SOUTHFIELD, Michigan - Credit Acceptance (NASDAQ:CACC) Corporation (NASDAQ:CACC), a provider of auto financing solutions, has expanded its asset-backed non-recourse secured financing from $200 million to $300 million, the company announced today.
This financing, initially established on December 15, 2022, and known as Term ABS 2022-2, will now have an extended revolving period ending on June 15, 2027, instead of the previous date of December 15, 2025.
The amendment marks a significant increase in the available financing for Credit Acceptance, but does not introduce any other substantial changes to the terms of the agreement. The extension of the revolving period allows the company more time to utilize the funds under the same conditions as originally agreed.
Credit Acceptance specializes in offering financing programs to automobile dealers, enabling them to sell vehicles to consumers with various credit histories. The company's services are crucial for consumers who might otherwise be unable to purchase a vehicle or might end up with unreliable transportation options.
Moreover, Credit Acceptance reports to the three national credit reporting agencies, providing consumers the opportunity to enhance their credit scores through their financing programs.
The company's financial solutions are available nationwide through a network of automobile dealers. These dealers benefit from being able to sell to a broader customer base, including those who may not qualify for traditional financing but can access vehicles through Credit Acceptance's programs.
Credit Acceptance is a publicly traded company on the Nasdaq Stock Market, and its performance and financial health are of interest to investors and stakeholders. This expansion of financing capability could potentially influence the company's ability to offer more loans and grow its business.
The information in this article is based on a press release statement from Credit Acceptance Corporation.
InvestingPro Insights
Credit Acceptance Corporation (NASDAQ:CACC) has recently made headlines with its significant expansion of asset-backed non-recourse secured financing, signaling potential for growth and stability in its auto financing solutions.
As investors and stakeholders consider the implications of this development, certain metrics and insights from InvestingPro can provide a deeper understanding of the company's financial health and future prospects.
InvestingPro Data shows that Credit Acceptance has a market capitalization of $5.92 billion USD and is operating with a P/E ratio of 24.71, which adjusts to 23.47 when considering the last twelve months as of Q1 2024. This valuation comes amidst a challenging revenue landscape, with the company experiencing a revenue decline of 17.5% during the same period. Despite this, the company maintains a strong gross profit margin of 91.95%, showcasing its ability to retain a high percentage of revenue as gross profit.
InvestingPro Tips highlight that management's aggressive share buyback strategy could be indicative of confidence in the company's value. Moreover, the fact that Credit Acceptance's liquid assets exceed its short-term obligations suggests a solid liquidity position, which is crucial for the company's financial flexibility and ability to manage debt.
Credit Acceptance does not pay a dividend to shareholders, which can be a strategic decision to reinvest earnings back into the company for growth, a factor that might appeal to certain types of investors. The company has been profitable over the last twelve months, and analysts predict profitability will continue this year, reinforcing the company's financial stability.
For readers interested in a deeper dive into Credit Acceptance's financials and future outlook, InvestingPro offers additional insights. There are 6 more InvestingPro Tips available, providing a comprehensive analysis of the company's performance and projections. Access these tips at https://www.investing.com/pro/CACC and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. This offer can help investors make informed decisions by leveraging expert analyses and real-time data.
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