Credit Acceptance is a subprime auto finance company that works through a network of roughly 15,000-16,000 U.S. auto dealers to finance vehicle purchases for credit-challenged consumers — about 80% of its loans are to borrowers with FICO scores below 650 or no score at all. Credit Acceptance does not lend directly to consumers; dealers originate the loan contracts and assign them to Credit Acceptance, which then collects payments directly from consumers. Credit Acceptance offers dealers two programs: a Portfolio Program (~74% of unit volume), where Credit Acceptance advances cash upfront to the dealer and collections first reimburse Credit Acceptance before any residual flows back to the dealer, and a Purchase Program (~26% of volume), where Credit Acceptance simply buys the loan outright. The Portfolio Program structure aligns dealer incentives with loan performance. Finance charges account for roughly 92% of revenue. Profitability hinges on how accurately Credit Acceptance forecasts collections relative to what it advances at origination, using a proprietary credit scoring model. The company funds its loan portfolio primarily through asset-backed securitization and revolving credit facilities. Capital allocation priorities are loan originations first, then share repurchases. Near-term challenges include underperforming loan vintages from 2022 and 2024 driven by inflation pressures on subprime borrowers, a deliberate tightening of underwriting standards in mid-2024 that reduced unit volumes, and an ongoing legal matter with the New York AG that has reached preliminary settlement terms involving a $75.5M payment.