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Accounts Receivable and Contract Assets
 9 Months Ended
Sep. 30, 2020
Accounts Receivable, after Allowance for Credit Loss [Abstract]  
Accounts Receivable and Contract Assets Accounts Receivable and Contract Assets

Accounts receivable consisted of the following (in millions):
 
 
September 30, 2020
 
December 31, 2019
Contracts in transit
 
$
235.9

 
$
269.7

Trade receivables
 
56.7

 
52.8

Vehicle receivables
 
55.3

 
50.9

Manufacturer receivables
 
107.1

 
112.4

Auto loan receivables
 
95.8

 
62.2

Other receivables
 
33.5

 
19.4

 
 
584.3


567.4

Less: Allowance for doubtful accounts
 
(6.3
)
 
(7.3
)
Less: Long-term portion of accounts receivable, net
 
(66.3
)
 
(55.1
)
Total accounts receivable, net
 
$
511.7


$
505.0



Accounts receivable classifications include the following:

•
Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received approximately ten days after selling a vehicle.
•
Trade receivables are comprised of amounts due from customers for open charge accounts, lenders for the commissions earned on financing and others for commissions earned on service contracts and insurance products.
•
Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer.
•
Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims.
•
Auto loan receivables include amounts due from customers related to retail sales of vehicles and certain finance and insurance products.

Interest income on auto loan receivables is recognized based on the contractual terms of each loan and is accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with loan originations are capitalized and expensed as an offset to interest income when recognized on the loans. All other receivables are recorded at invoice and do not bear interest until they are 60 days past due.

The balance of auto loan receivables is made up primarily of sub-prime loans secured by the related vehicle. More than 95% of the portfolio is aged less than 60 days past due with less than 5% on non-accrual status. As of September 30, 2020, the allowance for credit losses related to auto loan receivables was $13.9 million and included in allowance for doubtful accounts and other non-current assets. In accordance with Topic 326, the allowance for loan losses is estimated based on our historical write-off experience, current conditions and forecasts as well as the value of any underlying assets securing these loans and is reviewed monthly. Consideration is given to recent delinquency trends and recovery rates. Account balances are charged against the allowance upon
reaching 120 days past due status. The annual activity for charges and subsequent recoveries is immaterial. The remainder of our receivables are due primarily from manufacturer partners and various third-party lenders. The historical losses related to these balances are immaterial.

The long-term portion of accounts receivable was included as a component of other non-current assets in the Consolidated Balance Sheets.