Credit Acceptance Corp. reported double-digit increases in auto loan volume and value during the third quarter as the subprime auto lender did business with significantly more dealerships, but net income plunged.
The company acquired 71,937 new loans during the third quarter, up 29 percent from a year earlier, representing $924.9 million in new business, a 32 percent increase from the third quarter of 2021. The third-quarter loans came from 8,547 dealerships, a pool 13 percent larger from a year earlier.
But some loans from recent years have been less lucrative than Credit Acceptance expected. The lender lowered its forecast for anticipated collection rates from its loan portfolio for debts assigned in 2019 through 2022. This means Credit Acceptance expects to miss out on $85.4 million in expected cash flow, a 0.9 percent decline, the company said.