Credit Acceptance (CACC) Announces Extension of Date on Which $75.0 million Revolving Secured Warehouse Facility Ceases to Revolve

Credit Acceptance Corporation (NASDAQ:CACC) is one of the Best Stocks to Buy According to Abrams Bison Investments. On July 11, the company announced that it has extended the date on which its $75.0 million revolving secured warehouse facility will cease to revolve from September 30, 2026, to September 30, 2028. Notably, the interest rate on borrowings has decreased from the Secured Overnight Financing Rate (SOFR) plus 210 bps to SOFR plus 185 bps. Furthermore, the amendment also decreased the servicing fee from 6.0% to 4.0% of collections on the underlying consumer loans.

During Q1 2025, Credit Acceptance Corporation (NASDAQ:CACC)’s loan portfolio touched a new record high of $9.1 billion on an adjusted basis, reflecting a rise of 10% from Q1 2024, even though it saw a decline in unit dollar volume growth. Credit Acceptance Corporation (NASDAQ:CACC) maintains a healthy liquidity position, with more than $2.2 billion in unrestricted cash and cash equivalents and unused and available revolving lines of credit as of March 31, 2025.

During Q1 2025, Credit Acceptance Corporation (NASDAQ:CACC) financed more than 100,000 contracts for its dealers and consumers. Furthermore, it enrolled 1,617 dealers and now has the second-highest quarterly number of active dealers, with 10,789 dealers.

The London Company, an investment management company, released Q4 2024 investor letter. Here is what the fund said:

“Initiated: Credit Acceptance Corporation (NASDAQ:CACC) – CACC provides dealer financing programs, enabling automobile dealers to sell vehicles to consumers with poor credit. Operating as a lender of last resort, CACC serves a critical role for a large cohort of borrowers. CACC’s competitive advantage lies in its 50-year track record, partnerships with over 10,000 dealers, and robust data models that predict loan defaults with remarkable accuracy. Recent challenges from 2021-2022 loan vintages are improving as stronger 2023-2024 loans gain traction. Rising interest rates and reduced competition are driving double-digit growth in market share. Trading at a 12% earnings yield with a strong balance sheet, CACC offers a compelling risk/reward backed by decades of consistent profitability and shareholder-focused management.”

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Disclosure: None. This article is originally published at Insider Monkey.