Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you discuss the factors contributing to the slowdown in April unit volume to 11% from 24% in the first quarter?
A: Kenneth S. Booth, CEO, President & Director of Credit Acceptance Corporation, explained that the slowdown might be due to tougher comparisons from the previous periods and not necessarily a significant change in the competitive environment.
Q: What usually prompts competitors who have pulled back from the market to re-enter?
A: Kenneth S. Booth noted that re-entering the market is a significant decision for competitors, likely requiring stabilization of their business and better access to funding before considering a return.
Q: Can you provide insights into the elevated share buyback activity noted in the quarter?
A: Kenneth S. Booth mentioned that the company had raised substantial capital in late 2023 and completed a $500 million securitization in the first quarter, allowing them to feel comfortable using some of that capital for share buybacks.
Q: What are the reasons behind the 5.4% decrease in forecasted collection percentage for the 2022 vintage?
A: Kenneth S. Booth attributed the decrease to several factors, including the highly competitive environment when those loans were originated, peak vehicle valuations at the time, and the impact of inflation on subprime consumers, which has increased costs significantly over the past few years.
Q: How has the competitive landscape affected your business operations recently?
A: Kenneth S. Booth remarked that there hasn't been a material change in the competitive environment, suggesting that the company's current strategies and operations continue to perform as expected despite external competitive pressures.
Q: What is the company's preferred use of capital in terms of loan origination and share repurchases?
A: Kenneth S. Booth clarified that while loan origination remains a priority, the significant capital generated allows for flexibility in capital deployment, including share buybacks as seen in the recent quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
