Note 2 - Accounts Receivable

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 2. Accounts Receivable

Accounts receivable consisted of the following (in thousands):

	June 30, 2016			December 31, 2015
Contracts in transit	$	159,069		$	168,460
Trade receivables		38,524			33,749
Vehicle receivables		34,441			36,470
Manufacturer receivables		61,109			59,215
Auto loan receivables		54,412			42,490
Other receivables		3,001			3,033
		350,556			343,417
Less: Allowances		(3,972	)		(2,243	)
Less: Long-term portion of accounts receivable, net		(41,291	)		(32,712	)
Total accounts receivable, net	$	305,293		$	308,462

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, 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 allowance for doubtful accounts is estimated based on our historical write-off experience and is reviewed monthly. Consideration is given to recent delinquency trends and recovery rates. Account balances are charged against the allowance after all appropriate means of collection have been exhausted and the potential for recovery is considered remote. The annual activity for charges and subsequent recoveries is immaterial.

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