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Credit Acceptance Announces Fourth Quarter And Full Year 2012 Earnings

(2)     Presented as a percentage of total forecasted collections.

The risk of a material change in our forecasted collection rate declines as the Consumer Loans age.  For 2009 and prior Consumer Loan assignments, the risk of a material forecast variance is modest, as we have currently realized in excess of 90% of the expected collections.  Conversely, the forecasted collection rates for more recent Consumer Loan assignments are less certain as a significant portion of our forecast has not been realized.

The spread between the forecasted collection rate and the advance rate declined during the 2004 through 2007 period as we increased advance rates during this period in response to a more difficult competitive environment.  During 2008 and 2009, the spread increased as the competitive environment improved and we reduced advance rates.  In addition, during 2009, the spread was positively impacted by better than expected Consumer Loan performance.  During the 2010 through 2012 period, the spread decreased as we again increased advance rates in response to the competitive environment.

The following table presents forecasted Consumer Loan collection rates, advance rates, and the spread (the forecasted collection rate less the advance rate) as of December 31, 2012 for dealer loans and purchased loans separately.  All amounts are presented as a percentage of the initial balance of the Consumer Loan (principal + interest).

  Consumer Loan Assignment Year   Forecasted Collection %     Advance % (1)     Spread %  
Dealer loans 2007   67.9 %   45.8 %   22.1 %
  2008   70.7 %   43.3 %   27.4 %
  2009   79.5 %   43.5 %   36.0 %
  2010   77.3 %   44.4 %   32.9 %
  2011   74.0 %   45.2 %   28.8 %
  2012   72.1 %   46.0 %   26.1 %
                     
Purchased loans 2007   68.4 %   49.1 %   19.3 %
  2008   69.7 %   46.7 %   23.0 %
  2009   79.5 %   45.3 %   34.2 %
  2010   77.1 %   46.4 %   30.7 %
  2011   74.4 %   48.2 %   26.2 %
  2012   73.0 %   49.5 %   23.5 %

(1)     Represents advances paid to dealers on Consumer Loans assigned under our portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under our purchase program as a percentage of the initial balance of the Consumer Loans.  Payments of dealer holdback and accelerated dealer holdback are not included.

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