Credit Acceptance: Hurdles to Loan Volume Growth

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The feedback we received was that those dealers who work with CACC and truly comprehend the product are very positive about it. They assert that it's the best system and nothing else compares. While they all have their individual minor points for improvement, there's nothing major. However, those dealers who don't frequently work with CACC, specifically franchise dealers, seem to either not know how to use it due to lack of training on the Credit Acceptance system, or they find it too inconvenient to use. We've had a few discussions about this. Sometimes, the issue is related to the different systems they use. For instance, the Westlake system makes it more difficult. It seems they even block CAPS, making it very inconvenient to efficiently manage inventory. The question then is, how many deals could CACC execute without lowering their IRRs, which they are not doing because they simply don't see the deals?

DealerCenter has a stronghold on independent dealers because it's a multifunctional CRM desking tool that acts like a RouteOne, Dealertrack system, and so on. Westlake has done a commendable job in figuring out how to keep an independent dealer within their circle. They offer floor planning, bulk purchases of receivables, lending, and the DealerCenter system. It's a one-stop shop.

This is a snippet of the transcript, sign up to read more.

The feedback we received was that those dealers who work with CACC and truly comprehend the product are very positive about it. They assert that it's the best system and nothing else compares. While they all have their individual minor points for improvement, there's nothing major. However, those dealers who don't frequently work with CACC, specifically franchise dealers, seem to either not know how to use it due to lack of training on the Credit Acceptance system, or they find it too inconvenient to use. We've had a few discussions about this. Sometimes, the issue is related to the different systems they use. For instance, the Westlake system makes it more difficult. It seems they even block CAPS, making it very inconvenient to efficiently manage inventory. The question then is, how many deals could CACC execute without lowering their IRRs, which they are not doing because they simply don't see the deals?

Westlake has kept up with technology advancements better than Credit Acceptance. I see this as a significant hurdle. For some reason, they see integration as an infringement on their technology, like DealerCenter, Westlake, or Dealertrack might be able to extract their scorecard data and figure out how they score deals.

This is a snippet of the transcript, sign up to read more.

The feedback we received was that those dealers who work with CACC and truly comprehend the product are very positive about it. They assert that it's the best system and nothing else compares. While they all have their individual minor points for improvement, there's nothing major. However, those dealers who don't frequently work with CACC, specifically franchise dealers, seem to either not know how to use it due to lack of training on the Credit Acceptance system, or they find it too inconvenient to use. We've had a few discussions about this. Sometimes, the issue is related to the different systems they use. For instance, the Westlake system makes it more difficult. It seems they even block CAPS, making it very inconvenient to efficiently manage inventory. The question then is, how many deals could CACC execute without lowering their IRRs, which they are not doing because they simply don't see the deals?

Especially on the West Coast, every independent uses DealerCenter. It's probably 90%, a huge number.

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