Credit Acceptance (CACC) risk factors, FY2025 10-K

Industry, Operational, and Macroeconomic Risks

1. 01Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations
2. 02Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully
3. 03Reliance on third parties to administer our ancillary product offerings could adversely affect our business and financial results
4. 04We are dependent on our senior management, and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably
5. 05Our reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace
6. 06An outbreak of contagious disease or other public health emergency could materially and adversely affect our business, financial condition, liquidity, and results of operations
7. 07The concentration of Dealers in several states could adversely affect us
8. 08Reliance on our outsourced business functions could adversely affect our business
9. 09Our ability to hire and retain foreign engineering personnel could be hindered by immigration restrictions
10. 10We may be unable to execute our business strategy due to current economic conditions
11. 11Natural disasters, climate change, military conflicts, acts of war, terrorist attacks and threats, or the escalation of military activity in response to terrorist attacks or otherwise may negatively affect our business, financial condition, and results of operations
12. 12Governmental or market responses to climate change and related environmental issues could have a material adverse effect on our business
13. 13A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interests which may conflict with the interests of our other security holders27% rewritten

Capital and Liquidity Risks

1. 14We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business
2. 15The terms of our debt limit how we conduct our business
3. 16A violation of the terms of our Term ABS financings or Warehouse facilities could have a material adverse impact on our operations
4. 17Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations, and adversely affect our financial condition
5. 18We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt
6. 19Interest rate fluctuations may adversely affect our borrowing costs, profitability, and liquidity
7. 20Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition, and results of operations
8. 21We may incur substantially more debt and other liabilities. This could exacerbate further the risks associated with our current debt levels
9. 22The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity, and results of operations

Technology and Cybersecurity Risks

1. 23Our dependence on technology could have a material adverse effect on our business
2. 24We depend on secure information technology, and a breach of our systems or those of our third-party service providers could result in our experiencing significant financial, legal, and reputational exposure and could materially adversely affect our business, financial condition, and results of operations
3. 25Our use of electronic contracts could impact our ability to perfect our ownership or security interest in Consumer Loans
4. 26Failure to properly safeguard our proprietary business information or confidential consumer and team member personal information could subject us to liability, decrease our profitability, and damage our reputation
5. 27The development and use of artificial intelligence presents risks and challenges that may adversely impact our businessNew

Legal and Regulatory Risks

1. 28Litigation we are involved in from time to time may adversely affect our financial condition, results of operations, and cash flows
2. 29Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations