Glossary of Credit Acceptance Terms

This glossary provides key terms and definitions related to Credit Acceptance.

A unique 9-character number used to identify a contract and the corresponding customer. The Company assigns an approval number to each application received through CAPS. If the application becomes a contract, that same number is used as the Account Number

An Active Rated Dealer who completes at least one contract in any given month.

A dealer enrolled with Credit Acceptance that is 1-6 rated who has the ability to submit contracts through CAPS®.

The portion of up-front money that is paid to dealers submitting a contract under the Portfolio Program at the time the contract is funded. The Advance represents a portion of the anticipated future collections the dealer can expect to receive for the contract. Only applicable to the Portfolio Program. Equivalent term for up-front money paid to dealers on the Purchase Program is 'Purchase Price.'

The sum of all the outstanding or unreimbursed Advances in a dealer’s pool of contracts submitted under the Portfolio Program. The Advance balance is paid down through net collections. (See 'Pool', 'Net Collections')

See 'Credit Application'

An approval is a completed application where all legal conditions checked on Step 4 have been satisfied, the contract terms have been determined, and the completed application has been submitted. An “approval” is often associated with an application identification number that is established on Step 1. However, the approval of the completed application occurs when the application is submitted to Step 5. Note: Credit Acceptance does not provide approvals to customers. The dealer is the credit decision maker and provides the approval to the customer.

A network that coordinates electronic payments and automated money transfers between financial institutions. ACH transfers are a way to move money between accounts electronically. Dealers can elect to receive Advances, Portfolio Profit payments, and Purchase Price payments from Credit Acceptance to their bank accounts via ACH credits/transfer by submitting the appropriate completed ACH Deposit Enrollment Form to the Dealer Service Center.

A set of ambitious stretch-goals set by Credit Acceptance to accomplish as part of our corporate strategy. The Company achieved three out of four goals of the first BHAG between 2001- 2014. BHAG 2.0 was established in 2015 and includes: 1) Achieving a share price of $1,000, 2) Writing 1 million contracts in a year, and 3) Ranking in the top 10 of Fortune Magazine’s 100 Best Companies to Work For®.

A document used by the Market Area Manager (MAM) and Dealer to confirm alignment regarding expectations and goals.

A reporting portal integrated into and accessed through the Credit Acceptance CRM (Customer Relationship Management System).

Credit Acceptance’s proprietary Credit Approval Processing System provided to dealers via an online portal and used by dealers enrolled with Credit Acceptance to structure and submit applications for credit to the Company. CAPS enforces state and federal requirements and generates a compliant retail installment sales contract and other documents necessary to complete the credit transaction between the customer and the dealer.

An additional Advance equal to $100 provided to dealers on applications initiated by the dealer directly in CAPS, as opposed to initiated by a dealer using an aggregator (e.g., Dealertrack or RouteOne.) Applications received by CAPS from certain other sources (e.g. Carsforsale, Autoclick, Ace Leads, and ProMax) may still quality for the CAPS Advantage.

The Chief Sales Officer (CSO) is responsible for leading the Company's sales organization to meet sales growth targets. The CSO also directs the Company's marketing efforts. The CSO serves on the Company’s BHAG Committee. The Vice Presidents of Sales report directly to the CSO, and the CSO reports directly to the CEO.

A dealer’s total receivables are broken into two categories: RLot and C-Lot. R-Lot refers to balances on accounts that have NOT:
  • Gone 90 calendar days without a payment OR
  • Had an auction payment applied
C-Lot refers to balances on accounts that have:
  • Gone 90 calendar days without a payment OR
  • Had an auction payment applied
Once an account goes into the C-Lot, it cannot revert back to the R-Lot. The amount of R-Lot and C-Lot receivable balances are contained in the monthly Dealer Statement.

All costs, fees and expenses incurred or assessed by Credit Acceptance in the servicing and collection of a Receivable / Credit Acceptance contract. (See Receivable Balance)

The amount of money CAPS estimates will be collected throughout the life of a contract.

Contract refers to a retail installment sales contract (RISC) that evidences an Obligor’s/Customer’s agreement to purchase a financed vehicle over time (i.e., on an installment basis) and that is generated by CAPS, signed by the dealer and the customer, and assigned by the dealer to Credit Acceptance for servicing, administration and collection. (See ‘Retail Installment Sales Contract,’ ‘CAPS’)

This refers to collection of personal and financial information for a customer, together with the selection by the customer of a vehicle. This occurs between Steps 1 – 4 in CAPS. After a vehicle is selected on Step 4 the Application is complete.

See 'Chief Sales Officer (CSO)'

The legal agreement between an enrolled dealer and Credit Acceptance. Credit Acceptance has a dealer agreement specific to each finance program it offers to dealers. The Dealer Servicing Agreement (DSA) is for dealers enrolling in the Portfolio Program. The Purchase Program Agreement (PPA) is for dealers enrolling in the Purchase Program. The enrollment package contains additional agreements, such as the GAP and VSC Program Agreements, that the dealer may also sign at enrollment. (See ‘Dealer Servicing Agreement (DSA),’ ‘Purchase Program Agreement (PPA)’)

Multiple stores/rooftops that have common ownership and/or are controlled by the same entities or person(s).

A numerical grade (from 0.1-6.5 for active dealers and 7-8 for inactive dealers with 0.1 being the best) assigned by Credit Acceptance to enrolled dealers that assesses the actual performance of a dealer’s assigned contracts as compared to the performance expected at the time of origination. The Dealer Rating has no impact on an application from a customer. The Dealer Rating impacts the Advances paid to the dealer on future contracts. The Dealer Rating is a reflection of how closely the contracts assigned by a dealer perform as compared to original expectations. It is a lagging indicator of how well or poorly a dealer is executing best practices. A dealer rating below 7 indicates the dealer is ‘active’ and can submit contracts to Credit Acceptance. A dealer with a rating of 7-8 can no longer submit contracts to Credit Acceptance and is considered ‘inactive’. The better the Dealer Rating, the higher the Advance to the dealer based on the advance rate applied to the contract. Best practices that can affect the Dealer Rating are covered in Credit Acceptance training and outlined in a Dealer Rating Best Practices marketing handout that can be used with dealers. In general, dealerships that use CAPS to structure collectible, affordable contracts for reliable vehicles are more likely to have better Dealer Ratings. For more information, refer to “Risk and Dealer Ratings” in Workday Learning. (See ‘Advance’)

A Credit Acceptance Department that reviews contracts and proof documents submitted by dealers, ensures that they comply with the Company’s policies and funding standards, funds contracts, and provides customer service to dealers and Credit Acceptance team members.

A legal agreement outlining the terms and conditions agreed to by a dealer enrolling in the Credit Acceptance Portfolio Program, pursuant to which Credit Acceptance accepts the assignment of retail installment sales contracts from the dealer for servicing, administration and collection. A properly executed DSA is required before a dealer will be granted access to CAPS. Equivalent term for dealers enrolled in the Purchase Program is the PPA. (See ‘CAPS’)

Credit Acceptance maintains a Dealer Watch List which may include dealers, dealership employees, or other related parties. The most common reasons for inclusion on this list are fraud uncovered during an audit, outstanding titles, and performance issues. Dealers with which the Company has not previously done business may also appear on the list as a result of the Company becoming aware of information about potentially improper behavior, such as an Attorney General press release related to criminal indictments. The Dealer List is used by Dealer Enrollment and Corporate Legal to determine whether to enroll or re-enroll dealers. The list is maintained by Dealer Audit and any inquiry should be directed to [email protected]. A similar, but less complete list, is also available in CAPS on the dealer search page. Refer to the Dealer Conduct Policy in the Funding Manual (located in CAPS) for details. Dealers on this list may also be Inactive Rated Dealers. (See ‘CAPS,’ ‘Inactive Rated Dealers’)

A metric used to measure sales performance, calculated by dividing Credit Acceptance completed contracts by applications in CAPS.

The primary role of a Director of National Accounts (DNA) is to actively assist DOS and MAMs to consistently grow (increase active dealer count, applications, and contracts) the National Account business by enrolling dealers, launching them and keeping them active, and retaining existing dealers within their respective Zone (area of operation). A DNA reports to the Vice President of National Accounts (VPNA). (See ‘DOS,’ ‘MAM,’ ‘National Account’)

The primary role of a Director of Sales (DOS) is to consistently grow (increase active dealer count, applications, and contracts) the business by hiring, developing and coaching a team of Market Area Managers (MAMs) and by implementing the dimensions of Organizational Health. The DOS also works with DNAs toward achieving their district growth goals. Market Area Managers report to a DOS. DOS report to a RVP. (See ‘MAM,’ ‘DNA’)

On Purchase contracts, the Discount is the Total Amount Financed minus the Purchase Price of the contract. (See ‘Purchase Price’)

See ‘Director of National Accounts (DNA)’

See ‘Director of Sales (DOS)’

See ‘Dealer Servicing Agreement (DSA)’

See ‘Dealer Service Center (DSC)’

eContract and eContracting refer to a process by which a contract is executed by means of electronic signatures. eContracting is an alternative method to hand signing paper contracts (a.k.a. Wet Signature). Using eContracting enables dealers to systematically send signed contracts and other transaction documents to Credit Acceptance electronically for processing, instead of via mail or overnight courier. eContracting is legal in all states by virtue of federal law. (See ‘Wet Signature’)

A legally binding signature executed by means of an electronic signature process. (See ‘eContract / eContracting’)

Estimated Portfolio Profit (as displayed on Step 4) represents an estimate of how much Portfolio Profit is likely to be paid over time on a contract to a dealer. The estimate includes the Portfolio Profit Express payment and Portfolio Profit and is based on the dealer’s estimated 80% share of net collections, less the Advance paid to the dealer. Note that this is an estimate, only; the actual amount of Portfolio Profit may vary based on actual collections. Portfolio Profit, Portfolio Profit Express and Estimated Portfolio Profit are only applicable to the Portfolio Program. (See ‘Net Collections,’ ‘Advance’).

A dealership that elects not to assign at least one (1) Contract to Credit Acceptance during any six (6) consecutive monthly period.

Dealers with a Dealer Rating of 7-8 are considered Inactive dealers and no longer have access in CAPS to submit contracts to Credit Acceptance. CAPS users with owner-level access at a 7-rated dealer have access to CAPS reports but cannot submit contracts. A dealer can become Inactive for a variety of reasons. The most common reason is that a dealer has not completed a contract in 12 months. Less common reasons for becoming Inactive are a dealer going out of business, a dealer whose license expires, a dealer who commits fraud, or a dealer whose contracts severely underperform expectations. (See ‘CAPS,’ ‘Dealer Watch List’)

A Low Volume Dealer is a Dealer that has submitted less than one hundred (100) Contracts to Credit Acceptance at the time it becomes an Inactive Dealer. A Low Volume dealer is not entitled to Portfolio Profit. Note that once a dealership has submitted 100 contracts to Credit Acceptance, it can become an Inactive Dealer but cannot become a Low Volume Dealer. If a Low Volume dealer wants to start doing business with Credit Acceptance again, it will need to sign a new DSA and will be assigned a new Lot Number for each store.

See ‘Market Area Manager (MAM)’

The primary role of the Market Area Manager (MAM) is to consistently grow (increase active dealer count, applications, and contracts) the business by enrolling new dealers, launching them and keeping them active, and retaining the existing dealer base within their territory. MAMs work directly with their DOS as well as DNA to accomplish these goals. The MAM reports to a DOS. (See ‘DOS,’ ‘DNA’)

The largest automotive Dealer Groups (Franchise and Independent) in the United States, with multiple locations, often publicly-traded, 4,000+ vehicle sales per year, and with high-growth opportunities. These relationships touch multiple DOS and MAMs in various Districts. The group level relationship is owned by the DNA and the individual store level relationships are owned and serviced by MAMs at the local dealership level. We use the Automotive News Top 150 as a baseline for identifying National Accounts. (See ‘Dealer Groups,’ ‘DNA,’ ‘MAM’)

The total amount collected on a Contract assigned to Credit Acceptance, less any collection costs or expenses incurred by Credit Acceptance during the servicing, administration and collections on the contract (e.g., attorneys fees, repossession agent fees, auction fees, etc.). Net collections are applied to the pool in which the contract was assigned (and, for which the collections were received) on a monthly basis as collected. (See ‘Pool’)

A group of Contracts submitted by a Dealer pursuant to a specific finance program (Portfolio Program, Purchase Program, Collection Only option). Pools of contracts submitted using the Portfolio Program are open pools until they are closed, or “capped,” at 50 or 100 contracts at the election of the dealer. Pools of contracts submitted under the Purchase Program or Collections Only option do not close. (See ‘Contract,’ ‘Pool Capping,’ ‘Pool Cap Preference’)

Dealers can choose to close (or “cap”) their Portfolio Program pools at either 50 or 100 contracts. This is not a permanent choice; dealers can change their pool cap preference at any time in CAPS. Note: If a dealer changes their preference from 100 to 50 and the dealer has more than 41 contracts in its open pool at that time, they must submit 10 additional contracts to close the pool in order to become eligible for a PPE payment. (See ‘Pool,’ ‘Pool Capping’)

A pool may be either capped or uncapped. A pool is capped when the number of contracts placed in a given pool reaches the number of contracts that are required to cap a pool. Under the Portfolio Program, dealers can choose to close (or “cap”) their pools at either 50 or 100 contracts. Pool capping is only applicable to the Portfolio Program. Once a pool is capped, no further contracts can be added to that pool and a new pool is opened for future contracts submitted by the dealer. Pools are capped to give dealers the opportunity to start receiving Portfolio Profit from their contracts sooner. (See ‘Pool,’ ‘Pool Cap Preference’)

The amount of additional revenue a dealer can potentially be paid, above and beyond the Advance (provided the dealer is not a Low Volume Dealer) on the dealer’s Contracts submitted to Credit Acceptance. Portfolio Profit also includes any amounts paid to the dealer as Portfolio Profit Express (PPE). Portfolio Profit is only applicable to the Portfolio Program. (See ‘Advance,’ ‘Contract,’ ‘Low Volume Dealer,’ ‘Portfolio Profit Express’)

An Advance paid to the dealer on future Portfolio Profit. The PPE payment amount is a percentage of the estimated Portfolio Profit for the pool. PPE is only applicable to the Portfolio Program. For pools capped at 50 contracts, the PPE payment is 20% of estimated Portfolio Profit. For pools capped at 100 contracts, the PPE payment is 30% of estimated Portfolio Profit.

See ‘Purchase Program Agreement (PPA)’

See ‘Portfolio Profit Express (PPE)’

To speed up the funding process dealers have the option to obtain a Pre-Approval of proofs and other documents (via CAPS,, or fax) to ensure they will satisfy a stipulation. The Pre-Approval process enables dealers to provide proofs to satisfy stipulations during the originations process and see confirmation (or denial) of the request in as little as 20 minutes (depending on submission day and time). Note that if a dealer makes any changes to a stipulation that was satisfied during the Pre-Approval process, the Pre-Approval and stipulation will need to be re-verified and funding could be delayed. The Pre-Approval process is not intended to be used as an audit or fraud check. (See ‘Stipulations’)

The amount Credit Acceptance will pay for a Purchase Program contract. The equivalent term on the Portfolio Program is ‘Advance.’ Under the Purchase Program, dealers receive only the initial Purchase Price; they do not receive additional payments (i.e., Portfolio Profit) over time. Note that dealers often define Purchase Price as the price at which they sell a vehicle. (See ‘Contract’)

A legal agreement outlining the terms and conditions agreed to by a dealer enrolling in the Credit Acceptance Purchase program, pursuant to which the dealer agrees to assign, and Credit Acceptance agrees to purchase, Contracts. A properly executed PPA is required before a dealer will be granted access to CAPS. Equivalent term for dealers enrolled in the Portfolio Program is the DSA. (See ‘Contract’)

The amount of money owed by the customers to Credit Acceptance for all contracts that have been assigned to Credit Acceptance by the dealer for administration, servicing, and collection. A Receivable will be designated as an R-Lot Receivable or a C-Lot Receivable and will be noted on the monthly Dealer Statement made available to the dealer. (See ‘Dealer Agreement,’ ‘R-Lot,’ ‘C-Lot’)

The primary role of a Regional Vice President (RVP) is to successfully manage the assigned sales region in order to meet the objectives of the Company’s overall business plans and strategies. A RVP develops and coaches a team of Directors of Sales (DOS), and reports to the Chief Sales Officer (CSO). (See ‘DOS,’ ‘CSO’)

See ‘Contract/Contracting'

A dealer’s total receivables is broken into two categories: R-Lot and C-Lot. R-Lot refers to balances on accounts that have NOT:
  • Gone 90 calendar days without a payment OR
  • Had an auction payment applied
C-Lot refers to balances on accounts that have:
  • Gone 90 calendar days without a payment OR
  • Had an auction payment applied
Once an account goes into the C-Lot, it cannot revert back to the R-Lot. The amount of R-Lot and C-Lot receivable balances are contained in the monthly Dealer Statement.

See ‘Regional Vice President (RVP)’

A feature in CAPS in Steps 3 and 4 that allows a dealer to store up to four potential deal structures with different financing options at any given time to facilitate comparison

Requirements or conditions that must be met prior to funding a contract. These are generally requests for documents or proofs provided by the customer in order to satisfy the applicable funding policies and standards, such as proof of identity, residence, employment, and income.

Equals the contract term multiplied by the monthly payment amount.

A traditional physical signature applied to a document using a pen with liquid ink.