dealers is being tested, offering enhanced deal optimization and expanded F&I products.
- Digital credit application product launched for smaller independent dealers, with over 900 dealers submitting applications during the quarter.
- Enhanced consumer mobile application functionality is contributing to fewer servicing calls and increased operational efficiency.
- Deployment of AI is improving call center operational efficiencies and consumer engagement.
Challenges Ahead
- Continued modest declines in loan performance are expected.
- Forecasted collection rates declined for Consumer Loans assigned in 2022 through 2024.
- Slower forecasted net cash flow timing due to lower-than-expected Consumer Loan prepayments, which remain below historical averages.
- Unit volume for the 28-day period ended October 28, 2025, decreased 13.0% compared to the same period in 2024.
- Economic profit decreased by 8.7% for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to increased cost of capital and decreased adjusted return on capital.