CACC
- Credit Acceptance Corporation
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Overview
Company Summary
Credit Acceptance Corporation (CACC) is a specialized financial services company that operates in the automotive industry. Its primary business model is as a subprime auto lender. The company provides financing options for consumers with less than perfect credit who are seeking to purchase a vehicle.
CACC primarily works with automobile dealerships, enabling them to sell vehicles to customers who otherwise may not have access to traditional financing options. It does this by purchasing retail installment sales contracts (loans) from the dealerships at a discounted price. These loans are often made to individuals with poor credit scores or limited credit histories, making them high-risk borrowers.
Once the loan contracts are acquired, Credit Acceptance assumes the risk associated with collecting loan payments from the borrowers. The company has developed an extensive underwriting and risk management process to assess the creditworthiness of applicants and determine appropriate interest rates and repayment terms.
Credit Acceptance Corporation generates revenue by charging interest on these loans, as well as fees and other charges associated with the financing process. The company also provides guidance and support to dealerships, helping them structure deals that meet the underwriting standards and regulatory requirements.
CACC operates primarily in the United States, serving thousands of independent and franchised automobile dealerships across the country. The company has built strong relationships with its dealership partners, offering training programs and technology tools to help them succeed in selling vehicles to customers with subprime credit.
In summary, Credit Acceptance Corporation provides financing solutions for consumers with poor credit who want to purchase a vehicle. It partners with dealerships to offer these financing options, assuming the risk associated with lending to subprime borrowers and generating revenue through interest and fees.