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Credit Acceptance Announces: Certain Operating Results For The Two Months Ended February 28, 2013 And For The Three Months Ended March 31, 2013 And Share Repurchase Activity For The Three Months Ended March 31, 2013

Stocks in this article: CACC

Southfield, Michigan, April 8, 2013 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (NASDAQ: CACC) (referred to as the "Company", "Credit Acceptance", "we", "our", or "us") announced today certain operating results for the two months ended February 28, 2013 and for the three months ended March 31, 2013 and results of the Company's share repurchase program activities for the three months ended March 31, 2013.

Consumer Loan Performance

Dealers assign retail installment contracts (referred to as "Consumer Loans") to Credit Acceptance.  At the time a Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan.  Based on the amount and timing of these forecasts and expected expense levels, an advance or one-time purchase payment is made to the related dealer at a price designed to achieve an acceptable return on capital.  If Consumer Loan performance equals or exceeds our initial expectation, it is likely our target return on capital will be achieved.

We use a statistical model to estimate the expected collection rate for each Consumer Loan at the time of assignment.  We continue to evaluate the expected collection rate of each Consumer Loan subsequent to assignment.  Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast.  By comparing our current expected collection rate for each Consumer Loan with the rate we projected at the time of assignment, we are able to assess the accuracy of our initial forecast.  The following table compares our forecast of Consumer Loan collection rates as of February 28, 2013 with the forecasts as of December 31, 2012, and at the time of assignment, segmented by year of assignment:

    Forecasted Collection Percentage as of     Variance in Forecasted Collection Percentage from  
Consumer Loan Assignment Year   February 28, 2013     December 31, 2012     Initial Forecast     December 31, 2012     Initial Forecast    
2004   73.1 %   73.0 %   73.0 %   0.1 %   0.1 %  
2005   73.6 %   73.6 %   74.0 %   0.0 %   -0.4 %  
2006   69.9 %   69.9 %   71.4 %   0.0 %   -1.5 %  
2007   68.0 %   68.0 %   70.7 %   0.0 %   -2.7 %  
2008   70.3 %   70.3 %   69.7 %   0.0 %   0.6 %  
2009   79.5 %   79.5 %   71.9 %   0.0 %   7.6 %  
2010   77.3 %   77.3 %   73.6 %   0.0 %   3.7 %  
2011   74.1 %   74.1 %   72.5 %   0.0 %   1.6 %  
2012   72.5 %   72.2 %   71.4 %   0.3 %   1.1 %  

Consumer Loans assigned in 2009 through 2012 have yielded forecasted collection results materially better than our initial estimates, while Consumer Loans assigned in 2006 and 2007 have yielded forecasted collection results materially worse than our initial estimates.  For all other assignment years presented, actual results have been very close to our initial estimates.  For the two months ended February 28, 2013, forecasted collection rates improved for Consumer Loans assigned during 2012 and were generally consistent with expectations at the start of the period for all other assignment years presented.

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