10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-20202

CREDIT ACCEPTANCE CORPORATION

(Exact name of registrant as specified in its charter)

MICHIGAN (State or other jurisdiction of incorporation or organization)	38-1999511 (I.R.S. Employer Identification No.)
25505 WEST TWELVE MILE ROAD SOUTHFIELD, MICHIGAN (Address of principal executive offices)	48034-8339 (Zip Code)

Registrant’s telephone number, including area code: 248-353-2700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer þ Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The number of shares of Common Stock, par value $0.01, outstanding on October 19, 2012 was 24,551,189.

TABLE OF CONTENTS

PART I. — FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets – As of September 30, 2012 and December 31, 2011	1
Consolidated Statements of Income – Three and nine months ended September 30, 2012 and 2011	2
Consolidated Statements of Comprehensive Income – Three and nine months ended September 30, 2012 and 2011	3
Consolidated Statements of Cash Flows – Nine months ended September 30, 2012 and 2011	4
Notes to Consolidated Financial Statements	5
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	45
ITEM 4. CONTROLS AND PROCEDURES	45
PART II. — OTHER INFORMATION
ITEM 1A. RISK FACTORS	46
ITEM 6. EXHIBITS	46
SIGNATURE	47

PART I. - FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

CREDIT ACCEPTANCE CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)	As of
	September 30, 2012			December 31, 2011
	(Unaudited)
ASSETS:
Cash and cash equivalents	$	5,725		$	4,657
Restricted cash and cash equivalents		167,706			104,679
Restricted securities available for sale		–			810
Loans receivable (including $5,634 and $4,949 from affiliates as of September 30, 2012 and December 31, 2011, respectively)		2,047,481			1,752,891
Allowance for credit losses		(170,763	)		(154,318	)
Loans receivable, net		1,876,718			1,598,573
Property and equipment, net		21,863			18,472
Income taxes receivable		–			506
Other assets		31,310			30,901
Total Assets	$	2,103,322		$	1,758,598
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Accounts payable and accrued liabilities	$	98,131		$	95,858
Revolving secured line of credit		115,800			43,900
Secured financing		791,850			599,281
Mortgage note		4,104			4,288
Senior notes		350,307			350,378
Deferred income taxes, net		135,334			123,449
Income taxes payable		9,991			1,493
Total Liabilities		1,505,517			1,218,647
Commitments and Contingencies - See Note 13
Shareholders' Equity:
Preferred stock, $.01 par value, 1,000 shares authorized, none issued		–			–
Common stock, $.01 par value, 80,000 shares authorized, 24,551 and 25,624 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively		246			256
Paid-in capital		49,455			38,801
Retained earnings		548,104			500,888
Accumulated other comprehensive income		–			6
Total Shareholders' Equity		597,805			539,951
Total Liabilities and Shareholders' Equity	$	2,103,322		$	1,758,598

See accompanying notes to consolidated financial statements.

1

CREDIT ACCEPTANCE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In thousands, except per share data)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Revenue:
Finance charges	$	137,495	$	117,905	$	397,563	$	338,238
Premiums earned		12,206		10,462		34,987		29,195
Other income		5,977		5,372		17,313		19,783
Total revenue		155,678		133,739		449,863		387,216
Costs and expenses:
Salaries and wages		21,720		15,929		61,530		47,402
General and administrative		6,797		6,044		21,463		18,186
Sales and marketing		8,129		5,587		23,478		17,768
Provision for credit losses		9,759		4,550		17,716		22,394
Interest		16,289		14,600		47,150		42,173
Provision for claims		9,122		8,363		26,704		22,733
Total costs and expenses		71,816		55,073		198,041		170,656
Income before provision for income taxes		83,862		78,666		251,822		216,560
Provision for income taxes		30,874		28,706		91,983		78,565
Net income	$	52,988	$	49,960		159,839		137,995
Net income per share:
Basic	$	2.13	$	1.92	$	6.24	$	5.23
Diluted	$	2.12	$	1.91	$	6.22	$	5.19
Weighted average shares outstanding:
Basic		24,908		26,033		25,629		26,397
Diluted		24,962		26,136		25,706		26,573

See accompanying notes to consolidated financial statements.

2

CREDIT ACCEPTANCE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(In thousands)	For the Three Months Ended September 30,
	2012			2011
Net income	$	52,988		$	49,960
Other comprehensive income, net of tax:
Unrealized loss on derivatives qualifying as hedges
Unrealized loss on cash flow hedge, net of tax of $0 and $0 for 2012 and 2011, respectively		–			–
Less: reclassification adjustment for loss on cash flow hedge included in net income, net of tax of $0 and $(18) for 2012 and 2011, respectively		–			31
Unrealized gain on available for sale securities
Unrealized gain on securities, net of tax of $0 and $1 for 2012 and 2011, respectively		(4	)		(4	)
Less: reclassification adjustment for gain on sale of securities included in net income, net of tax of $8 and $1 for 2012 and 2011, respectively		(13	)		(2	)
Other comprehensive income		(17	)		25
Comprehensive income	$	52,971		$	49,985

(In thousands)	For the Nine Months Ended September 30,
	2012			2011
Net income	$	159,839		$	137,995
Other comprehensive income, net of tax:
Unrealized loss on derivatives qualifying as hedges
Unrealized loss on cash flow hedge, net of tax of $0 and $6 for 2012 and 2011, respectively		–			(10	)
Less: reclassification adjustment for loss on cash flow hedge included in net income, net of tax of $0 and $(71) for 2012 and 2011, respectively		–			121
Unrealized gain on available for sale securities
Unrealized gain on securities, net of tax of $(8) and $(1) for 2012 and 2011, respectively		7			3
Less: reclassification adjustment for gain on sale of securities included in net income, net of tax of $8 and $1 for 2012 and 2011, respectively		(13	)		(2	)
Other comprehensive income		(6	)		112
Comprehensive income	$	159,833		$	138,107

See accompanying notes to consolidated financial statements.

3

CREDIT ACCEPTANCE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)	For the Nine Months Ended September 30,
	2012			2011
Cash Flows From Operating Activities:
Net income	$	159,839		$	137,995
Adjustments to reconcile cash provided by operating activities:
Provision for credit losses		17,716			22,394
Depreciation		3,690			3,076
Amortization		5,126			4,346
Loss on retirement of property and equipment		10			28
Provision for deferred income taxes		11,884			8,763
Stock-based compensation		8,601			1,556
Change in operating assets and liabilities:
Increase in accounts payable and accrued liabilities		2,273			15,951
Decrease in income taxes receivable		506			11,503
Increase in income taxes payable		8,498			448
Decrease (increase) in other assets		367			(3,703	)
Net cash provided by operating activities		218,510			202,357
Cash Flows From Investing Activities:
Increase in restricted cash and cash equivalents		(63,027	)		(24,676	)
Purchases of restricted securities available for sale		(100	)		(532	)
Proceeds from sale of restricted securities available for sale		905			76
Maturities of restricted securities available for sale		–			454
Principal collected on Loans receivable		882,613			748,242
Advances to Dealers		(968,725	)		(888,602	)
Purchases of Consumer Loans		(85,992	)		(94,212	)
Accelerated payments of Dealer Holdback		(34,107	)		(37,275	)
Payments of Dealer Holdback		(89,734	)		(58,734	)
Net decrease in other loans		84			797
Purchases of property and equipment		(7,091	)		(3,569	)
Net cash used in investing activities		(365,174	)		(358,031	)
Cash Flows From Financing Activities:
Borrowings under revolving secured line of credit		1,969,700			1,757,500
Repayments under revolving secured line of credit		(1,897,800	)		(1,794,800	)
Proceeds from secured financing		1,426,650			600,000
Repayments of secured financing		(1,234,081	)		(385,293	)
Principal payments under mortgage note		(184	)		(175	)
Proceeds from sale of senior notes		–			106,000
Payments of debt issuance costs		(5,973	)		(6,849	)
Repurchase of common stock		(112,946	)		(126,675	)
Proceeds from stock options exercised		519			2,781
Tax benefits from stock-based compensation plans		1,847			3,027
Net cash provided by financing activities		147,732			155,516
Net increase (decrease) in cash and cash equivalents		1,068			(158	)
Cash and cash equivalents, beginning of period		4,657			3,792
Cash and cash equivalents, end of period	$	5,725		$	3,634
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest	$	49,790		$	37,677
Cash paid during the period for income taxes	$	68,902		$	55,116

See accompanying notes to consolidated financial statements.

4

1.           BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for interim periods are not necessarily indicative of actual results achieved for full fiscal years.  The consolidated balance sheet as of December 31, 2011 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2011 for Credit Acceptance Corporation (the “Company”, “Credit Acceptance”, “we”, “our” or “us”).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

We have evaluated events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2012 for items that could potentially be recognized or disclosed in these financial statements.  We did not identify any items which would require disclosure in or adjustment to the financial statements, except as disclosed in Note 13 of these consolidated financial statements.

2.           DESCRIPTION OF BUSINESS

Since 1972, Credit Acceptance has offered automobile dealers financing programs that enable them to sell vehicles to consumers, regardless of their credit history.  Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our product, but who actually end up qualifying for traditional financing.

We refer to automobile dealers who participate in our programs and who share our commitment to changing consumers’ lives as “Dealers”.  Upon enrollment in our financing programs, the Dealer enters into a dealer servicing agreement with us that defines the legal relationship between Credit Acceptance and the Dealer.  The dealer servicing agreement assigns the responsibilities for administering, servicing, and collecting the amounts due on retail installment contracts (referred to as “Consumer Loans”) from the Dealers to us.  We are an indirect lender from a legal perspective, meaning the Consumer Loan is originated by the Dealer and assigned to us.

We have two programs: the Portfolio Program and the Purchase Program.  Under the Portfolio Program, we advance money to Dealers (referred to as a “Dealer Loan”) in exchange for the right to service the underlying Consumer Loans.  Under the Purchase Program, we buy the Consumer Loans from the Dealers (referred to as a “Purchased Loan”) and keep all amounts collected from the consumer.  Dealer Loans and Purchased Loans are collectively referred to as “Loans”.  The following table shows the percentage of Consumer Loans assigned to us based on unit volumes under each of the programs for each of the last seven quarters:

Quarter Ended	Portfolio Program		Purchase Program
March 31, 2011	92.9	%	7.1	%
June 30, 2011	92.1	%	7.9	%
September 30, 2011	92.3	%	7.7	%
December 31, 2011	92.6	%	7.4	%
March 31, 2012	93.3	%	6.7	%
June 30, 2012	93.6	%	6.4	%
September 30, 2012	93.8	%	6.2	%

5

2.           DESCRIPTION OF BUSINESS – (Continued)

Portfolio Program

As payment for the vehicle, the Dealer generally receives the following:

·   a down payment from the consumer;

·   a non-recourse cash payment (“advance”) from us; and

·   after the advance has been recovered by us, the cash from payments made on the Consumer Loan, net of certain collection costs and our servicing fee (“Dealer Holdback”).

We record the amount advanced to the Dealer as a Dealer Loan, which is classified within Loans receivable in our consolidated balance sheets.  Cash advanced to the Dealer is automatically assigned to the Dealer’s open pool of advances.  We generally require Dealers to group advances into pools of at least 100 Consumer Loans.  At the Dealer’s option, a pool containing at least 100 Consumer Loans can be closed and subsequent advances assigned to a new pool.  All advances within a Dealer’s pool are secured by the future collections on the related Consumer Loans assigned to the pool.  For Dealers with more than one pool, the pools are cross-collateralized so the performance of other pools is considered in determining eligibility for Dealer Holdback.  We perfect our security interest in the Dealer Loans by taking possession of the Consumer Loans, which list us as lien holder on the vehicle title.

The dealer servicing agreement provides that collections received by us during a calendar month on Consumer Loans assigned by a Dealer are applied on a pool-by-pool basis as follows:

·   First, to reimburse us for certain collection costs;

·   Second, to pay us our servicing fee, which generally equals 20% of collections;

·   Third, to reduce the aggregate advance balance and to pay any other amounts due from the Dealer to us; and

·   Fourth, to the Dealer as payment of Dealer Holdback.

If the collections on Consumer Loans from a Dealer’s pool are not sufficient to repay the advance balance and any other amounts due to us, the Dealer will not receive Dealer Holdback.

Dealers have an opportunity to receive an accelerated Dealer Holdback payment each time 100 Consumer Loans have been assigned to us.  The amount paid to the Dealer is calculated using a formula that considers the forecasted collections and the advance balance on the related Consumer Loans.

Since typically the combination of the advance and the consumer’s down payment provides the Dealer with a cash profit at the time of sale, the Dealer’s risk in the Consumer Loan is limited.  We cannot demand repayment of the advance from the Dealer except in the event the Dealer is in default of the dealer servicing agreement.  Advances are made only after the consumer and Dealer have signed a Consumer Loan contract, we have received the original Consumer Loan contract and supporting documentation, and we have approved all of the related stipulations for funding.  The Dealer can also opt to repurchase Consumer Loans that have been assigned to us under the Portfolio Program, at their discretion, for a fee.

For accounting purposes, the transactions described under the Portfolio Program are not considered to be loans to consumers.  Instead, our accounting reflects that of a lender to the Dealer.  The classification as a Dealer Loan for accounting purposes is primarily a result of (1) the Dealer’s financial interest in the Consumer Loan and (2) certain elements of our legal relationship with the Dealer.

Purchase Program

The Purchase Program differs from our Portfolio Program in that the Dealer receives a one-time payment from us at the time of assignment to purchase the Consumer Loan instead of a cash advance at the time of assignment and future Dealer Holdback payments.  For accounting purposes, the transactions described under the Purchase Program are considered to be originated by the Dealer and then purchased by us.

6

2.           DESCRIPTION OF BUSINESS – (Concluded)

Program Enrollment

Dealers may enroll in our program by choosing one of our two enrollment options (referred to as “Option A” and “Option B”).  In recent years, the terms of Option A have remained consistent while the terms of Option B have varied.  The following table summarizes the terms of our enrollment options:

Effective Period	Option A	Option B
Since June 1, 2011	Upfront, one-time fee of $9,850	Agreement to allow us to retain 50% of their first accelerated Dealer Holdback payment
From September 1, 2009 to May 31, 2011	Upfront, one-time fee of $9,850	Upfront, one-time fee of $1,950 and agreement to allow us to retain 50% of their first accelerated Dealer Holdback payment

For Dealers enrolling in our program, access to the Purchase Program is typically only granted after the first accelerated Dealer Holdback payment has been received under the Portfolio Program.

3.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Segment Information

We currently operate in one reportable segment which represents our core business of offering Dealers financing programs and related products and services that enable them to sell vehicles to consumers, regardless of their credit history.  The consolidated financial statements reflect the financial results of our one reportable operating segment.

Loans Receivable and Allowance for Credit Losses

Consumer Loan Assignment.  For accounting purposes, a Consumer Loan is considered to have been assigned to us after all of the following has occurred:

·   the consumer and Dealer have signed a Consumer Loan contract;

·   we have received the original Consumer Loan contract and supporting documentation;

·   we have approved all of the related stipulations for funding; and

·   we have provided funding to the Dealer in the form of either an advance under the Portfolio Program or one-time purchase payment under the Purchase Program.

Portfolio Segments and Classes. We are considered to be a lender to our Dealers for Consumer Loans assigned under our Portfolio Program and a purchaser of Consumer Loans assigned under our Purchase Program.  As a result, our Loan portfolio consists of two portfolio segments: Dealer Loans and Purchased Loans.  Each portfolio segment is comprised of one class of Consumer Loan assignments, which is Consumer Loans with deteriorated credit quality that were originated by Dealers to finance consumer purchases of vehicles and related ancillary products.

Dealer Loans.  Amounts advanced to Dealers for Consumer Loans assigned under the Portfolio Program are recorded as Dealer Loans and are aggregated by Dealer for purposes of recognizing revenue and evaluating impairment.  We account for Dealer Loans in a manner consistent with loans acquired with deteriorated credit quality.  The outstanding balance of each Dealer Loan included in Loans receivable is comprised of the following:

·   the aggregate amount of all cash advances paid;

·   finance charges;

·   Dealer Holdback payments;

·   accelerated Dealer Holdback payments; and

·   recoveries.

Less:

·   collections (net of certain collection costs); and

·   write-offs.

7

3.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)

An allowance for credit losses is maintained at an amount that reduces the net asset value (Dealer Loan balance less the allowance) to the value of forecasted future cash flows discounted at the yield established at the time of assignment.  This allowance calculation is completed for each individual Dealer.  The discounted value of future cash flows is comprised of estimated future collections on the Consumer Loans, less any estimated Dealer Holdback payments.  We write off Dealer Loans once there are no forecasted future cash flows on any of the associated Consumer Loans, which generally occurs 120 months after the last Consumer Loan assignment.

Future collections on Dealer Loans are forecasted based on the historical performance of Consumer Loans with similar characteristics, adjusted for recent trends in payment patterns.  Dealer Holdback is forecasted based on the expected future collections and current advance balance of each Dealer Loan.  Cash flows from any individual Dealer Loan are often different than estimated cash flows at the time of assignment.  If such difference is favorable, the difference is recognized prospectively into income over the remaining life of the Dealer Loan through a yield adjustment.  If such difference is unfavorable, a provision for credit losses is recorded immediately as a current period expense and a corresponding allowance for credit losses is established.  Because differences between estimated cash flows at the time of assignment and actual cash flows occur often, an allowance is required for a significant portion of our Dealer Loan portfolio.  An allowance for credit losses does not necessarily indicate that a Dealer Loan is unprofitable, and during the last several years, very seldom were cash flows from a Dealer Loan insufficient to repay the initial amounts advanced to the Dealer.

Purchased Loans.  Amounts paid to Dealers for Consumer Loans assigned under the Purchase Program are recorded as Purchased Loans and are aggregated into pools based on the month of purchase for purposes of recognizing revenue and evaluating impairment.  We account for Purchased Loans as loans acquired with deteriorated credit quality.  The outstanding balance of each Purchased Loan pool included in Loans receivable is comprised of the following:

·   the aggregate amount of all amounts paid during the month of purchase to purchase Consumer Loans from Dealers;

·   finance charges; and

·   recoveries.

Less:

·   collections (net of certain collection costs); and

·   write-offs.

An allowance for credit losses is maintained at an amount that reduces the net asset value (Purchased Loan pool balance less the allowance) to the value of forecasted future cash flows discounted at the yield established at the time of assignment.  This allowance calculation is completed for each individual monthly pool of Purchased Loans.  The discounted value of future cash flows is comprised of estimated future collections on the pool of Purchased Loans.  We write off pools of Purchased Loans once there are no forecasted future cash flows on any of the Purchased Loans included in the pool, which generally occurs 120 months after the month of purchase.

Future collections on Purchased Loans are forecasted based on the historical performance of Consumer Loans with similar characteristics, adjusted for recent trends in payment patterns.  Cash flows from any individual pool of Purchased Loans are often different than estimated cash flows at the time of assignment.  If such difference is favorable, the difference is recognized prospectively into income over the remaining life of the pool of Purchased Loans through a yield adjustment.  If such difference is unfavorable, a provision for credit losses is recorded immediately as a current period expense and a corresponding allowance for credit losses is established.

Credit Quality.  Substantially all of the Consumer Loans assigned to us are made to individuals with impaired or limited credit histories or higher debt-to-income ratios than are permitted by traditional lenders.  Consumer Loans made to these individuals generally entail a higher risk of delinquency, default and repossession and higher losses than loans made to consumers with better credit.  Since most of our revenue and cash flows are generated from these Consumer Loans, our ability to accurately forecast Consumer Loan performance is critical to our business and financial results.  At the time the Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan.  Based on these forecasts, an advance or one-time purchase payment is made to the related Dealer at a price designed to achieve an acceptable return on capital.

8

3.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)

We monitor and evaluate the credit quality of Consumer Loans on a monthly basis by comparing our current forecasted collection rates to our initial expectations.  We use a statistical model that considers a number of credit quality indicators to estimate the expected collection rate for each Consumer Loan at the time of assignment.  The credit quality indicators considered in our model include attributes contained in the consumer’s credit bureau report, data contained in the consumer’s credit application, the structure of the proposed transaction, vehicle information and other factors.  We continue to evaluate the expected collection rate of each Consumer Loan subsequent to assignment primarily through the monitoring of consumer payment behavior.  Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast.  Since all known, significant credit quality indicators have already been factored into our forecasts and pricing, we are not able to use any specific credit quality indicators to predict or explain variances in actual performance from our initial expectations.  Any variances in performance from our initial expectations are the result of Consumer Loans performing differently than historical Consumer Loans with similar characteristics.  We periodically adjust our statistical pricing model for new trends that we identify though our evaluation of these forecasted collection rate variances.

When overall forecasted collection rates underperform our initial expectations, the decline in forecasted collections has a more adverse impact on the profitability of the Purchased Loans than on the profitability of the Dealer Loans.  For Purchased Loans, the decline in forecasted collections is absorbed entirely by us.  For Dealer Loans, the decline in the forecasted collections is substantially offset by a decline in forecasted payments of Dealer Holdback.

Forecast Methodology Changes and Modifications.  For the three and nine months ended September 30, 2012 and 2011, we did not make any methodology changes or significant modifications to our forecasts of future collections on Consumer Loans that had a material impact on our financial results.

Reinsurance

VSC Re Company (“VSC Re”), our wholly-owned subsidiary, is engaged in the business of reinsuring coverage under vehicle service contracts sold to consumers by Dealers on vehicles financed by us.  VSC Re currently reinsures vehicle service contracts that are underwritten by one of our third party insurers.  Vehicle service contract premiums, which represent the selling price of the vehicle service contract to the consumer, less fees and certain administrative costs, are contributed to trust accounts controlled by VSC Re.  These premiums are used to fund claims covered under the vehicle service contracts.  VSC Re is a bankruptcy remote entity.  As such, our exposure to fund claims is limited to the trust assets controlled by VSC Re and our net investment in VSC Re.

Premiums from the reinsurance of vehicle service contracts are recognized over the life of the policy in proportion to expected costs of servicing those contracts.  Expected costs are determined based on our historical claims experience.  Claims are expensed through a provision for claims in the period the claim was incurred.  Capitalized acquisition costs are comprised of premium taxes and are amortized as general and administrative expense over the life of the contracts in proportion to premiums earned.  A summary of reinsurance activity is as follows:

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Net assumed written premiums	$	11,479	$	11,293	$	39,813	$	37,419
Net premiums earned		12,206		10,462		34,987		29,195
Provision for claims		9,122		8,363		26,704		22,733
Amortization of capitalized acquisition costs		342		288		952		747

We are considered the primary beneficiary of the trusts and as a result, the trusts have been consolidated on our balance sheet.  The trust assets and related reinsurance liabilities are as follows:

(In thousands)		As of
	Balance Sheet location	September 30, 2012		December 31, 2011
Trust assets	Restricted cash and cash equivalents	$	48,412	$	42,026
Unearned premium	Accounts payable and accrued liabilities		37,161		32,335
Claims reserve (1)	Accounts payable and accrued liabilities		1,515		1,297

(1) The claims reserve is estimated based on historical claims experience.

9

3.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)

Our determination to consolidate the VSC Re trusts was based on the following:

·   First, we determined that the trusts qualified as variable interest entities.  The trusts have insufficient equity at risk as no parties to the trusts were required to contribute assets that provide them with any ownership interest.

·   Next, we determined that we have variable interests in the trusts.  We have a residual interest in the assets of the trusts, which is variable in nature, given that it increases or decreases based upon the actual loss experience of the related service contracts.  In addition, VSC Re is required to absorb any losses in excess of the trusts’ assets.

·   Next, we evaluated the purpose and design of the trusts.  The primary purpose of the trusts is to provide third party administrators (“TPAs”) with funds to pay claims on vehicle service contracts and to accumulate and provide us with proceeds from investment income and residual funds.

·   Finally, we determined that we are the primary beneficiary of the trusts.  We control the amount of premium written and placed in the trusts through Consumer Loan assignments under our Programs, which is the activity that most significantly impacts the economic performance of the trusts.  We have the right to receive benefits from the trusts that could potentially be significant.  In addition, VSC Re has the obligation to absorb losses of the trusts that could potentially be significant.

Cash and Cash Equivalents

Cash equivalents consist of readily marketable securities with original maturities at the date of acquisition of three months or less.  As of September 30, 2012 and December 31, 2011, we had $3.5 million and $4.1 million, respectively, in cash and cash equivalents that were not insured by the Federal Deposit Insurance Corporation (“FDIC”).

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents increased to $167.7 million as of September 30, 2012 from $104.7 million as of December 31, 2011.  The following table summarizes restricted cash and cash equivalents:

(In thousands)	As of
	September 30, 2012		December 31, 2011
Cash related to secured financings	$	119,259	$	62,536
Cash held in trusts for future vehicle service contract claims (1)		48,447		42,143
Total restricted cash and cash equivalents	$	167,706	$	104,679

(1) The unearned premium and claims reserve associated with the trusts are included in accounts payable and accrued liabilities in the consolidated balance sheets.  As of September 30, 2012, the outstanding cash balance includes $48,412 related to VSC Re and $35 related to a discontinued profit sharing arrangement.  As of December 31, 2011, the outstanding cash balance includes $42,026 related to VSC Re and $117 related to a discontinued profit sharing arrangement.

As of September 30, 2012 and December 31, 2011, we had $146.7 million and $97.5 million, respectively, in restricted cash and cash equivalents that was not insured by the FDIC.

10

3.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)

Restricted Securities Available for Sale

Restricted securities available for sale consisted of amounts held in a trust in accordance with a discontinued vehicle service contract profit sharing arrangement.  We determine the appropriate classification of our investments in debt securities at the time of purchase and reevaluate such determinations at each balance sheet date.  Debt securities for which we do not have the intent or ability to hold to maturity are classified as available for sale, and stated at fair value with unrealized gains and losses, net of income taxes included in the determination of comprehensive income and reported as a component of shareholders’ equity.

Restricted securities available for sale consisted of the following:

(In thousands)	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	–	$	–	$	–		$	–
(In thousands)	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	804	$	13	$	(7	)	$	810

The cost and estimated fair values of debt securities by contractual maturity were as follows (securities with multiple maturity dates are classified in the period of final maturity). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)	As of
	September 30, 2012				December 31, 2011
	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Contractual Maturity
Within one year	$	–	$	–	$	45	$	44
Over one year to five years		–		–		759		766
Total restricted securities available for sale	$	–	$	–	$	804	$	810

Deferred Debt Issuance Costs

As of September 30, 2012 and December 31, 2011, deferred debt issuance costs were $18.8 million and $18.1 million, respectively, and are included in other assets in the consolidated balance sheets. Expenses associated with the issuance of debt instruments are capitalized and amortized as interest expense over the term of the debt instrument using the effective interest method for asset-backed secured financings (“Term ABS”) and 9.125% First Priority Senior Secured Notes due 2017 (“Senior Notes”) and the straight-line method for lines of credit and revolving secured warehouse (“Warehouse”) facilities.

11

3.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Concluded)

Derivative and Hedging Instruments

We rely on various sources of financing, some of which contain floating rates of interest and expose us to risks associated with increases in interest rates.  We manage such risk primarily by entering into interest rate cap and interest rate swap agreements (“derivative instruments”).

For derivative instruments that are designated and qualify as hedging instruments, we formally document all relationships between the hedging instruments and hedged items, as well as their risk-management objective and strategy for undertaking various hedge transactions.  This process includes linking all derivative instruments that are designated as cash flow hedges to specific assets and liabilities on the balance sheet.  We also formally assess (both at the hedge’s inception and on a quarterly basis) whether the derivative instruments that are used in hedging transactions have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivative instruments may be expected to remain highly effective in future periods.  The effective portion of changes in the fair value of the derivative instruments is recorded in other comprehensive income, net of income taxes.  If it is determined that a derivative instrument is not (or has ceased to be) highly effective as a hedge, we would discontinue hedge accounting prospectively and the ineffective portion of changes in fair value would be recorded in interest expense.  For derivative instruments not designated as hedges, changes in the fair value of these agreements increase or decrease interest expense.

We recognize derivative instruments as either other assets or accounts payable and accrued liabilities on our consolidated balance sheets.  For additional information regarding our derivative and hedging instruments, see Note 6 to the consolidated financial statements.

New Accounting Updates

Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.  In October 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-26, which amends Topic 944 (Financial Services – Insurance).  ASU No. 2010-26 is intended to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. The amendments specify which costs incurred in the acquisition of new and renewal contracts should be capitalized.  ASU No. 2010-26 is effective for fiscal years beginning after December 15, 2011. While the guidance in this ASU is required to be applied prospectively upon adoption, retrospective application is also permitted (to all prior periods presented). Early adoption is also permitted, but only at the beginning of an entity’s annual reporting period.  The adoption of ASU No. 2010-26 on January 1, 2012 did not have a material impact on our consolidated financial statements.

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. In May 2011, the FASB issued ASU No. 2011-04 which amends Topic 820 (Fair Value Measurement). ASU No. 2011-04 is intended to provide a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. The amendments in ASU No. 2011-04 include changes regarding how and when the valuation premise of highest and best use applies, the application of premiums and discounts, and new required disclosures. ASU No. 2011-04 is to be applied prospectively upon adoption and is effective for interim and annual periods beginning after December 15, 2011 with early adoption prohibited. The adoption of ASU No. 2011-04 on January 1, 2012 did not have a material impact on our consolidated financial statements, but expanded our disclosures related to fair value measurements.

4.           LOANS RECEIVABLE

Loans receivable consists of the following:

(In thousands)	As of September 30, 2012
	Dealer Loans			Purchased Loans			Total
Loans receivable	$	1,807,701		$	239,780		$	2,047,481
Allowance for credit losses		(161,284	)		(9,479	)		(170,763	)
Loans receivable, net	$	1,646,417		$	230,301		$	1,876,718
(In thousands)	As of December 31, 2011
	Dealer Loans			Purchased Loans			Total
Loans receivable	$	1,506,539		$	246,352		$	1,752,891
Allowance for credit losses		(141,712	)		(12,606	)		(154,318	)
Loans receivable, net	$	1,364,827		$	233,746		$	1,598,573

12

4.           LOANS RECEIVABLE – (Continued)

A summary of changes in Loans receivable is as follows:

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,736,578		$	241,216		$	1,977,794
New Consumer Loan assignments (1)		293,379			25,238			318,617
Principal collected on Loans receivable		(252,398	)		(32,617	)		(285,015	)
Accelerated Dealer Holdback payments		9,884			–			9,884
Dealer Holdback payments		27,118			–			27,118
Transfers (2)		(5,946	)		5,946			–
Write-offs		(1,480	)		(26	)		(1,506	)
Recoveries (3)		582			23			605
Net change in other loans		(16	)		–			(16	)
Balance, end of period	$	1,807,701		$	239,780		$	2,047,481
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,331,973		$	250,932		$	1,582,905
New Consumer Loan assignments (1)		278,395			30,717			309,112
Principal collected on Loans receivable		(216,860	)		(36,970	)		(253,830	)
Accelerated Dealer Holdback payments		12,859			–			12,859
Dealer Holdback payments		23,985			–			23,985
Transfers (2)		(2,933	)		2,933			–
Write-offs		(736	)		(68	)		(804	)
Recoveries (3)		442			21			463
Net change in other loans		(259	)		–			(259	)
Balance, end of period	$	1,426,866		$	247,565		$	1,674,431

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,506,539		$	246,352		$	1,752,891
New Consumer Loan assignments (1)		968,725			85,992			1,054,717
Principal collected on Loans receivable		(774,361	)		(108,252	)		(882,613	)
Accelerated Dealer Holdback payments		34,107			–			34,107
Dealer Holdback payments		89,734			–			89,734
Transfers (2)		(16,150	)		16,150			–
Write-offs		(2,483	)		(532	)		(3,015	)
Recoveries (3)		1,674			70			1,744
Net change in other loans		(84	)		–			(84	)
Balance, end of period	$	1,807,701		$	239,780		$	2,047,481
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,082,039		$	262,842		$	1,344,881
New Consumer Loan assignments (1)		888,602			94,212			982,814
Principal collected on Loans receivable		(628,406	)		(119,836	)		(748,242	)
Accelerated Dealer Holdback payments		37,275			–			37,275
Dealer Holdback payments		58,734			–			58,734
Transfers (2)		(10,490	)		10,490			–
Write-offs		(1,563	)		(207	)		(1,770	)
Recoveries (3)		1,472			64			1,536
Net change in other loans		(797	)		–			(797	)
Balance, end of period	$	1,426,866		$	247,565		$	1,674,431

(1) The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program.  The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

(2) Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s outstanding Dealer Loan balance to Purchased Loans in the period this forfeiture occurs.

(3)      Represents collections received on previously written off Loans.  

13

4.           LOANS RECEIVABLE – (Continued)

Contractual net cash flows are comprised of the contractual repayments of the underlying Consumer Loans for Dealer and Purchased Loans, less the related Dealer Holdback payments for Dealer Loans.  The difference between the contractual net cash flows and the expected net cash flows is referred to as the nonaccretable difference.  This difference is neither accreted into income nor recorded in our balance sheets.  We do not believe that the contractual net cash flows of our Loan portfolio are relevant in assessing our financial position.  We are contractually owed repayments on many Consumer Loans, primarily those older than 120 months, where we are not forecasting any future net cash flows.

The excess of expected net cash flows over the carrying value of the Loans is referred to as the accretable yield and is recognized on a level-yield basis as finance charge income over the remaining lives of the Loans.  A summary of changes in the accretable yield is as follows:

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	581,693		$	119,493		$	701,186
New Consumer Loan assignments (1)		127,728			10,790			138,518
Finance charge income		(117,780	)		(19,715	)		(137,495	)
Forecast changes		6,880			1,265			8,145
Transfers (2)		(2,580	)		4,240			1,660
Balance, end of period	$	595,941		$	116,073		$	712,014
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	462,478		$	123,561		$	586,039
New Consumer Loan assignments (1)		122,010			14,125			136,135
Finance charge income		(96,577	)		(21,328	)		(117,905	)
Forecast changes		5,211			2,791			8,002
Transfers (2)		(1,349	)		2,182			833
Balance, end of period	$	491,773		$	121,331		$	613,104

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	508,046		$	120,082		$	628,128
New Consumer Loan assignments (1)		416,159			38,227			454,386
Finance charge income		(337,231	)		(60,332	)		(397,563	)
Forecast changes		16,322			6,406			22,728
Transfers (2)		(7,355	)		11,690			4,335
Balance, end of period	$	595,941		$	116,073		$	712,014
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	351,569		$	124,520		$	476,089
New Consumer Loan assignments (1)		395,111			46,627			441,738
Finance charge income		(273,300	)		(64,938	)		(338,238	)
Forecast changes		23,440			6,659			30,099
Transfers (2)		(5,047	)		8,463			3,416
Balance, end of period	$	491,773		$	121,331		$	613,104

(1) The Dealer Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related advances paid to Dealers.  The Purchased Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Purchase Program, less the related one-time payments made to Dealers.

(2) Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s outstanding Dealer Loan balance and related expected future net cash flows to Purchased Loans in the period this forfeiture occurs.

14

4.           LOANS RECEIVABLE – (Continued)

Additional information related to new Consumer Loan assignments is as follows:

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans		Purchased Loans		Total
Contractual net cash flows at the time of assignment (1)	$	454,859	$	50,278	$	505,137
Expected net cash flows at the time of assignment (2)		421,107		36,028		457,135
Fair value at the time of assignment (3)		293,379		25,238		318,617
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans		Purchased Loans		Total
Contractual net cash flows at the time of assignment (1)	$	431,399	$	61,382	$	492,781
Expected net cash flows at the time of assignment (2)		400,405		44,842		445,247
Fair value at the time of assignment (3)		278,395		30,717		309,112

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans		Purchased Loans		Total
Contractual net cash flows at the time of assignment (1)	$	1,495,980	$	173,176	$	1,669,156
Expected net cash flows at the time of assignment (2)		1,384,884		124,219		1,509,103
Fair value at the time of assignment (3)		968,725		85,992		1,054,717
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans		Purchased Loans		Total
Contractual net cash flows at the time of assignment (1)	$	1,378,850	$	191,814	$	1,570,664
Expected net cash flows at the time of assignment (2)		1,283,713		140,839		1,424,552
Fair value at the time of assignment (3)		888,602		94,212		982,814

(1) The Dealer Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we would be required to make if we collected all of the contractual repayments.  The Purchased Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Purchase Program.

(2) The Dealer Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make.  The Purchased Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program.

(3) The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program.  The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

15

4.           LOANS RECEIVABLE – (Continued)

Credit Quality

We monitor and evaluate the credit quality of Consumer Loans assigned under our Portfolio and Purchase Programs on a monthly basis by comparing our current forecasted collection rates to our initial expectations.  For additional information regarding credit quality, see Note 3 to the consolidated financial statements.  The following table compares our forecast of Consumer Loan collection rates as of September 30, 2012, with the forecasts as of June 30, 2012, as of December 31, 2011, and at the time of assignment, segmented by year of assignment:

	Forecasted Collection Percentage as of (1)								Variance in Forecasted Collection Percentage from
Consumer Loan Assignment Year	September 30, 2012		June 30, 2012		December 31, 2011		Initial Forecast		June 30, 2012		December 31, 2011		Initial Forecast
2003	73.8	%	73.8	%	73.7	%	72.0	%	0.0	%	0.1	%	1.8	%
2004	73.0	%	73.0	%	73.0	%	73.0	%	0.0	%	0.0	%	0.0	%
2005	73.5	%	73.6	%	73.6	%	74.0	%	-0.1	%	-0.1	%	-0.5	%
2006	70.0	%	70.0	%	70.0	%	71.4	%	0.0	%	0.0	%	-1.4	%
2007	68.1	%	68.1	%	68.1	%	70.7	%	0.0	%	0.0	%	-2.6	%
2008	70.3	%	70.3	%	70.0	%	69.7	%	0.0	%	0.3	%	0.6	%
2009	79.5	%	79.6	%	79.4	%	71.9	%	-0.1	%	0.1	%	7.6	%
2010	77.2	%	77.1	%	76.8	%	73.6	%	0.1	%	0.4	%	3.6	%
2011	73.7	%	73.6	%	73.2	%	72.5	%	0.1	%	0.5	%	1.2	%
2012 (2)	71.6	%	71.9	%	–		71.1	%	-0.3	%	–		0.5	%

(1)   Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment.  Contractual repayments include both principal and interest.

(2)   The forecasted collection rate for 2012 Consumer Loans as of September 30, 2012 includes both Consumer Loans that were in our portfolio as of June 30, 2012 and Consumer Loans assigned during the most recent quarter.  The following table provides forecasted collection rates for each of these segments:

	Forecasted Collection Percentage as of
2012 Consumer Loan Assignment Period	September 30, 2012		June 30, 2012		Variance
January 1, 2012 through June 30, 2012	72.0	%	71.9	%	0.1	%
July 1, 2012 through September 30, 2012	70.6	%	–		–

Advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program are aggregated into pools for purposes of recognizing revenue and evaluating impairment.  As a result of this aggregation, we are not able to segment the carrying value of the majority of our Loan portfolio by year of assignment.  The following table summarizes Loan pools based on the performance of the underlying pool of Consumer Loans:

(In thousands)	As of September 30, 2012
	Loan Pool Performance Meets or Exceeds Initial Estimates						Loan Pool Performance Less than Initial Estimates
	Dealer Loans		Purchased Loans		Total		Dealer Loans			Purchased Loans			Total
Loans receivable	$	572,223	$	196,367	$	768,590	$	1,235,479		$	43,413		$	1,278,892
Allowance for credit losses		–		–		–		(161,284	)		(9,479	)		(170,763	)
Loans receivable, net	$	572,223	$	196,367	$	768,590	$	1,074,195		$	33,934		$	1,108,129
(In thousands)	As of December 31, 2011
	Loan Pool Performance Meets or Exceeds Initial Estimates						Loan Pool Performance Less than Initial Estimates
	Dealer Loans		Purchased Loans		Total		Dealer Loans			Purchased Loans			Total
Loans receivable	$	511,926	$	192,502	$	704,428	$	994,613		$	53,850		$	1,048,463
Allowance for credit losses		–		–		–		(141,712	)		(12,606	)		(154,318	)
Loans receivable, net	$	511,926	$	192,502	$	704,428	$	852,901		$	41,244		$	894,145

16

4.           LOANS RECEIVABLE – (Concluded)

A summary of changes in the allowance for credit losses is as follows:

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	152,031		$	9,874		$	161,905
Provision for credit losses		10,151			(392	)		9,759
Write-offs		(1,480	)		(26	)		(1,506	)
Recoveries (1)		582			23			605
Balance, end of period	$	161,284		$	9,479		$	170,763
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	131,728		$	13,091		$	144,819
Provision for credit losses		4,723			(173	)		4,550
Write-offs		(736	)		(68	)		(804	)
Recoveries (1)		442			21			463
Balance, end of period	$	136,157		$	12,871		$	149,028

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	141,712		$	12,606		$	154,318
Provision for credit losses		20,381			(2,665	)		17,716
Write-offs		(2,483	)		(532	)		(3,015	)
Recoveries (1)		1,674			70			1,744
Balance, end of period	$	161,284		$	9,479		$	170,763
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	113,227		$	13,641		$	126,868
Provision for credit losses		23,021			(627	)		22,394
Write-offs		(1,563	)		(207	)		(1,770	)
Recoveries (1)		1,472			64			1,536
Balance, end of period	$	136,157		$	12,871		$	149,028

(1) Represents collections received on previously written off Loans.

17

5.           DEBT

We currently utilize the following primary forms of debt financing: (1) a revolving secured line of credit; (2) Warehouse facilities; (3) Term ABS financings and (4) Senior Notes.  General information for each of our financing transactions in place as of September 30, 2012 is as follows:

(Dollars in thousands)
Financings	Wholly-owned Subsidiary	Close Date	Maturity Date		Financing Amount		Interest Rate as of September 30, 2012
Revolving Secured Line of Credit	n/a	06/15/2012	06/22/2015		$	235,000	At our option, either LIBOR plus 187.5 basis points or the prime rate plus 87.5 basis points
Warehouse Facility II (1)	CAC Warehouse Funding Corp. II	06/17/2011	06/17/2014	(2)	$	325,000	Commercial paper rate plus 275 basis points or LIBOR plus 375 basis points (3) (4)
Warehouse Facility III (1)	CAC Warehouse Funding III, LLC	06/29/2012	09/10/2015	(5)	$	75,000	LIBOR plus 160 basis points (4)
Warehouse Facility IV (1)	CAC Warehouse Funding LLC IV	08/19/2011	02/19/2014	(2)	$	75,000	LIBOR plus 275 basis points (4)
Term ABS 2010-1 (1)	Credit Acceptance Funding LLC 2010-1	11/04/2010	10/15/2012	(2)	$	100,500	Fixed rate
Term ABS 2011-1 (1)	Credit Acceptance Funding LLC 2011-1	10/06/2011	09/16/2013	(2)	$	200,500	Fixed rate
Term ABS 2012-1 (1)	Credit Acceptance Funding LLC 2012-1	03/29/2012	03/17/2014	(2)	$	201,250	Fixed rate
Term ABS 2012-2 (1)	Credit Acceptance Funding LLC 2012-2	09/20/2012	09/15/2014	(2)	$	252,000	Fixed rate
Senior Notes	n/a	(6)	02/01/2017		$	350,000	Fixed rate

(1) Financing made available only to a specified subsidiary of the Company.

(2) Represents the revolving maturity date.  The outstanding balance will amortize after the maturity date based on the cash flows of the pledged assets.

(3) The LIBOR rate is used if funding is not available from the commercial paper market.

(4) Interest rate cap agreements are in place to limit the exposure to increasing interest rates.

(5) Represents the revolving maturity date.  The outstanding balance will amortize after the revolving maturity date and any amounts remaining on September 10, 2017 will be due.

(6) The close dates associated with the issuance of $250.0 million and $100.0 million of the Senior Notes were on February 1, 2010 and March 3, 2011, respectively.

18

5.           DEBT – (Continued)

Additional information related to the amounts outstanding on each facility is as follows:

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Revolving Secured Line of Credit
Maximum outstanding balance	$	139,000	$	165,400	$	187,300	$	165,400
Average outstanding balance		100,133		113,098		98,876		108,262
Warehouse Facility II
Maximum outstanding balance	$	173,800	$	264,000	$	177,200	$	264,000
Average outstanding balance		143,733		215,522		128,606		184,224
Warehouse Facility III
Maximum outstanding balance	$	62,000	$	75,000	$	73,000	$	75,000
Average outstanding balance		51,423		73,587		60,760		47,436
Warehouse Facility IV
Maximum outstanding balance	$	39,200	$	43,500	$	39,600	$	43,500
Average outstanding balance		37,809		41,895		37,847		41,895

19

5.           DEBT – (Continued)

(Dollars in thousands)	As of
	September 30, 2012			December 31, 2011
Revolving Secured Line of Credit
Balance outstanding	$	115,800		$	43,900
Amount available for borrowing (1)		119,200			161,100
Interest rate		2.09	%		2.55	%
Warehouse Facility II
Balance outstanding	$	–		$	163,200
Amount available for borrowing  (1)		325,000			161,800
Loans pledged as collateral		–			242,119
Restricted cash and cash equivalents pledged as collateral		1,626			6,117
Interest rate		2.96	%		2.99	%
Warehouse Facility III
Balance outstanding	$	–		$	70,000
Amount available for borrowing (1)		75,000			5,000
Loans pledged as collateral		–			91,601
Restricted cash and cash equivalents pledged as collateral		538			3,321
Interest rate		1.82	%		1.89	%
Warehouse Facility IV
Balance outstanding	$	37,600		$	37,500
Amount available for borrowing (1)		37,400			37,500
Loans pledged as collateral		49,003			62,260
Restricted cash and cash equivalents pledged as collateral		2,843			2,188
Interest rate		2.97	%		3.05	%
Term ABS 2009-1
Balance outstanding	$	–		$	27,581
Loans pledged as collateral		–			105,209
Restricted cash and cash equivalents pledged as collateral		–			13,526
Interest rate		–			5.68	%
Term ABS 2010-1
Balance outstanding	$	100,500		$	100,500
Loans pledged as collateral		123,609			125,541
Restricted cash and cash equivalents pledged as collateral		14,288			14,116
Interest rate		2.36	%		2.36	%
Term ABS 2011-1
Balance outstanding	$	200,500		$	200,500
Loans pledged as collateral		244,531			248,167
Restricted cash and cash equivalents pledged as collateral		25,300			23,268
Interest rate		2.90	%		2.90	%
Term ABS 2012-1
Balance outstanding	$	201,250		$	–
Loans pledged as collateral		246,756			–
Restricted cash and cash equivalents pledged as collateral		23,561			–
Interest rate		2.38	%		–
Term ABS 2012-2
Balance outstanding	$	252,000		$	–
Loans pledged as collateral		312,152			–
Restricted cash and cash equivalents pledged as collateral		51,103			–
Interest rate		1.63	%		–
Senior Notes
Balance outstanding (2)	$	350,307		$	350,378
Interest rate		9.13	%		9.13	%

(1)   Availability may be limited by the amount of assets pledged as collateral.

(2)   As of September 30, 2012 and December 31, 2011, the outstanding balance presented for the Senior Notes includes a net unamortized debt premium of $0.3 million and $0.4 million, respectively.

20

5.           DEBT – (Continued)

Revolving Secured Line of Credit Facility

We have a $235.0 million revolving secured line of credit facility with a commercial bank syndicate.

During the second quarter of 2012, we extended the maturity of our revolving secured line of credit facility from June 22, 2014 to June 22, 2015.  Additionally, the amount of the facility was increased from $205.0 million to $235.0 million.  The interest rate on borrowings under the facility was decreased from the prime rate plus 1.25% or the LIBOR rate plus 2.25%, at our option, to the prime rate plus 0.875% or the LIBOR rate plus 1.875%, at our option.

Borrowings under the revolving secured line of credit facility, including any letters of credit issued under the facility, are subject to a borrowing-base limitation.  This limitation equals 80% of the net book value of Loans, less a hedging reserve (not exceeding $1.0 million), and the amount of other debt secured by the collateral which secures the revolving secured line of credit facility.  Borrowings under the revolving secured line of credit facility agreement are secured by a lien on most of our assets.

Warehouse Facilities

We have three Warehouse facilities with total borrowing capacity of $475.0 million.  Each of the facilities are with different institutional investors, and the facility limit is $325.0 million for Warehouse Facility II and $75.0 million for both Warehouse Facility III and IV.

During the second quarter of 2012, we extended the date on which Warehouse III will cease to revolve from September 10, 2013 to September 10, 2015.  The maturity of the facility was also extended from September 10, 2014 to September 10, 2017.  There were no other material changes to the terms of the facility.

Under each Warehouse facility, we can contribute Loans to our wholly-owned subsidiaries in return for cash and equity in each subsidiary.  In turn, each subsidiary pledges the Loans as collateral to institutional investors to secure financing that will fund the cash portion of the purchase price of the Loans.  The financing provided to each subsidiary under the applicable facility is limited to the lesser of 80% of the net book value of the contributed Loans plus the cash collected on such Loans or the facility limit.

The financings create indebtedness for which the subsidiaries are liable and which is secured by all the assets of each subsidiary.  Such indebtedness is non-recourse to us, even though we are consolidated for financial reporting purposes with the subsidiaries.  Because the subsidiaries are organized as legal entities separate from us, their assets (including the contributed Loans) are not available to our creditors.

The subsidiaries pay us a monthly servicing fee equal to 6% of the collections received with respect to the contributed Loans.  The fee is paid out of the collections.  Except for the servicing fee and holdback payments due to Dealers, if a facility is amortizing, we do not have any rights in any portion of such collections until all outstanding principal, accrued and unpaid interest, fees and other related costs have been paid in full.  If a facility is not amortizing, the applicable subsidiary may be entitled to retain a portion of such collections provided that the borrowing base requirements of the facility are satisfied.

Term ABS Financings

In 2009, 2010, 2011 and 2012, five of our wholly-owned subsidiaries (the “Funding LLCs”), completed secured financing transactions with qualified institutional investors.  In connection with these transactions, we contributed Loans on an arms-length basis to each Funding LLC for cash and the sole membership interest in that Funding LLC.  In turn, each Funding LLC contributed the Loans to a respective trust that issued notes to qualified institutional investors.  The Term ABS 2009-1 ceased to revolve on May 15, 2011 and was paid in full during the first quarter of 2012.  The Term ABS 2010-1, 2011-1, 2012-1 and 2012-2 transactions each consist of three classes of notes.  The Class A and Class B Notes for each Term ABS financing bear interest.  The Class C Notes for each Term ABS financing do not bear interest and have been retained by us.

21

5.           DEBT – (Continued)

Each financing at the time of issuance has a specified revolving period during which we may be required, and are likely, to contribute additional Loans to each Funding LLC.  Each Funding LLC will then contribute the Loans to their respective trust.  At the end of the revolving period, the debt outstanding under each financing will begin to amortize.

The financings create indebtedness for which the trusts are liable and which is secured by all the assets of each trust.  Such indebtedness is non-recourse to us, even though we are consolidated for financial reporting purposes with the trusts and the Funding LLCs.  Because the Funding LLCs are organized as legal entities separate from us, their assets (including the contributed Loans) are not available to our creditors.  We receive a monthly servicing fee on each financing equal to 6% of the collections received with respect to the contributed Loans.  The fee is paid out of the collections.  Except for the servicing fee and Dealer Holdback payments due to Dealers, if a facility is amortizing, we do not have any rights in any portion of such collections until all outstanding principal, accrued and unpaid interest, fees and other related costs have been paid in full.  If a facility is not amortizing, the applicable subsidiary may be entitled to retain a portion of such collections provided that the borrowing base requirements of the facility are satisfied.  However, in our capacity as servicer of the  Loans, we do have a limited right to exercise a “clean-up call” option to purchase Loans from the Funding LLCs and/or the trusts under certain specified circumstances.  Alternatively, when a trust’s underlying indebtedness is paid in full, either through collections or through a prepayment of the indebtedness, the trust is to pay any remaining collections over to its Funding LLC as the sole beneficiary of the trust.  The collections will then be available to be distributed to us as the sole member of the respective Funding LLC.

The table below sets forth certain additional details regarding the outstanding Term ABS Financings:

(Dollars in thousands)
Term ABS Financings	Close Date	Net Book Value of Loans Contributed at Closing		Revolving Period
Term ABS 2010-1	November 4, 2010	$	126,751	24 months (Through October 15, 2012)
Term ABS 2011-1	October 6, 2011	$	250,827	24 months (Through September 16, 2013)
Term ABS 2012-1	March 29, 2012	$	251,681	24 months (Through March 17, 2014)
Term ABS 2012-2	September 20, 2012	$	315,120	24 months (Through September 15, 2014)

Senior Notes

We have outstanding $350.0 million aggregate principal amount of our 9.125% First Priority Senior Secured Notes due 2017, $100.0 million of which we issued on March 3, 2011 and $250.0 million of which we issued on February 1, 2010.  The Senior Notes are governed by an indenture, dated as of February 1, 2010, as amended and supplemented (the “Indenture”), among us, as the issuer; our subsidiaries Buyers Vehicle Protection Plan, Inc. and Vehicle Remarketing Services, Inc., as guarantors (the “Guarantors”); and U.S. Bank National Association, as trustee.  The Senior Notes issued on March 3, 2011 have the same terms as the previously issued Senior Notes, other than issue price and issue date, and all of the Senior Notes are treated as a single class under the Indenture.

The Senior Notes mature on February 1, 2017 and bear interest at a rate of 9.125% per annum, computed on the basis of a 360-day year comprised of twelve 30-day months and payable semi-annually on February 1 and August 1 of each year.  The Senior Notes issued on March 3, 2011 were issued at a price of 106.0% of their aggregate principal amount, resulting in gross proceeds of $106.0 million, and a yield to maturity of 7.83% per annum.  The Senior Notes issued on February 1, 2010 were issued at a price of 97.495% of their aggregate principal amount, resulting in gross proceeds of $243.7 million, and a yield to maturity of 9.625% per annum.  The premium with respect to the Senior Notes issued on March 3, 2011 and the discount with respect to the Senior Notes issued on February 1, 2010 are being amortized over the life of the Senior Notes using the effective interest method.

The Senior Notes are guaranteed on a senior secured basis by the Guarantors, which are also guarantors of obligations under our revolving secured line of credit facility.  Other existing and future subsidiaries of ours may become guarantors of the Senior Notes.  The Senior Notes and the Guarantors’ Senior Note guarantees are secured on a first-priority basis (subject to specified exceptions and permitted liens), together with all indebtedness outstanding from time to time under the revolving secured line of credit facility and, under certain circumstances, certain future indebtedness, by a security interest in substantially all of our assets and those of the Guarantors, subject to certain exceptions such as real property, cash (except to the extent it is deposited with the collateral agent), certain leases, and equity interests of our subsidiaries (other than those of specified subsidiaries including the Guarantors).  Our assets and those of the Guarantors securing the Senior Notes and the Senior Note guarantees will not include our assets transferred to special purpose subsidiaries in connection with Warehouse facilities and Term ABS financings and will generally be the same as the collateral securing indebtedness under the revolving secured line of credit facility and, under certain circumstances, certain future indebtedness, subject to certain limited exceptions as provided in the security and intercreditor agreements related to the revolving secured line of credit facility.

22

5.           DEBT – (Concluded)

Debt Covenants

As of September 30, 2012, we were in compliance with all our debt covenants relating to the revolving secured line of credit facility, including those that require the maintenance of certain financial ratios and other financial conditions.  These covenants require a minimum ratio of our earnings before interest, taxes and non-cash expenses to fixed charges.  These covenants also limit the maximum ratio of our funded debt to tangible net worth.  Additionally, we must maintain consolidated net income of not less than $1 for the two most recently ended fiscal quarters.  Some of these debt covenants may indirectly limit the repurchase of common stock or payment of dividends on common stock.

Our Warehouse facilities and Term ABS financings also contain covenants that measure the performance of the contributed assets.  As of September 30, 2012, we were in compliance with all such covenants.  As of the end of the quarter, we were also in compliance with our covenants under the Indenture.  The Indenture includes covenants that limit the maximum ratio of our funded debt to tangible net worth and also require a minimum collateral coverage ratio.

6.           DERIVATIVE AND HEDGING INSTRUMENTS

Interest Rate Caps.  We utilize interest rate cap agreements to manage the interest rate risk on our Warehouse facilities.  The following tables provide the terms of our interestrate cap agreements that were in effect as of September 30, 2012 and December 31, 2011:

As of September 30, 2012
Facility (in millions)		Facility Name	Purpose	Start	End	Notional (in millions)			Cap Interest Rate (1)
$	325.0	Warehouse Facility II	Cap Floating Rate	07/2011	06/2013	$	325.0		6.75	%
	75.0	Warehouse Facility III	Cap Floating Rate	09/2010	09/2013		37.5		6.75	%
	75.0	Warehouse Facility III	Cap Floating Rate	06/2012	07/2015		18.8	(2)	5.00	%
	75.0	Warehouse Facility IV	Cap Floating Rate	08/2011	03/2014		75.0		5.50	%

As of December 31, 2011
Facility (in millions)		Facility Name	Purpose	Start	End	Notional (in millions)		Cap Interest Rate (1)
$	325.0	Warehouse Facility II	Cap Floating Rate	09/2010	06/2013	$	325.0	6.75	%
	75.0	Warehouse Facility III	Cap Floating Rate	09/2010	09/2013		37.5	6.75	%
	75.0	Warehouse Facility IV	Cap Floating Rate	08/2011	03/2014		75.0	5.50	%

(1)   Rate excludes the spread over the LIBOR rate or the commercial paper rate, as applicable.

(2)   The notional amount increases to $56.3 million in September 2013 when the original Warehouse Facility III interest rate cap for $37.5 million ends.

The interest rate caps have not been designated as hedging instruments.

Information related to the fair values of derivative instruments in our consolidated balance sheets as of September 30, 2012 and December 31, 2011 is as follows:

(In thousands)		Fair Value as of
	Balance Sheet location	September 30, 2012		December 31, 2011
Derivatives not designated as hedging instruments
Asset Derivatives
Interest rate caps	Other assets	$	18	$	16

23

6.           DERIVATIVE AND HEDGING INSTRUMENTS – (Concluded)

Information related to the effect of derivative instruments designated as hedging instruments in our consolidated financial statements for the three and nine months ended September 30, 2012 and 2011 is as follows:

(In thousands)
Derivatives in Cash Flow Hedging Relationships	(Loss) / Gain Recognized in OCI on Derivative (Effective Portion)					(Loss) / Gain Reclassified from Accumulated OCI into Income (Effective Portion)
	For the Three Months Ended September 30,						For the Three Months Ended September 30,
	2012		2011			Location	2012		2011
Interest rate swap	$	–	$	–		Interest expense	$	–	$	(49	)
(In thousands)
Derivatives in Cash Flow Hedging Relationships	(Loss) / Gain Recognized in OCI on Derivative (Effective Portion)					(Loss) / Gain Reclassified from Accumulated OCI into Income (Effective Portion)
	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
		2012		2011		Location		2012		2011
Interest rate swap	$	–	$	(16	)	Interest expense	$	–	$	(192	)

Information related to the effect of derivative instruments not designated as hedging instruments on our consolidated statements of income for the three and nine months ended September 30, 2012 and 2011 is as follows:

(In thousands)
		Amount of (Loss) / Gain Recognized in Income on Derivatives						Amount of (Loss) / Gain Recognized in Income on Derivatives
		For the Three Months Ended September 30,						For the Nine Months Ended September 30,
Derivatives Not Designated as Hedging Instruments	Location	2012			2011			2012			2011
Interest rate caps	Interest expense	$	(7	)	$	(61	)	$	(66	)	$	(202	)

7.           FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate their value.

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents.  The carrying amount of cash and cash equivalents and restricted cash and cash equivalents approximate their fair value due to the short maturity of these instruments.

Restricted Securities Available for Sale.  Restricted securities consist of amounts held in trusts by TPAs to pay claims on vehicle service contracts.  Securities for which we do not have the intent or ability to hold to maturity are classified as available for sale and stated at fair value.  The fair value of restricted securities are based on quoted market values.

Net Investment in Loans Receivable.  Loans receivable, net represents our net investment in Loans.  The fair value is determined by calculating the present value of future Loan payment inflows and Dealer Holdback outflows estimated by us utilizing a discount rate comparable with the rate used to calculate our allowance for credit losses.

Derivative Instruments.  The fair value of interest rate caps and interest rate swaps are based on quoted prices for similar instruments in active markets, which are influenced by a number of factors, including interest rates, notional amount of the derivative, and number of months until maturity.

Liabilities.  The fair value of our Senior Notes is determined using quoted market prices in an active market.  The fair value of our Term ABS financings is also determined using quoted market prices, however, these instruments trade in a market with much lower trading volume.  For our Revolving Secured Line of Credit, our Warehouse Facilities and our mortgage note, the fair values are calculated using the estimated value of each debt instrument based on current rates for debt with similar risk profiles and maturities.

24

7.           FAIR VALUE OF FINANCIAL INSTRUMENTS – (Continued)

A comparison of the carrying value and estimated fair value of these financial instruments is as follows:

(In thousands)
	As of September 30, 2012				As of December 31, 2011
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Cash and cash equivalents	$	5,725	$	5,725	$	4,657	$	4,657
Restricted cash and cash equivalents		167,706		167,706		104,679		104,679
Restricted securities available for sale		–		–		810		810
Net investment in Loans receivable		1,876,718		1,895,056		1,598,573		1,615,009
Derivative instruments		18		18		16		16
Liabilities
Revolving secured line of credit	$	115,800	$	115,800	$	43,900	$	43,900
Secured financing		791,850		801,226		599,281		598,622
Mortgage note		4,104		4,104		4,288		4,288
Senior notes		350,307		385,875		350,378		365,500

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.  We group assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.  These levels are:

Level 1 Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2 Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market.  These unobservable assumptions reflect estimates or assumptions that market participants would use in pricing the asset or liability.

25

7.           FAIR VALUE OF FINANCIAL INSTRUMENTS – (Concluded)

The following table provides the level of measurement used to determine the fair value for each of our financial instruments on a recurring basis, as of September 30, 2012 and December 31, 2011:

(In thousands)
	As of September 30, 2012
	Level 1		Level 2		Level 3		Total Fair Value
Assets
Cash and cash equivalents	$	5,725	$	–	$	–	$	5,725
Restricted cash and cash equivalents		167,706		–		–		167,706
Restricted securities available for sale		–		–		–		–
Net investment in Loans receivable		–		–		1,895,056		1,895,056
Derivative instruments		–		18		–		18
Liabilities
Revolving secured line of credit	$	–	$	115,800	$	–	$	115,800
Secured financing		–		801,226		–		801,226
Mortgage note		–		4,104		–		4,104
Senior notes		385,875		–		–		385,875
(In thousands)
	As of December 31, 2011
	Level 1		Level 2		Level 3		Total Fair Value
Assets
Cash and cash equivalents	$	4,657	$	–	$	–	$	4,657
Restricted cash and cash equivalents		104,679		–		–		104,679
Restricted securities available for sale		810		–		–		810
Net investment in Loans receivable		–		–		1,615,009		1,615,009
Derivative instruments		–		16		–		16
Liabilities
Revolving secured line of credit	$	–	$	43,900	$	–	$	43,900
Secured financing		–		598,622		–		598,622
Mortgage note		–		4,288		–		4,288
Senior notes		365,500		–		–		365,500

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8.           RELATED PARTY TRANSACTIONS

In the normal course of our business, affiliated Dealers assign Consumer Loans to us under the Portfolio and Purchase Programs.  Dealer Loans and Purchased Loans with affiliated Dealers are on the same terms as those with non-affiliated Dealers.  Affiliated Dealers are comprised of Dealers owned or controlled by: (1) our Chairman and significant shareholder; and (2) a member of the Chairman’s immediate family.

Affiliated Dealer Loan balances were $5.6 million and $4.9 million as of September 30, 2012 and December 31, 2011, respectively.  As of September 30, 2012 and December 31, 2011, affiliated Dealer Loan balances were 0.3% of total consolidated Dealer Loan balances.  A summary of related party Loan activity is as follows:

(In thousands)	For the Three Months Ended September 30,
	2012				2011
	Affiliated Dealer  activity		% of  consolidated		Affiliated  Dealer  activity		% of consolidated
Dealer Loan revenue	$	284	0.2	%	$	349	0.4	%
New Consumer Loan assignments (1)		928	0.3	%		128	0.0	%
Accelerated Dealer Holdback payments		79	0.8	%		–	0.0	%
Dealer Holdback payments		692	2.6	%		652	2.7	%

(In thousands)	For the Nine Months Ended September 30,
	2012				2011
	Affiliated  Dealer  activity		% of  consolidated		Affiliated  Dealer  activity		% of consolidated
Dealer Loan revenue	$	849	0.2	%	$	1,330	0.5	%
New Consumer Loan assignments (1)		2,662	0.3	%		788	0.1	%
Accelerated Dealer Holdback payments		149	0.4	%		24	0.1	%
Dealer Holdback payments		2,643	2.9	%		1,757	3.0	%

(1) Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

Our Chairman and significant shareholder has indirect control over entities that, in the past, offered secured lines of credit to automobile dealers, and has the right or obligation to reacquire these entities under certain circumstances until December 31, 2014 or the repayment of the related purchase money note.

9.           INCOME TAXES

A reconciliation of the U.S. federal statutory rate to our effective tax rate is as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
U.S. federal statutory rate	35.0	%	35.0	%	35.0	%	35.0	%
State income taxes	1.7	%	1.5	%	1.6	%	1.9	%
Changes in reserve for uncertain tax positions as a result of settlements and lapsed statutes and related interest	-0.4	%	-0.2	%	-0.4	%	-0.6	%
Other	0.5	%	0.2	%	0.3	%	0.0	%
Effective tax rate	36.8	%	36.5	%	36.5	%	36.3	%

The differences between the U.S. federal statutory rate and our effective tax rate are primarily due to state income taxes and reserves for uncertain tax positions and related interest that are included in the provision for income taxes.

27

10.         NET INCOME PER SHARE

Basic net income per share has been computed by dividing net income by the basic number of weighted average shares outstanding.  Diluted net income per share has been computed by dividing net income by the diluted number of weighted average shares outstanding using the treasury stock method.  The share effect is as follows:

(In thousands)	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2012	2011	2012	2011
Weighted average shares outstanding:
Common shares	24,337	25,605	25,074	25,991
Vested restricted stock units	571	428	555	406
Basic number of weighted average shares outstanding	24,908	26,033	25,629	26,397
Dilutive effect of stock options	46	70	50	116
Dilutive effect of restricted stock and restricted stock units	8	33	27	60
Dilutive number of weighted average shares outstanding	24,962	26,136	25,706	26,573

For the three and nine months ended September 30, 2012 and 2011, there were no stock options, restricted stock or restricted stock units that would have been anti-dilutive.

11.         STOCK REPURCHASES

On August 5, 1999, our board of directors approved a stock repurchase program which authorizes us to repurchase common shares in the open market or in privately negotiated transactions at price levels we deem attractive.  On March 26, 2012, the board of directors authorized the repurchase of up to one million shares of our common stock in addition to the board’s prior authorizations.  As of September 30, 2012, we had authorization to repurchase 976,129 shares of our common stock.

During the first two quarters of 2012, we repurchased 285,402 shares of our common stock in the open market at a cost of $27.0 million.

During the second quarter of 2012, we commenced a tender offer to repurchase 1.0 million shares of our common stock at a price of $84.45 per share.  Upon expiration of the tender offer during the second quarter of 2012, we repurchased 1.0 million common shares at a cost of $84.5 million.  The settlement during the third quarter of 2012 was financed by borrowing under our revolving secured line of credit facility.

During the first quarter of 2011, we commenced a tender offer to repurchase 1.9 million shares of our common stock at a price of $65.625 per share.  Upon expiration of the tender offer during the first quarter of 2011, we repurchased 1.9 million common shares at a cost of $125.0 million.  We financed the repurchase of our common stock in the tender offer using the proceeds from the issuance of $100.0 million of Senior Notes and by borrowing under our revolving secured line of credit facility.

12.         STOCK-BASED COMPENSATION PLANS

On March 26, 2012, our board of directors approved an amendment to our Amended and Restated Incentive Compensation Plan (the “Incentive Plan”) increasing the number of shares authorized for issuance by 500,000 shares, to 2 million shares.  Pursuant to the Incentive Plan, we can grant restricted stock, restricted stock units, stock options, and performance awards to team members, officers, directors, and contractors at any time prior to March 26, 2022.  The shares available for future grants under the Incentive Plan totaled 342,300 as of September 30, 2012.

On March 26, 2012, the compensation committee of our board of directors approved an award of 310,000 restricted stock units and 190,000 shares of restricted stock to our Chief Executive Officer.  The 310,000 restricted stock units and 90,000 shares of restricted stock are eligible to vest over a ten year period beginning in 2012 based on the cumulative improvement in our annual adjusted economic profit, a non-GAAP financial measure.  The remaining 100,000 shares of restricted stock are eligible to vest in equal annual installments over a five year period beginning in 2022 based on the attainment of annual adjusted economic profit targets.

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12.         STOCK-BASED COMPENSATION PLANS – (Continued)

A summary of the restricted stock activity under the Incentive Plan for the nine months ended September 30, 2012 and 2011 is presented below:

(In thousands)	Number of Shares
	For the Nine Months Ended September 30,
Restricted Stock	2012		2011
Outstanding Beginning Balance	48		112
Granted	199		9
Vested	(37	)	(63	)
Forfeited	(3	)	(7	)
Outstanding Ending Balance	207		51

The grant-date fair value per share is estimated to equal the market price of our common stock on the date of grant.  In addition to the 190,000 shares of restricted stock granted to our Chief Executive Officer in 2012, we grant time-based shares of restricted stock annually to team members based on attaining certain individual and Company performance criteria as a part of our annual incentive compensation program.  Based on the terms of individual restricted stock grant agreements, these time-based shares generally vest over a period of three to five years, based on continuous employment.

A summary of the restricted stock unit activity under the Incentive Plan for the nine months ended September 30, 2012 and 2011 is presented below:

(In thousands, except per share data)	Nonvested				Vested			Total
Restricted Stock Units	Number of Restricted Stock Units		Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units	Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units
Outstanding as of December 31, 2011	348		$	24.06	428	$	22.14	776
Granted	313			106.32	–		–	313		(1	)
Vested	(143	)		21.48	143		21.48	–		(2	)
Forfeited	(8	)		15.80	–		–	(8	)
Outstanding as of September 30, 2012	510		$	75.43	571	$	21.97	1,081
(In thousands, except per share data)	Nonvested				Vested			Total
Restricted Stock Units	Number of Restricted Stock Units		Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units	Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units
Outstanding as of December 31, 2010	521		$	19.99	270	$	22.94	791
Granted	25			58.54	–		–	25		(3	)
Vested	(158	)		20.99	158		20.99	–		(4	)
Forfeited	(34	)		20.50	–		–	(34	)
Outstanding as of September 30, 2011	354		$	22.07	428	$	22.14	782

(1)   The distribution date of vested restricted stock units is February 18, 2019 for 3 restricted stock units.  For 310 restricted stock units, the vested restricted stock units will be distributed in equal installments on December 31, 2022, 2023, 2024, 2025 and 2026.

(2)   The distribution date of vested restricted stock units is February 22, 2014 for 60 restricted stock units, February 22, 2016 for 77 restricted stock units and February 22, 2017 for 6 restricted stock units.

(3)   The distribution date of vested restricted stock units is February 22, 2018 for 5 restricted stock units and February 18, 2019 for 20 restricted stock units.

(4)   The distribution date of vested restricted stock units is February 22, 2014 for 60 restricted stock units, February 22, 2016 for 90 restricted stock units and February 22, 2017 for 8 restricted stock units.

     Each restricted stock unit represents and has a value equal to one share of common stock.  The grant-date fair value per share is estimated to equal the market price of our common stock on the date of grant.  In addition to the 310,000 restricted stock units granted to our Chief Executive Officer in 2012, we grant performance-based restricted stock units to team members as part of our long-term incentive compensation program.  These restricted stock units will be earned over a five-year period based upon the compounded annual growth rate in our adjusted economic profit, a non-GAAP financial measure.

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12.         STOCK-BASED COMPENSATION PLANS – (Concluded)

Stock compensation expense consists of the following:

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Restricted stock	$	1,101	$	113	$	2,370	$	493
Restricted stock units		2,944		251		6,231		1,063
Total	$	4,045	$	364	$	8,601	$	1,556

While the restricted stock units and shares of restricted stock are generally expected to vest in equal, annual installments over the corresponding requisite service periods of the grants, the related stock-based compensation expense is not recognized on a straight-line basis over the same periods.  Each installment is accounted for as a separate award and as a result, the fair value of each installment is recognized as stock-based compensation expense on a straight-line basis over the related vesting period.  The following table details how the expenses associated with restricted stock and restricted stock units, which are expected to be recognized over a weighted average period of 3.5 years, will be recorded assuming performance targets are achieved in the periods currently estimated:

(In thousands)
Year	Restricted Stock Units		Restricted Stock		Total Projected Expense
Remainder of 2012	$	2,294	$	913	$	3,207
2013		7,624		3,086		10,710
2014		5,263		2,350		7,613
2015		4,298		2,029		6,327
2016		3,639		1,862		5,501
Thereafter		7,060		8,722		15,782
Total	$	30,178	$	18,962	$	49,140

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13.        LITIGATION AND CONTINGENT LIABILITIES

In the normal course of business and as a result of the customer-oriented nature of the industry in which we operate, industry participants are frequently subject to various customer claims and litigation seeking damages and statutory penalties.  The claims allege, among other theories of liability, violations of state, federal and foreign truth-in-lending, credit availability, credit reporting, customer protection, warranty, debt collection, insurance and other customer-oriented laws and regulations, including claims seeking damages for physical and mental damages relating to our repossession and sale of the customer’s vehicle and other debt collection activities.  As the assignee of Consumer Loans originated by Dealers, we may also be named as a co-defendant in lawsuits filed by customers principally against Dealers.  We may also have disputes and litigation with Dealers. The claims may allege, among other theories of liability, that we breached our dealer servicing agreement.  Many of these cases are filed as purported class actions and seek damages in large dollar amounts.  The following matters include current actions to which we are a party and updates to matters that were disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.

On December 3, 2010, we received a civil investigative demand from the Office of the Missouri Attorney General relating to our practices regarding collections from Missouri consumers who claim to have not received title from the Dealer at the time of their purchase.  On January 24, 2011, we provided an initial response and on May 16, 2011, we filed a supplemental response.  We cooperated with the Attorney General throughout the entire investigation, which the State confirms has been completed.  We have reached an agreement in principle with the State of Missouri to enter into an assurance of voluntary compliance that resolves all possible claims by the State in relation to the subject of the civil investigative demand but which involves no admission of any violation or wrongdoing by the Company.  We will continue to work with the Attorney General to finalize the terms of the settlement.

On November 22, 2011, an arbitration proceeding against us was commenced before the American Arbitration Association ("AAA") in Southfield, Michigan.  The arbitration demand was brought by a Dealer and sought unspecified money damages for alleged breach of the dealer servicing agreement.  The claimant purported to proceed on behalf of a putative class of similarly situated Dealers.  On or about January 3, 2012, we filed an answer, denying the allegations in the demand and opposing claimant’s attempt to proceed on a class-wide basis based on the terms of the parties’ arbitration agreement, which does not authorize class-wide arbitration, and recent controlling Supreme Court authority.  An arbitration panel was never appointed.  On August 1, 2012, we received notice that the Dealer dismissed the proceeding against the Company.

On September 7, 2012, an arbitration proceeding against us was commenced before the AAA in Southfield, Michigan.  The arbitration demand was brought by a group of six Dealers and sought unspecified money damages for claims relating to the dealer servicing agreements of these Dealers.  We previously received an unfiled demand from five of these six Dealers alleging similar claims.  On or about September 27, 2012, we filed an objection to the consolidation of these arbitration claims based on the terms of the parties’ respective arbitration agreements, which do not authorize consolidated arbitration proceedings.  On October 9, 2012, the AAA sustained our objection holding that the cases could only proceed on an individual basis.  Plaintiffs failed to do so and the AAA deemed the matter not properly filed.

An adverse ultimate disposition in any action to which we are a party or otherwise subject could have a material adverse impact on our financial position, liquidity and results of operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in Item 8 - Financial Statements and Supplementary Data, of our 2011 Annual Report on Form 10-K, as well as Item 1- Consolidated Financial Statements, of this Form 10-Q, which is incorporated herein by reference.

Overview

We offer automobile dealers financing programs that enable them to sell vehicles to consumers regardless of their credit history.  Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our product, but who actually end up qualifying for traditional financing.

For the three months ended September 30, 2012, consolidated net income was $53.0 million, or $2.12 per diluted share, compared to $50.0 million, or $1.91 per diluted share, for the same period in 2011.  For the nine months ended September 30, 2012, consolidated net income was $159.8 million, or $6.22 per diluted share, compared to $138.0 million, or $5.19 per diluted share, for the same period in 2011.  The increase in consolidated net income for the three and nine months ended September 30, 2012 was primarily due to an increase in the size of our Loan portfolio.

Critical Success Factors

Critical success factors include our ability to access capital on acceptable terms, accurately forecast Consumer Loan performance, and maintain or grow Consumer Loan volume at the level and on the terms that we anticipate, with an objective to maximize economic profit.  Economic profit is a financial metric we use to evaluate our financial results and determine incentive compensation.  Economic profit measures how efficiently we utilize our total capital, both debt and equity, and is a function of the return on capital in excess of the cost of capital and the amount of capital invested in the business.

Access to Capital

Our strategy for accessing capital on acceptable terms needed to maintain and grow the business is to: (1) maintain consistent financial performance; (2) maintain modest financial leverage; and (3) maintain multiple funding sources.  Our funded debt to equity ratio is 2.1:1 as of September 30, 2012.  We currently utilize the following primary forms of debt financing: (1) a revolving secured line of credit; (2) Warehouse facilities; (3) Term ABS financings; and (4) Senior Notes.

Consumer Loan Performance

At the time a Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan.  Based on the amount and timing of these forecasts and expected expense levels, an advance or one-time purchase payment is made to the related Dealer at a price designed to achieve an acceptable return on capital.  If Consumer Loan performance equals or exceeds our initial expectation, it is likely our target return on capital will be achieved.

We use a statistical model to estimate the expected collection rate for each Consumer Loan at the time of assignment.  We continue to evaluate the expected collection rate of each Consumer Loan subsequent to assignment.  Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast.  By comparing our current expected collection rate for each Consumer Loan with the rate we projected at the time of assignment, we are able to assess the accuracy of our initial forecast.  The following table compares our forecast of Consumer Loan collection rates as of September 30, 2012, with the forecasts as of June 30, 2012, as of December 31, 2011, and at the time of assignment, segmented by year of assignment:

	Forecasted Collection Percentage as of								Variance in Forecasted Collection Percentage from
Consumer Loan Assignment Year	September 30, 2012		June 30, 2012		December 31, 2011		Initial Forecast		June 30, 2012		December 31, 2011		Initial Forecast
2003	73.8	%	73.8	%	73.7	%	72.0	%	0.0	%	0.1	%	1.8	%
2004	73.0	%	73.0	%	73.0	%	73.0	%	0.0	%	0.0	%	0.0	%
2005	73.5	%	73.6	%	73.6	%	74.0	%	-0.1	%	-0.1	%	-0.5	%
2006	70.0	%	70.0	%	70.0	%	71.4	%	0.0	%	0.0	%	-1.4	%
2007	68.1	%	68.1	%	68.1	%	70.7	%	0.0	%	0.0	%	-2.6	%
2008	70.3	%	70.3	%	70.0	%	69.7	%	0.0	%	0.3	%	0.6	%
2009	79.5	%	79.6	%	79.4	%	71.9	%	-0.1	%	0.1	%	7.6	%
2010	77.2	%	77.1	%	76.8	%	73.6	%	0.1	%	0.4	%	3.6	%
2011	73.7	%	73.6	%	73.2	%	72.5	%	0.1	%	0.5	%	1.2	%
2012  (1)	71.6	%	71.9	%	–		71.1	%	-0.3	%	–		0.5	%

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(1)   The forecasted collection rate for 2012 Consumer Loans as of September 30, 2012 includes both Consumer Loans that were in our portfolio as of June 30, 2012 and Consumer Loans assigned during the most recent quarter.  The following table provides forecasted collection rates for each of these segments:

	Forecasted Collection Percentage as of
2012 Consumer Loan Assignment Period	September 30, 2012		June 30, 2012		Variance
January 1, 2012 through June 30, 2012	72.0	%	71.9	%	0.1	%
July 1, 2012 through September 30, 2012	70.6	%	–		–

Consumer Loans assigned in 2003 and 2009 through 2011 have yielded forecasted collection results materially better than our initial estimates, while Consumer Loans assigned in 2006 and 2007 have yielded forecasted collection results materially worse than our initial estimates.  For all other assignment years presented, actual results have been very close to our initial estimates.  For the three months ended September 30, 2012, forecasted collection rates were generally consistent with expectations at the start of the period for all assignment years presented.  For the nine months ended September 30, 2012, forecasted collection rates improved for Consumer Loans assigned during 2008 and 2010 through 2012 and were generally consistent with expectations at the start of the period for all other assignment years presented.  

Forecasting collection rates precisely at Loan inception is difficult.  With this in mind, we establish advance rates that are intended to allow us to achieve acceptable levels of profitability, even if collection rates are less than we currently forecast.

The following table presents forecasted Consumer Loan collection rates, advance rates, the spread (the forecasted collection rate less the advance rate), and the percentage of the forecasted collections that had been realized as of September 30, 2012.  All amounts, unless otherwise noted, are presented as a percentage of the initial balance of the Consumer Loan (principal + interest).  The table includes both Dealer Loans and Purchased Loans.

	As of September 30, 2012
Consumer Loan Assignment Year	Forecasted Collection %		Advance % (1)		Spread %		% of Forecast Realized (2)
2003	73.8	%	43.4	%	30.4	%	99.6	%
2004	73.0	%	44.0	%	29.0	%	99.5	%
2005	73.5	%	46.9	%	26.6	%	99.4	%
2006	70.0	%	46.6	%	23.4	%	98.8	%
2007	68.1	%	46.5	%	21.6	%	97.8	%
2008	70.3	%	44.6	%	25.7	%	96.1	%
2009	79.5	%	43.9	%	35.6	%	93.1	%
2010	77.2	%	44.7	%	32.5	%	73.8	%
2011	73.7	%	45.5	%	28.2	%	43.9	%
2012	71.6	%	45.9	%	25.7	%	13.5	%

(1) Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

(2) Presented as a percentage of total forecasted collections.

The risk of a material change in our forecasted collection rate declines as the Consumer Loans age.  For 2009 and prior Consumer Loan assignments, the risk of a material forecast variance is modest, as we have currently realized in excess of 90% of the expected collections.  Conversely, the forecasted collection rates for more recent Consumer Loan assignments are less certain as a significant portion of our forecast has not been realized.

The spread between the forecasted collection rate and the advance rate declined during the 2004 through 2007 period as we increased advance rates during this period in response to a more difficult competitive environment.  During 2008 and 2009, the spread increased as the competitive environment improved, and we reduced advance rates.  In addition, during 2009, the spread was positively impacted by better than expected Consumer Loan performance.  During the 2010 through 2012 period, the spread decreased as we again increased advance rates in response to the competitive environment.

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The following table presents forecasted Consumer Loan collection rates, advance rates, and the spread (the forecasted collection rate less the advance rate) as of September 30, 2012 for Dealer Loans and Purchased Loans separately.  All amounts are presented as a percentage of the initial balance of the Consumer Loan (principal + interest).

	Consumer Loan Assignment Year	Forecasted Collection %		Advance % (1)		Spread %
Dealer Loans	2007	68.0	%	45.8	%	22.2	%
	2008	70.8	%	43.3	%	27.5	%
	2009	79.6	%	43.5	%	36.1	%
	2010	77.2	%	44.4	%	32.8	%
	2011	73.7	%	45.4	%	28.3	%
	2012	71.6	%	45.5	%	26.1	%
Purchased Loans	2007	68.4	%	49.1	%	19.3	%
	2008	69.6	%	46.7	%	22.9	%
	2009	79.4	%	45.3	%	34.1	%
	2010	77.0	%	46.5	%	30.5	%
	2011	74.2	%	46.1	%	28.1	%
	2012	72.5	%	50.2	%	22.3	%

(1) Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program as a percentage of the initial balance of the Consumer Loans.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

The advance rates presented for each Consumer Loan assignment year change over time due to the impact of transfers between Dealer and Purchased Loans.  Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s Consumer Loans from the Dealer Loan portfolio to the Purchased Loan portfolio in the period this forfeiture occurs.

Although the advance rate on Purchased Loans is higher as compared to the advance rate on Dealer Loans, Purchased Loans do not require us to pay Dealer Holdback.

Consumer Loan Volume

The following table summarizes changes in Consumer Loan assignment volume in each of the last seven quarters as compared to the same period in the previous year:

	Year over Year Percent Change
Three Months Ended	Unit Volume		Dollar Volume (1)
March 31, 2011	36.7	%	59.3	%
June 30, 2011	28.7	%	41.3	%
September 30, 2011	28.6	%	40.5	%
December 31, 2011	25.3	%	32.1	%
March 31, 2012	10.6	%	10.7	%
June 30, 2012	7.3	%	7.9	%
September 30, 2012	5.4	%	3.1	%

(1) Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

Consumer Loan assignment volumes depend on a number of factors including (1) the overall demand for our product, (2) the amount of capital available to fund new Loans, and (3) our assessment of the volume that our infrastructure can support.  Our pricing strategy is intended to maximize the amount of economic profit we generate, within the confines of capital and infrastructure constraints.

Unit and dollar volumes grew 5.4% and 3.1%, respectively, during the third quarter of 2012 as the number of active Dealers grew 26.6% and average volume per active Dealer declined 16.5%.  We believe the decline in volume per Dealer is the result of increased competition.  We increased advance rates in April 2012 and September 2012, which positively impacted unit and dollar volumes while reducing the return on capital we expect to earn on new assignments.  We believe these advance rate increases had a positive impact on economic profit as we believe the positive impact of the increased dollar volume exceeded the negative impact of the reduced return on capital.  Unit volume for the one month ended October 31, 2012 increased by 13.3% as compared to the same period in 2011 and was positively impacted by two additional business days (23 business days in October 2012 compared to 21 business days in October 2011).

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The following table summarizes the changes in Consumer Loan unit volume and active Dealers:

	For the Nine Months Ended September 30,
	2012	2011	% Change
Consumer Loan unit volume	148,580	137,592	8.0	%
Active Dealers (1)	4,781	3,603	32.7	%
Average volume per active Dealer	31.1	38.2	-18.6	%

      (1)      Active Dealers are Dealers who have received funding for at least one Loan during the period.

The following table provides additional information on the changes in Consumer Loan unit volume and active Dealers:

	For the Nine Months Ended September 30,
	2012		2011		% Change
Consumer Loan unit volume from Dealers active both periods	118,827		128,491		-7.5	%
Dealers active both periods	2,841		2,841		–
Average volume per Dealers active both periods	41.8		45.2		-7.5	%
Consumer Loan unit volume from new Dealers	20,240		13,812		46.5	%
New active Dealers (1)	1,556		1,021		52.4	%
Average volume per new active Dealers	13.0		13.5		-3.7	%
Attrition (2)	-6.6	%	-7.4	%

(1) New active Dealers are Dealers who enrolled in our program and have received funding for their first Loan from us during the period.

(2) Attrition is measured according to the following formula:  decrease in Consumer Loan unit volume from Dealers who have received funding for at least one Loan during the comparable period of the prior year but did not receive funding for any Loans during the current period divided by prior year comparable period Consumer Loan unit volume.

Consumer Loans are assigned to us as either Dealer Loans through our Portfolio Program or Purchased Loans through our Purchase Program.  The following table summarizes the portion of our Consumer Loan volume that was assigned to us as Dealer Loans:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Dealer Loan unit volume as a percentage of total unit volume	93.8	%	92.3	%	93.6	%	92.4	%
Dealer Loan dollar volume as a percentage of total dollar volume (1)	92.1	%	90.1	%	91.8	%	90.4	%

(1) Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.  Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

For the three and nine months ended September 30, 2012, Dealer Loan unit and dollar volume as a percentage of total unit and dollar volume were generally consistent with the same periods in 2011.

As of September 30, 2012 and December 31, 2011, the net Dealer Loans receivable balance was 87.7% and 85.4%, respectively, of the total net Loans receivable balance.

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Results of Operations

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

The following is a discussion of our results of operations and income statement data on a consolidated basis.

(In thousands, except per share data)	For the Three Months Ended September 30,
	2012		2011		% Change
Revenue:
Finance charges	$	137,495	$	117,905	16.6	%
Premiums earned		12,206		10,462	16.7	%
Other income		5,977		5,372	11.3	%
Total revenue		155,678		133,739	16.4	%
Costs and expenses:
Salaries and wages		21,720		15,929	36.4	%
General and administrative		6,797		6,044	12.5	%
Sales and marketing		8,129		5,587	45.5	%
Provision for credit losses		9,759		4,550	114.5	%
Interest		16,289		14,600	11.6	%
Provision for claims		9,122		8,363	9.1	%
Total costs and expenses		71,816		55,073	30.4	%
Income before provision for income taxes		83,862		78,666	6.6	%
Provision for income taxes		30,874		28,706	7.6	%
Net income	$	52,988	$	49,960	6.1	%
Net income per share:
Basic	$	2.13	$	1.92
Diluted	$	2.12	$	1.91
Weighted average shares outstanding:
Basic		24,908		26,033
Diluted		24,962		26,136

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The following table highlights changes in net income for the three months ended September 30, 2012, as compared to 2011:

(In thousands)	Change
Net income for the three months ended September 30, 2011	$	49,960
Increase in finance charges		19,590
Increase in premiums earned		1,744
Increase in other income		605
Increase in operating expenses (1)		(9,086	)
Increase in provision for credit losses		(5,209	)
Increase in interest		(1,689	)
Increase in provision for claims		(759	)
Increase in provision for income taxes		(2,168	)
Net income for the three months ended September 30, 2012	$	52,988

(1) Operating expenses consist of salaries and wages, general and administrative, and sales and marketing expenses.

Finance Charges.  For the three months ended September 30, 2012, finance charges increased $19.6 million, or 16.6%, as compared to the same period in 2011.  The increase was primarily the result of an increase in the average net Loans receivable balance partially offset by a decrease in the average yield on our Loan portfolio, as follows:

(Dollars in thousands)	For the Three Months Ended September 30,
	2012			2011			Change
Average net Loans receivable balance	$	1,848,512		$	1,478,779		$	369,733
Average yield on our Loan portfolio		29.8	%		31.9	%		-2.1	%

The following table summarizes the impact each component had on the overall increase in finance charges for the three months ended September 30, 2012:

(In thousands)	Year over Year Change
Impact on finance charges:	For the Three Months Ended September 30, 2012
Due to an increase in the average net Loans receivable balance	$	29,479
Due to a decrease in the average yield		(9,889	)
Total increase in finance charges	$	19,590

The increase in the average net Loans receivable balance was primarily due to growth in new Loan volume during the last two quarters of 2011 and the first three quarters of 2012, which was primarily a result of an increase in active Dealers.  The average yield on our Loan portfolio for the three months ended September 30, 2012 decreased as compared to the same period in 2011 due to lower yields on new Loans, partially offset by improvements in forecasted collection rates during the last two quarters of 2011 and the first two quarters of 2012.

Premiums Earned.  For the three months ended September 30, 2012, premiums earned increased $1.7 million, or 16.7%, as compared to the same period in 2011.  The increase is primarily due to growth in the size of our reinsurance portfolio which resulted from growth in new Consumer Loan assignments during the last two quarters of 2011 and the first three quarters of 2012.

Other Income.  For the three months ended September 30, 2012, other income increased $0.6 million, or 11.3%, as compared to the same period in 2011.  The increase is primarily due to an increase in Global Positioning Systems with Starter Interrupt Devices (“GPS-SID”) fee income due to increases in both the fee earned per unit and the number of units purchased by Dealers from third party providers. 

37

Operating Expenses.  For the three months ended September 30, 2012, operating expenses increased $9.1 million, or 33.0%, as compared to the same period in 2011.  The change in operating expenses is primarily due to the following:

·   An increase in salaries and wages expense of $5.8 million, or 36.4%, which included a $3.7 million increase in stock-based compensation expense primarily attributable to the 15 year stock award granted to our Chief Executive Officer during the first quarter of the yearand a $0.9 million increase in fringe benefits, primarily related to medical claims.  Salaries and wages, excluding the increase in stock-based compensation and fringe benefits, increased $1.2 million including an increase of $0.9 million in loan servicing, $0.2 million for support functions and $0.1 million in loan originations.

·   An increase in sales and marketing expense of $2.5 million, or 45.5%, primarily as a result of the increase in the size of our field sales force.

Provision for Credit Losses.  For the three months ended September 30, 2012, the provision for credit losses increased $5.2 million, or 114.5%, as compared to the same period in 2011.  Under GAAP, when the present value of forecasted future cash flows decline relative to our expectations at the time of assignment, a provision for credit losses is recorded immediately as a current period expense and a corresponding allowance for credit losses is established.  For purposes of calculating the required allowance, Dealer Loans are grouped by Dealer and Purchased Loans are grouped by month of purchase.  As a result, regardless of the overall performance of the portfolio of Consumer Loans, a provision can be required if any individual Loan pool performs worse than expected.  Conversely, a previously recorded provision can be reversed if any previously impaired individual Loan pool experiences an improvement in performance.

During the three months ended September 30, 2012, overall Consumer Loan performance was generally consistent with our expectations at the start of the period.  However, the performance of certain Loan pools declined from our expectations during the period, resulting in a provision for credit losses of $9.8 million for the three months ended September 30, 2012, of which $10.2 million related to Dealer Loans partially offset by a reversal of a provision of $0.4 million related to Purchased Loans.  During the three months ended September 30, 2011, overall Consumer Loan performance exceeded our expectations at the start of the period.  However, the performance of certain Loan pools declined from our expectations during the period, resulting in a provision for credit losses of $4.5 million for the three months ended September 30, 2011, of which $4.7 million related to Dealer Loans partially offset by a reversal of a provision of $0.2 million related to Purchased Loans.

Interest.  For the three months ended September 30, 2012, interest expense increased $1.7 million, or 11.6%, as compared to the same period in 2011.  The following table shows interest expense, the average outstanding debt balance, and the average cost of debt for the three months ended September 30, 2012 and 2011:

(Dollars in thousands)	For the Three Months Ended September 30,
	2012			2011
Interest expense	$	16,289		$	14,600
Average outstanding debt balance		1,202,821			941,531
Average cost of debt		5.4	%		6.2	%

For the three months ended September 30, 2012, the increase in interest expense is primarily due to the increase in the average outstanding debt balance, partially offset by a decline in our average cost of debt.  The average outstanding debt balance increased compared to the same period in 2011 due to the use of the debt proceeds to fund the growth in new Consumer Loan assignments and stock repurchases.  The decline in our average cost of debt was primarily a result of a change in the mix of our outstanding debt.

Provision for Claims.  For the three months ended September 30, 2012, provision for claims increased $0.8 million, or 9.1%, as compared to the same period in 2011.  The increase was due to an increase in the size of our reinsurance portfolio partially offset by a decrease in claims paid per reinsured vehicle service contract.

Provision for Income Taxes.  For the three months ended September 30, 2012, the effective tax rate of 36.8% was generally consistent with the effective tax rate of 36.5% in the same period in 2011.  

38

Results of Operations

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

The following is a discussion of our results of operations and income statement data on a consolidated basis.

(In thousands, except per share data)	For the Nine Months Ended September 30,
	2012		2011		% Change
Revenue:
Finance charges	$	397,563	$	338,238	17.5	%
Premiums earned		34,987		29,195	19.8	%
Other income		17,313		19,783	-12.5	%
Total revenue		449,863		387,216	16.2	%
Costs and expenses:
Salaries and wages		61,530		47,402	29.8	%
General and administrative		21,463		18,186	18.0	%
Sales and marketing		23,478		17,768	32.1	%
Provision for credit losses		17,716		22,394	-20.9	%
Interest		47,150		42,173	11.8	%
Provision for claims		26,704		22,733	17.5	%
Total costs and expenses		198,041		170,656	16.0	%
Income before provision for income taxes		251,822		216,560	16.3	%
Provision for income taxes		91,983		78,565	17.1	%
Net income	$	159,839	$	137,995	15.8	%
Net income per share:
Basic	$	6.24	$	5.23
Diluted	$	6.22	$	5.19
Weighted average shares outstanding:
Basic		25,629		26,397
Diluted		25,706		26,573

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The following table highlights changes in net income for the nine months ended September 30, 2012, as compared to 2011:

(In thousands)	Change
Net income for the nine months ended September 30, 2011	$	137,995
Increase in finance charges		59,325
Increase in premiums earned		5,792
Decrease in other income		(2,470	)
Increase in operating expenses (1)		(23,115	)
Decrease in provision for credit losses		4,678
Increase in interest		(4,977	)
Increase in provision for claims		(3,971	)
Increase in provision for income taxes		(13,418	)
Net income for the nine months ended September 30, 2012	$	159,839

(1) Operating expenses consist of salaries and wages, general and administrative, and sales and marketing expenses.

Finance Charges.  For the nine months ended September 30, 2012, finance charges increased $59.3 million, or 17.5%, as compared to the same period in 2011.  The increase was primarily the result of an increase in the average net Loans receivable balance partially offset by a decrease in the average yield on our Loan portfolio, as follows:

(Dollars in thousands)	For the Nine Months Ended September 30,
	2012			2011			Change
Average net Loans receivable balance	$	1,759,025		$	1,378,784		$	380,241
Average yield on our Loan portfolio		30.1	%		32.7	%		-2.6	%

The following table summarizes the impact each component had on the overall increase in finance charges for the nine months ended September 30, 2012:

(In thousands)	Year over Year Change
Impact on finance charges:	For the Nine Months Ended September 30, 2012
Due to an increase in the average net Loans receivable balance	$	93,279
Due to a decrease in the average yield		(33,954	)
Total increase in finance charges	$	59,325

The increase in the average net Loans receivable balance was primarily due to growth in new Loan volume throughout 2011 and 2012, which was primarily a result of an increase in active Dealers.  The average yield on our Loan portfolio for the nine months ended September 30, 2012 decreased as compared to the same period in 2011 due to lower yields on new Loans, partially offset by improvements in forecasted collection rates throughout 2011 and the first two quarters of 2012.

Premiums Earned.  For the nine months ended September 30, 2012, premiums earned increased $5.8 million, or 19.8%, as compared to the same period in 2011.  The increase is primarily due to growth in the size of our reinsurance portfolio which resulted from growth in new Consumer Loan assignments throughout 2011 and 2012.

Other Income.  For the nine months ended September 30, 2012, other income decreased $2.5 million, or 12.5%, as compared to the same period in 2011.  The decrease in other income was primarily due to a decrease in Guaranteed Asset Protection (“GAP”) profit sharing income from $6.9 million in the first three quarters of 2011 to $1.7 million in the first three quarters of 2012.  The decrease is primarily the result of the change we made to our revenue recognition during the second quarter of 2011 to begin recognizing this income as earned over the life of the GAP contracts.  As a result of this change, 2011 included both the recognition of the annual profit sharing payment for 2010 received during the first quarter of 2011 ($3.7 million) and the recognition of future profit sharing payments earned during the first three quarters of 2011 ($3.2 million).  In addition, profit sharing payments earned during the first three quarters of 2012 ($1.7 million) included a $0.5 million reversal in the first quarter of previously recognized income resulting from a change in our profit sharing arrangement.  The $5.2 million decrease in GAP profit sharing was partially offset by a $2.8 million increase in GPS-SID fee income due to increases in both the fee earned per unit and the number of units purchased by dealers.

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Operating Expenses.  For the nine months ended September 30, 2012, operating expenses increased $23.1 million, or 27.7%, as compared to the same period in 2011.  The change in operating expenses is due to the following:

·   An increase in salaries and wages expense of $14.1 million, or 29.8%, which included a $7.0 million increase in stock-based compensation expense primarily attributable to the 15 year stock award granted to our Chief Executive Officer during the first quarter of the year and a $1.9 million increase in fringe benefits, primarily related to medical claims. Salaries and wages, excluding the increase in stock-based compensation and fringe benefits, increased $5.2 million including an increase of $3.2 million in loan servicing, $1.6 million for support functions and $0.4 million in loan originations.

·   An increase in sales and marketing expenses of $5.7 million, or 32.1%, primarily as a result of the increase in the size of the field sales force.

·   An increase in general and administrative expenses of $3.3 million, or 18.0%, primarily due to a $1.3 million increase in information technology expenses, an increase in legal expenses of $0.9 million and $0.9 million in higher taxes primarily as a result of a property tax refund recognized in the first quarter of 2011. 

Provision for Credit Losses.  For the nine months ended September 30, 2012, the provision for credit losses decreased $4.7 million, or 20.9%, as compared to the same period in 2011.  During the nine months ended September 30, 2012, overall Consumer Loan performance exceeded our expectations at the start of the period.  However, the performance of certain Loan pools declined from our expectations during the period, resulting in a provision for credit losses of $17.7 million for the nine months ended September 30, 2012, of which $20.4 million related to Dealer Loans partially offset by a reversal of a provision of $2.7 million related to Purchased Loans.  During the nine months ended September 30, 2011, overall Consumer Loan performance exceeded our expectations at the start of the period.  However, the performance of certain Loan pools declined from our expectations during the period, resulting in a provision for credit losses of $22.4 million for the nine months ended September 30, 2011, of which $23.0 million related to Dealer Loans offset by a reversal of provision of $0.6 million related to Purchased Loans.

Interest.  For the nine months ended September 30, 2012, interest expense increased $5.0 million, or 11.8%, as compared to the same period in 2011.  The following table shows interest expense, the average outstanding debt balance, and the average cost of debt for the nine months ended September 30, 2012 and 2011:

(Dollars in thousands)	For the Nine Months Ended September 30,
	2012			2011
Interest expense	$	47,150		$	42,173
Average outstanding debt balance		1,120,146			861,155
Average cost of debt		5.6	%		6.5	%

For the nine months ended September 30, 2012, the increase in interest expense is primarily due to the increase in the average outstanding debt balance, partially offset by a decline in our average cost of debt.  The average outstanding debt balance increased compared to the same period in 2011 due to the use of the debt proceeds to fund the growth in new Consumer Loan assignments and stock repurchases.  The decline in our average cost of debt was primarily a result of a change in the mix of our outstanding debt.

Provision for Claims.  For the nine months ended September 30, 2012, provision for claims increased $4.0 million, or 17.5%, as compared to the same period in 2011.  The increase was due to an increase in the size of our reinsurance portfolio partially offset by a decrease in claims paid per reinsured vehicle service contract.

Provision for Income Taxes.  For the nine months ended September 30, 2012, the effective tax rate of 36.5% was generally consistent with the effective tax rate of 36.3% in the same period in 2011.  

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Liquidity and Capital Resources

We need capital to maintain and grow our business.  Our primary sources of capital are cash flows from operating activities, collections of Consumer Loans and borrowings under: (1) a revolving secured line of credit; (2) Warehouse facilities; (3) Term ABS financings; and (4) Senior Notes.  There are various restrictive debt covenants for each financing arrangement and we are in compliance with those covenants as of September 30, 2012.  For information regarding these financings and the covenants included in the related documents, see Note 5 to the consolidated financial statements contained in Item 1 of this Form 10-Q, which is incorporated herein by reference.

During the third quarter of 2012, we completed a $252.0 million Term ABS financing which was used to repay outstanding indebtedness.  The financing has an expected annualized cost of approximately 2.0% (including the initial purchaser’s fees and other costs) and it will revolve for 24 months after which it will amortize based upon the cash flows on the contributed loans.

During the second quarter of 2012, we extended the maturity of our revolving secured line of credit facility from June 22, 2014 to June 22, 2015.  Additionally, the amount of the facility was increased from $205.0 million to $235.0 million.  The interest rate on borrowings under the facility was decreased from the prime rate plus 1.25% or the LIBOR rate plus 2.25%, at our option, to the prime rate plus 0.875% or the LIBOR rate plus 1.875%, at our option.

During the second quarter of 2012, we extended the date on which Warehouse III will cease to revolve from September 10, 2013 to September 10, 2015.  The maturity of the facility was also extended from September 10, 2014 to September 10, 2017.  There were no other material changes to the terms of the facility.

During the second quarter of 2012, we commenced a tender offer to repurchase 1.0 million shares of our common stock at a price of $84.45 per share.  Upon expiration of the tender offer during the second quarter of 2012, we repurchased 1.0 million common shares at a cost of $84.5 million.  The settlement during the third quarter of 2012 was financed by borrowing under our revolving secured line of credit facility.

During the first quarter of 2012, we completed a $201.3 million Term ABS financing which was used to repay outstanding indebtedness.  The financing has an expected annualized cost of approximately 2.8% (including the initial purchaser’s fees and other costs) and it will revolve for 24 months after which it will amortize based upon the cash flows on the contributed loans.

Cash and cash equivalents as of September 30, 2012 and December 31, 2011 was $5.7 million and $4.7 million, respectively.  Our total balance sheet indebtedness increased $264.3 million to $1,262.1 million as of September 30, 2012 from $997.8 million as of December 31, 2011 due to the growth in new Consumer Loan assignments and stock repurchases.

Contractual Obligations

A summary of our scheduled principal debt maturities as of September 30, 2012 is as follows:

(In thousands)
Year	Scheduled Principal Debt Maturities (1)
Remainder of 2012	$	23,849
2013		146,594
2014		443,207
2015		298,104
2016		–
Thereafter		350,000
Total	$	1,261,754

(1) The principal maturities of certain financings are estimated based on forecasted collections.

The amounts presented exclude the net unamortized debt premium of $0.3 million.

Based upon anticipated cash flows, management believes that cash flows from operations and its various financing alternatives will provide sufficient financing for debt maturities and for future operations.  Our ability to borrow funds may be impacted by economic and financial market conditions.  If the various financing alternatives were to become limited or unavailable to us, our operations and liquidity could be materially and adversely affected.

42

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with GAAP.  The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  On an ongoing basis, we review our accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP.  Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2011 discusses several critical accounting estimates, which we believe involve a high degree of judgment and complexity.  There have been no material changes to the estimates and assumptions associated with these accounting estimates from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2011.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

43

Forward-Looking Statements

We make forward-looking statements in this report and may make such statements in future filings with the Securities and Exchange Commission (“SEC”).  We may also make forward-looking statements in our press releases or other public or shareholder communications.  Our forward-looking statements are subject to risks and uncertainties and include information about our expectations and possible or assumed future results of operations.  When we use any of the words “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “assume,” “forecast,” “estimate,” “intend,” “plan,” “target” or similar expressions, we are making forward-looking statements.

We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements.  These forward-looking statements represent our outlook only as of the date of this report.  While we believe that our forward-looking statements are reasonable, actual results could differ materially since the statements are based on our current expectations, which are subject to risks and uncertainties.  Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of our Form 10-K for the year ended December 31, 2011, as amended in Item 1A of Part II of our Form 10-Q for the quarter ended June 30, 2012, as amended in Item 1A of Part II of this report, other risk factors discussed herein or listed from time to time in our reports filed with the SEC and the following:

·   Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations.

·   We may be unable to execute our business strategy due to current economic conditions.

·   We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business.

·   The terms of our debt limit how we conduct our business.

·   A violation of the terms of our Term ABS facilities or Warehouse facilities could have a materially adverse impact on our operations.

·   The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity and results of operations.

·   Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations and adversely affect our financial condition.

·   Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully.

·   We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt.

·   Interest rate fluctuations may adversely affect our borrowing costs, profitability and liquidity.

·   Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition and results of operations.

·   We may incur substantially more debt and other liabilities.  This could exacerbate further the risks associated with our current debt levels.

·   The regulation to which we are or may become subject could result in a material adverse effect on our business.

·   Adverse changes in economic conditions, the automobile or finance industries, or the non-prime consumer market could adversely affect our financial position, liquidity and results of operations, the ability of key vendors that we depend on to supply us with services, and our ability to enter into future financing transactions.

·   Litigation we are involved in from time to time may adversely affect our financial condition, results of operations and cash flows.

·   Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations.

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·   Our operations are dependent on technology. 

·   Reliance on third parties to administer our ancillary product offerings could adversely affect our business and financial results.

·   We are dependent on our senior management and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably.

·   Our reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace.

·   The concentration of our Dealers in several states could adversely affect us.

·   Failure to properly safeguard confidential consumer information could subject us to liability, decrease our profitability and damage our reputation.

·   Our Chairman and founder controls a significant percentage of our common stock, has the ability to significantly influence matters requiring shareholder approval and has interests which may conflict with the interests of our other security holders.

·   Reliance on our outsourced business functions could adversely affect our business.

·   Natural disasters, acts of war, terrorist attacks and threats or the escalation of military activity in response to these attacks or otherwise may negatively affect our business, financial condition and results of operations.

Other factors not currently anticipated by management may also materially and adversely affect our results of operations.  We do not undertake, and expressly disclaim any obligation, to update or alter our statements whether as a result of new information, future events or otherwise, except as required by applicable law.

ITEM 3.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Refer to our Annual Report on Form 10-K for the year ended December 31, 2011 for a complete discussion of our market risk.  There have been no material changes to the market risk information included in our 2011 Annual Report on Form 10-K.

ITEM 4.          CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures.

(a) Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Internal Control Over Financial Reporting. There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

45

PART II. - OTHER INFORMATION

ITEM 1A.    RISK FACTORS

The risk factors entitled “Our operations are dependent on technology” and “Failure to properly safeguard confidential consumer information could subject us to liability, decrease our profitability and damage our reputation” included in Item 1A — “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011 are amended and restated in their entirety as follows:

Failure to properly safeguard confidential consumer information could subject us to liability, decrease our profitability and damage our reputation.

In the ordinary course of our business, we collect, share and store sensitive data, including our proprietary business information and personally identifiable information of our customers and employees, on our computer networks.  The secure processing, maintenance and transmission of this information is critical to our operations and business strategy.

If third parties or our team members are able to breach our network security, the network security of a third party that we share information with or otherwise misappropriate our customers’ personal financial information, or if we give third parties or our team members improper access to our customers’ personal financial information, we could be subject to liability.  This liability could include identity theft or other similar fraud-related claims.  This liability could also include claims for other misuses or losses of personal financial information, including for unauthorized marketing purposes.  Other liabilities could include claims alleging misrepresentation of our privacy and data security practices.

We rely on encryption and authentication technology licensed from third parties to provide the security and authentication necessary to secure online transmission of confidential consumer information.  Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments may result in a compromise or breach of the algorithms that we use to protect sensitive customer transaction data.  A party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations.  We may be required to expend capital and other resources to protect against, or alleviate problems caused by, security breaches or other cybersecurity incidents.  Although we have experienced cybersecurity incidents from time to time that have not had a material effect on our business, financial condition or results of operations, there can be no assurance that a cyber attack, security breach or other cybersecurity incident will not have a material adverse effect on us in the future.  Our security measures are designed to protect against security breaches, but our failure to prevent security breaches could subject us to liability, decrease our profitability and damage our reputation.

ITEM 6.          EXHIBITS

See Index of Exhibits following the signature page, which is incorporated herein by reference.

46

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CREDIT ACCEPTANCE CORPORATION
(Registrant)
By:	/s/ Kenneth S. Booth
	Kenneth S. Booth
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)
Date: November 1, 2012

47

INDEX OF EXHIBITS

The following documents are filed as part of this report.  Those exhibits previously filed and incorporated herein by reference are identified below.  Exhibits not required for this report have been omitted.  Unless otherwise noted, the Company’s commission file number for all exhibits incorporated by reference herein is 000-20202.

Exhibit No.		Description
	4.75	Indenture dated as of September 20, 2012, between Credit Acceptance Auto Loan Trust 2012-2 and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated September 20, 2012)
	4.76	Sale and Servicing Agreement dated as of September 20, 2012, among the Company, Credit Acceptance Auto Loan Trust 2012-2, Credit Acceptance Funding LLC 2012-2, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated September 20, 2012)
	4.77	Backup Servicing Agreement dated as of September 20, 2012, among the Company, Credit Acceptance Funding LLC 2012-2, Credit Acceptance Auto Loan Trust 2012-2, and Wells Fargo Bank, National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated September 20, 2012)
	4.78	Amended and Restated Trust Agreement dated as of September 20, 2012, between Credit Acceptance Funding LLC 2012-2 and U.S. Bank Trust National Association (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated September 20, 2012)
	4.79	Sale and Contribution Agreement dated as of September 20, 2012, between the Company and Credit Acceptance Funding LLC 2012-2 (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated September 20, 2012)
	4.80	Amended and Restated Intercreditor Agreement dated September 20, 2012, among the Company, CAC Warehouse Funding Corporation II, CAC Warehouse Funding III, LLC, CAC Warehouse Funding LLC IV, Credit Acceptance Funding LLC 2012-2, Credit Acceptance Funding LLC 2012-1, Credit Acceptance Funding LLC 2011-1, Credit Acceptance Funding LLC 2010-1, Credit Acceptance Auto Loan Trust 2012-2, Credit Acceptance Auto Loan Trust 2012-1, Credit Acceptance Auto Loan Trust 2011-1, Credit Acceptance Auto Loan Trust 2010-1, Fifth Third Bank, as agent, Wells Fargo Bank, National Association, as agent, Bank of Montreal, as agent and Comerica Bank, as agent (incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K, dated September 20, 2012)
	31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101(INS)		XBRL Instance Document. *
101(SCH)		XBRL Taxonomy Extension Schema Document. *
101(CAL)		XBRL Taxonomy Extension Calculation Linkbase Document. *
101(DEF)		XBRL Taxonomy Extension Definition Linkbase Document. *
101(LAB)		XBRL Taxonomy Extension Label Linkbase Document. *
101(PRE)		XBRL Taxonomy Extension Presentation Linkbase Document. *

* Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

48

EX-31.A

EXHIBIT 31.1

Credit Acceptance Corporation

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Brett A. Roberts, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Credit Acceptance Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 1, 2012	By:	/s/ Brett A. Roberts
		Brett A. Roberts
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.B

EXHIBIT 31.2

Credit Acceptance Corporation

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Kenneth S. Booth, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Credit Acceptance Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 1, 2012	By:	/s/ Kenneth S. Booth
		Kenneth S. Booth
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.A

EXHIBIT 32.1

Credit Acceptance Corporation

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Credit Acceptance Corporation (the "Company") for the quarterly period ending September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brett A. Roberts, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 1, 2012	By:	/s/ Brett A. Roberts
		Brett A. Roberts
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.B

EXHIBIT 32.2

Credit Acceptance Corporation

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Credit Acceptance Corporation (the "Company") for the quarterly period ending September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kenneth S. Booth, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 1, 2012	By:	/s/ Kenneth S. Booth
		Kenneth S. Booth
		Chief Financial Officer
		(Principal Financial Officer)

XML

Summary Of Significant Accounting Policies (Schedule Of Cost And Estimated Fair Values Of Debt Securities By Contractual Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Summary Of Significant Accounting Policies [Line Items]
Total restricted securities available for sale	$ 0	$ 810
Cost [Member]
Summary Of Significant Accounting Policies [Line Items]
Within one year	0	45
Over one year to five years	0	759
Total restricted securities available for sale	0	804
Estimated Fair Value [Member]
Summary Of Significant Accounting Policies [Line Items]
Within one year	0	44
Over one year to five years	0	766
Total restricted securities available for sale	$ 0	$ 810

XML

Derivative And Hedging Instruments (Schedule Of Effect Of Derivative Instruments Designated As Hedging Instruments In Consolidated Financial Statements) (Details) (Designated as Hedging Instrument [Member], Interest Rate Swap [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) / Gain Recognized in OCI on Derivative (Effective Portion)	$ 0	$ 0	$ 0	$ (16)
Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) / Gain Reclassified from Accumulated OCI into Income (Effective Portion)	$ 0	$ (49)	$ 0	$ (192)

XML

Debt (Schedule Of General Information Of Financing Transaction) (Details) (USD $)	3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended																9 Months Ended		9 Months Ended
	Mar. 31, 2012 Revolving Secured Line Of Credit [Member]	Sep. 30, 2012 Revolving Secured Line Of Credit [Member]	Jun. 30, 2012 Revolving Secured Line Of Credit [Member]	Mar. 31, 2012 Warehouse Facility II [Member]	Sep. 30, 2012 Warehouse Facility II [Member]		Sep. 30, 2012 Warehouse Facility III [Member]		Sep. 30, 2012 Warehouse Facility IV [Member]		Sep. 30, 2012 Term ABS 2010-1 [Member]		Sep. 30, 2012 Term ABS 2011-1 [Member]		Sep. 30, 2012 Term ABS 2012-1 [Member]		Sep. 30, 2012 Term ABS 2012-2 [Member]		Sep. 30, 2012 Senior Notes [Member]	Mar. 03, 2011 Senior Notes [Member]	Sep. 30, 2012 $250.0 Million Senior Notes [Member]	Feb. 01, 2010 $250.0 Million Senior Notes [Member]	Sep. 30, 2012 $100.0 Million Senior Notes [Member]	Mar. 03, 2011 $100.0 Million Senior Notes [Member]	Sep. 30, 2012 LIBOR [Member] Revolving Secured Line Of Credit [Member]	Mar. 31, 2012 LIBOR [Member] Revolving Secured Line Of Credit [Member]	Sep. 30, 2012 LIBOR [Member] Warehouse Facility II [Member]		Sep. 30, 2012 LIBOR [Member] Warehouse Facility III [Member]		Sep. 30, 2012 LIBOR [Member] Warehouse Facility IV [Member]		Sep. 30, 2012 Prime Rate [Member] Revolving Secured Line Of Credit [Member]	Mar. 31, 2012 Prime Rate [Member] Revolving Secured Line Of Credit [Member]	Sep. 30, 2012 Commercial Paper Rate [Member] Warehouse Facility II [Member]
Debt Instrument [Line Items]
Wholly-owned Subsidiary		n/a			CAC Warehouse Funding Corp. II	[1]	CAC Warehouse Funding III, LLC	[1]	CAC Warehouse Funding LLC IV	[1]	Credit Acceptance Funding LLC 2010-1	[1]	Credit Acceptance Funding LLC 2011-1	[1]	Credit Acceptance Funding LLC 2012-1	[1]	Credit Acceptance Funding LLC 2012-2	[1]	n/a
Close Date		Jun. 15, 2012
Close date, secured financings					Jun. 17, 2011	[1]	Jun. 29, 2012	[1]	Aug. 19, 2011	[1]	Nov. 04, 2010	[1]	Oct. 06, 2011	[1]	Mar. 29, 2012	[1]	Sep. 20, 2012	[1]			Feb. 01, 2010		Mar. 03, 2011
Maturity Date	Jun. 22, 2014	Jun. 22, 2015
Debt maturity date				Sep. 10, 2013	Jun. 17, 2014	[1],[2]	Sep. 10, 2015	[1],[3]	Feb. 19, 2014	[1],[2]	Oct. 15, 2012	[1],[2]	Sep. 16, 2013	[1],[2]	Mar. 17, 2014	[1],[2]	Sep. 15, 2014	[1],[2]	Feb. 01, 2017
Financing Amount	$ 205,000,000	$ 235,000,000	$ 235,000,000
Debt financing amount					$ 325,000,000	[1]	$ 75,000,000	[1]	$ 75,000,000	[1]	$ 100,500,000	[1]	$ 200,500,000	[1]	$ 201,250,000	[1]	$ 252,000,000	[1]	$ 350,000,000	$ 100,000,000		$ 250,000,000		$ 100,000,000
Basis spread on variable rate																									1.875%	2.25%	3.75%	[1],[4],[5]	1.60%	[1],[5]	2.75%	[1],[5]	0.875%	1.25%	2.75%	[1],[4],[5]

[1] Financing made available only to a specified subsidiary of the Company.

[2] Represents the revolving maturity date.  The outstanding balance will amortize after the maturity date based on the cash flows of the pledged assets.

[3] Represents the revolving maturity date.  The outstanding balance will amortize after the revolving maturity date and any amounts remaining on September 10, 2017 will be due.

[4] The LIBOR rate is used if funding is not available from the commercial paper market.

[5] Interest rate cap agreements are in place to limit the exposure to increasing interest rates.

XML

Derivative And Hedging Instruments (Schedule Of Effect Of Derivative Instruments Not Designated As Hedging Instruments In Consolidated Statements Of Income) (Details) (Interest Expense [Member], Interest Rate Caps [Member], Not Designated as Hedging Instrument [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Interest Expense [Member] | Interest Rate Caps [Member] | Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Loss) / Gain Recognized in Income on Derivatives	$ (7)	$ (61)	$ (66)	$ (202)

XML

Loans Receivable (Summary Of Changes In Allowance For Credit Losses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	$ 161,905		$ 144,819		$ 154,318		$ 126,868
Provision for credit losses	9,759		4,550		17,716		22,394
Write-offs	(1,506)		(804)		(3,015)		(1,770)
Recoveries	605	[1]	463	[1]	1,744	[1]	1,536	[1]
Balance, end of period	170,763		149,028		170,763		149,028
Dealer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	152,031		131,728		141,712		113,227
Provision for credit losses	10,151		4,723		20,381		23,021
Write-offs	(1,480)		(736)		(2,483)		(1,563)
Recoveries	582	[1]	442	[1]	1,674	[1]	1,472	[1]
Balance, end of period	161,284		136,157		161,284		136,157
Purchased Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	9,874		13,091		12,606		13,641
Provision for credit losses	(392)		(173)		(2,665)		(627)
Write-offs	(26)		(68)		(532)		(207)
Recoveries	23	[1]	21	[1]	70	[1]	64	[1]
Balance, end of period	$ 9,479		$ 12,871		$ 9,479		$ 12,871

[1] Represents collections received on previously written off Loans.

XML

Description Of Business (Percentage Of Consumer Loans Assigned Based On Unit Volumes) (Details)	3 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011
Portfolio Program [Member]
Description Of Business [Line Items]
Percentage of new consumer loans	93.80%	93.60%	93.30%	92.60%	92.30%	92.10%	92.90%
Purchase Program [Member]
Description Of Business [Line Items]
Percentage of new consumer loans	6.20%	6.40%	6.70%	7.40%	7.70%	7.90%	7.10%

XML

Fair Value Of Financial Instruments (Schedule Of Assets And Liabilities, Measured At Fair Value On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 5,725	$ 4,657
Restricted Cash And Cash Equivalents, Fair Value Disclosure	167,706	104,679
Restricted cash and cash equivalents	167,706	104,679
Restricted securities available for sale	0	810
Net investment in Loans receivable	1,895,056	1,615,009
Derivative instruments	18	16
Revolving secured line of credit	115,800	43,900
Secured financing	801,226	598,622
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	5,725	4,657
Restricted Cash And Cash Equivalents, Fair Value Disclosure	167,706	104,679
Restricted cash and cash equivalents	167,706	104,679
Restricted securities available for sale	0	810
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments	18	16
Revolving secured line of credit	115,800	43,900
Secured financing	801,226	598,622
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net investment in Loans receivable	1,895,056	1,615,009
Mortgages [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes	4,104	4,288
Mortgages [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes	4,104	4,288
Senior Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes	385,875	365,500
Senior Notes [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes	$ 385,875	$ 365,500

XML

Debt (Tables)

9 Months Ended

Sep. 30, 2012

Debt Instrument [Line Items]

Schedule Of General Information Of Financing Transaction

(Dollars in thousands)
Financings	Wholly-owned Subsidiary	Close Date	Maturity Date		Financing Amount		Interest Rate as of September 30, 2012
Revolving Secured Line of Credit	n/a	06/15/2012	06/22/2015		$	235,000	At our option, either LIBOR plus 187.5 basis points or the prime rate plus 87.5 basis points
Warehouse Facility II (1)	CAC Warehouse Funding Corp. II	06/17/2011	06/17/2014	(2)	$	325,000	Commercial paper rate plus 275 basis points or LIBOR plus 375 basis points (3) (4)
Warehouse Facility III (1)	CAC Warehouse Funding III, LLC	06/29/2012	09/10/2015	(5)	$	75,000	LIBOR plus 160 basis points (4)
Warehouse Facility IV (1)	CAC Warehouse Funding LLC IV	08/19/2011	02/19/2014	(2)	$	75,000	LIBOR plus 275 basis points (4)
Term ABS 2010-1 (1)	Credit Acceptance Funding LLC 2010-1	11/04/2010	10/15/2012	(2)	$	100,500	Fixed rate
Term ABS 2011-1 (1)	Credit Acceptance Funding LLC 2011-1	10/06/2011	09/16/2013	(2)	$	200,500	Fixed rate
Term ABS 2012-1 (1)	Credit Acceptance Funding LLC 2012-1	03/29/2012	03/17/2014	(2)	$	201,250	Fixed rate
Term ABS 2012-2 (1)	Credit Acceptance Funding LLC 2012-2	09/20/2012	09/15/2014	(2)	$	252,000	Fixed rate
Senior Notes	n/a	(6)	02/01/2017		$	350,000	Fixed rate

(1)Financing made available only to a specified subsidiary of the Company.

(2)Represents the revolving maturity date.  The outstanding balance will amortize after the maturity date based on the cash flows of the pledged assets.

(3)The LIBOR rate is used if funding is not available from the commercial paper market.

(4)Interest rate cap agreements are in place to limit the exposure to increasing interest rates.

(5)Represents the revolving maturity date.  The outstanding balance will amortize after the revolving maturity date and any amounts remaining on September 10, 2017 will be due.

(6)The close dates associated with the issuance of $250.0 million and $100.0 million of the Senior Notes were on February 1, 2010 and March 3, 2011, respectively.

Schedule Of Additional Information Related To Debt Instruments

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Revolving Secured Line of Credit
Maximum outstanding balance	$	139,000	$	165,400	$	187,300	$	165,400
Average outstanding balance		100,133		113,098		98,876		108,262
Warehouse Facility II
Maximum outstanding balance	$	173,800	$	264,000	$	177,200	$	264,000
Average outstanding balance		143,733		215,522		128,606		184,224
Warehouse Facility III
Maximum outstanding balance	$	62,000	$	75,000	$	73,000	$	75,000
Average outstanding balance		51,423		73,587		60,760		47,436
Warehouse Facility IV
Maximum outstanding balance	$	39,200	$	43,500	$	39,600	$	43,500
Average outstanding balance		37,809		41,895		37,847		41,895

Summary Of Debt

(Dollars in thousands)	As of
	September 30, 2012			December 31, 2011
Revolving Secured Line of Credit
Balance outstanding	$	115,800		$	43,900
Amount available for borrowing (1)		119,200			161,100
Interest rate		2.09	%		2.55	%
Warehouse Facility II
Balance outstanding	$	0		$	163,200
Amount available for borrowing  (1)		325,000			161,800
Loans pledged as collateral		0			242,119
Restricted cash and cash equivalents pledged as collateral		1,626			6,117
Interest rate		2.96	%		2.99	%
Warehouse Facility III
Balance outstanding	$	0		$	70,000
Amount available for borrowing (1)		75,000			5,000
Loans pledged as collateral		0			91,601
Restricted cash and cash equivalents pledged as collateral		538			3,321
Interest rate		1.82	%		1.89	%
Warehouse Facility IV
Balance outstanding	$	37,600		$	37,500
Amount available for borrowing (1)		37,400			37,500
Loans pledged as collateral		49,003			62,260
Restricted cash and cash equivalents pledged as collateral		2,843			2,188
Interest rate		2.97	%		3.05	%
Term ABS 2009-1
Balance outstanding	$	–		$	27,581
Loans pledged as collateral		–			105,209
Restricted cash and cash equivalents pledged as collateral		–			13,526
Interest rate		–			5.68	%
Term ABS 2010-1
Balance outstanding	$	100,500		$	100,500
Loans pledged as collateral		123,609			125,541
Restricted cash and cash equivalents pledged as collateral		14,288			14,116
Interest rate		2.36	%		2.36	%
Term ABS 2011-1
Balance outstanding	$	200,500		$	200,500
Loans pledged as collateral		244,531			248,167
Restricted cash and cash equivalents pledged as collateral		25,300			23,268
Interest rate		2.90	%		2.90	%
Term ABS 2012-1
Balance outstanding	$	201,250		$	–
Loans pledged as collateral		246,756			–
Restricted cash and cash equivalents pledged as collateral		23,561			–
Interest rate		2.38	%		–
Term ABS 2012-2
Balance outstanding	$	252,000		$	–
Loans pledged as collateral		312,152			–
Restricted cash and cash equivalents pledged as collateral		51,103			–
Interest rate		1.63	%		–
Senior Notes
Balance outstanding (2)	$	350,307		$	350,378
Interest rate		9.13	%		9.13	%

(1) Availability may be limited by the amount of assets pledged as collateral.

As of September 30, 2012 and December 31, 2011, the outstanding balance presented for the Senior Notes includes a net unamortized debt premium of $0.3million and $0.4 million, respectively.

Term ABS Financings [Member]

Debt Instrument [Line Items]

Schedule Of General Information Of Financing Transaction

(Dollars in thousands)
Term ABS Financings	Close Date	Net Book Value of Loans Contributed at Closing		Revolving Period
Term ABS 2010-1	November 4, 2010	$	126,751	24 months (Through October 15, 2012)
Term ABS 2011-1	October 6, 2011	$	250,827	24 months (Through September 16, 2013)
Term ABS 2012-1	March 29, 2012	$	251,681	24 months (Through March 17, 2014)
Term ABS 2012-2	September 20, 2012	$	315,120	24 months (Through September 15, 2014)

XML

Debt (Schedule Of Outstanding Debt Amount) (Details) (USD $)	Sep. 30, 2012		Dec. 31, 2011
Debt Instrument [Line Items]
Balance outstanding	$ 115,800,000		$ 43,900,000
Balance outstanding	791,850,000		599,281,000
Balance outstanding	350,307,000		350,378,000
Restricted cash and cash equivalents pledged as collateral	167,706,000		104,679,000
Revolving Secured Line Of Credit [Member]
Debt Instrument [Line Items]
Balance outstanding	115,800,000		43,900,000
Amount available for borrowing	119,200,000	[1]	161,100,000	[1]
Interest rate	2.09%		2.55%
Warehouse Facility II [Member]
Debt Instrument [Line Items]
Balance outstanding	0		163,200,000
Amount available for borrowing	325,000,000	[1]	161,800,000	[1]
Loans pledged as collateral	0		242,119,000
Restricted cash and cash equivalents pledged as collateral	1,626,000		6,117,000
Interest rate	2.96%		2.99%
Warehouse Facility III [Member]
Debt Instrument [Line Items]
Balance outstanding	0		70,000,000
Amount available for borrowing	75,000,000	[1]	5,000,000	[1]
Loans pledged as collateral	0		91,601,000
Restricted cash and cash equivalents pledged as collateral	538,000		3,321,000
Interest rate	1.82%		1.89%
Warehouse Facility IV [Member]
Debt Instrument [Line Items]
Balance outstanding	37,600,000		37,500,000
Amount available for borrowing	37,400,000	[1]	37,500,000	[1]
Loans pledged as collateral	49,003,000		62,260,000
Restricted cash and cash equivalents pledged as collateral	2,843,000		2,188,000
Interest rate	2.97%		3.05%
Term ABS 2009-1 [Member]
Debt Instrument [Line Items]
Balance outstanding			27,581,000
Loans pledged as collateral			105,209,000
Restricted cash and cash equivalents pledged as collateral			13,526,000
Interest rate			5.68%
Term ABS 2010-1 [Member]
Debt Instrument [Line Items]
Balance outstanding	100,500,000		100,500,000
Loans pledged as collateral	123,609,000		125,541,000
Restricted cash and cash equivalents pledged as collateral	14,288,000		14,116,000
Interest rate	2.36%		2.36%
Term ABS 2011-1 [Member]
Debt Instrument [Line Items]
Balance outstanding	200,500,000		200,500,000
Loans pledged as collateral	244,531,000		248,167,000
Restricted cash and cash equivalents pledged as collateral	25,300,000		23,268,000
Interest rate	2.90%		2.90%
Term ABS 2012-1 [Member]
Debt Instrument [Line Items]
Balance outstanding	201,250,000
Loans pledged as collateral	246,756,000
Restricted cash and cash equivalents pledged as collateral	23,561,000
Interest rate	2.38%
Term ABS 2012-2 [Member]
Debt Instrument [Line Items]
Balance outstanding	252,000,000	[2]
Loans pledged as collateral	312,152,000
Restricted cash and cash equivalents pledged as collateral	51,103,000
Interest rate	1.63%
Senior Notes [Member]
Debt Instrument [Line Items]
Balance outstanding	350,307,000		350,378,000
Interest rate	9.13%		9.13%
Unamortized debt premium net	$ 300,000		$ 400,000

[1] Availability may be limited by the amount of assets pledged as collateral.

[2] As of September 30, 2012 and December 31, 2011, the outstanding balance presented for the Senior Notes includes a net unamortized debt premium of $0.3 million and $0.4 million, respectively.

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Loans Receivable (Summary Of Changes In Accretable Yield) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	$ 701,186		$ 586,039		$ 628,128		$ 476,089
New Consumer Loan assignments	138,518	[1]	136,135	[1]	454,386	[1]	441,738	[1]
Finance charge income	(137,495)		(117,905)		(397,563)		(338,238)
Forecast changes	8,145		8,002		22,728		30,099
Transfers	1,660	[2]	833	[2]	4,335	[2]	3,416	[2]
Balance, end of period	712,014		613,104		712,014		613,104
Dealer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	581,693		462,478		508,046		351,569
New Consumer Loan assignments	127,728	[1]	122,010	[1]	416,159	[1]	395,111	[1]
Finance charge income	(117,780)		(96,577)		(337,231)		(273,300)
Forecast changes	6,880		5,211		16,322		23,440
Transfers	(2,580)	[2]	(1,349)	[2]	(7,355)	[2]	(5,047)	[2]
Balance, end of period	595,941		491,773		595,941		491,773
Purchased Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	119,493		123,561		120,082		124,520
New Consumer Loan assignments	10,790	[1]	14,125	[1]	38,227	[1]	46,627	[1]
Finance charge income	(19,715)		(21,328)		(60,332)		(64,938)
Forecast changes	1,265		2,791		6,406		6,659
Transfers	4,240	[2]	2,182	[2]	11,690	[2]	8,463	[2]
Balance, end of period	$ 116,073		$ 121,331		$ 116,073		$ 121,331

[1] The Dealer Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related advances paid to Dealers.  The Purchased Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Purchase Program, less the related one-time payments made to Dealers.

[2] Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s outstanding Dealer Loan balance to Purchased Loans in the period this forfeiture occurs.

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Summary Of Significant Accounting Policies (Restricted Cash And Cash Equivalents) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Summary Of Significant Accounting Policies [Line Items]
Cash related to secured financings	$ 119,259	$ 62,536
Cash held in trusts for future vehicle service contract claims	48,447	42,143
Total restricted cash and cash equivalents	167,706	104,679
VSC Re [Member]
Summary Of Significant Accounting Policies [Line Items]
Total restricted cash and cash equivalents	48,412	42,026
Discontinued Profit Sharing Arrangement [Member]
Summary Of Significant Accounting Policies [Line Items]
Total restricted cash and cash equivalents	$ 35	$ 117

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Derivative And Hedging Instruments (Schedule Of Terms Of Interest Rate Cap Agreements) (Details) (USD $)	Sep. 30, 2012		Dec. 31, 2011
Warehouse Facility II [Member]
Derivative [Line Items]
Debt financing amount	$ 325,000,000	[1]
Warehouse Facility II [Member] | 6.75% Cap Interest Rate [Member]
Derivative [Line Items]
Start date	07/2011		09/2010
End date	06/2013		06/2013
Notional value	325,000,000		325,000,000
Cap Interest Rate	6.75%	[2],[3]	6.75%	[2]
Debt financing amount	325,000,000		325,000,000
Warehouse Facility III [Member]
Derivative [Line Items]
Debt financing amount	75,000,000	[1]
Notional amount in next fiscal year	56,300,000
Warehouse Facility III [Member] | 6.75% Cap Interest Rate [Member]
Derivative [Line Items]
Start date	09/2010		09/2010
End date	09/2013		09/2013
Notional value	37,500,000		37,500,000
Cap Interest Rate	6.75%	[2],[3]	6.75%	[2]
Debt financing amount	75,000,000		75,000,000
Warehouse Facility III [Member] | 5.00% Cap Interest Rate [Member]
Derivative [Line Items]
Start date	06/2012
End date	07/2015
Notional value	18,800,000	[4]
Cap Interest Rate	5.00%	[2],[3]
Debt financing amount	75,000,000
Warehouse Facility IV [Member]
Derivative [Line Items]
Debt financing amount	75,000,000	[1]
Warehouse Facility IV [Member] | 5.5% Cap Interest Rate [Member]
Derivative [Line Items]
Start date	08/2011		08/2011
End date	03/2014		03/2014
Notional value	75,000,000		75,000,000
Cap Interest Rate	5.50%	[2],[3]	5.50%	[2]
Debt financing amount	$ 75,000,000		$ 75,000,000

[1] Financing made available only to a specified subsidiary of the Company.

[2] Rate excludes the spread over the LIBOR rate or the commercial paper rate, as applicable.The notional amount increases to $56.3 million in September 2013 when the original Warehouse Facility III interest rate cap for $37.5 million ends.

[3] Rate excludes the spread over the LIBOR rate or the commercial paper rate, as applicable.

[4] The notional amount increases to $56.3 million in September 2013 when the original Warehouse Facility III interest rate cap for $37.5 million ends.

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Litigation And Contingent Liabilities (Details)	3 Months Ended
	Sep. 30, 2012 plaintiff
Litigation And Contingent Liabilities [Abstract]
Number of dealers alleging damages	6

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Stock Repurchases (Details) (USD $)			3 Months Ended
	Sep. 30, 2012	Mar. 26, 2012	Jun. 30, 2012 Open Market [Member]	Jun. 30, 2012 Tender Offer [Member]	Mar. 31, 2011 Tender Offer [Member]	Sep. 30, 2012 Senior Notes [Member]	Mar. 03, 2011 Senior Notes [Member]
Equity, Class of Treasury Stock [Line Items]
Increase in number of shares authorized for repurchase		1,000,000
Remaining number of shares authorized for repurchase	976,129
Common stock repurchased, shares			285,402	1,000,000	1,900,000
Common stock repurchased, value			$ 27,000,000	$ 84,500,000	$ 125,000,000
Tender offer, amount of shares for repurchase				1,000,000	1,900,000
Tender offer, share repurchase price per share				$ 84.45	$ 65.625
Senior notes principal amount						$ 350,000,000	$ 100,000,000

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Debt (Narrative) (Details) (USD $)	9 Months Ended		3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended								3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2012 item	Sep. 30, 2012 Warehouse Facilities [Member]	Mar. 31, 2012 Revolving Secured Line Of Credit [Member]	Sep. 30, 2012 Revolving Secured Line Of Credit [Member]	Jun. 30, 2012 Revolving Secured Line Of Credit [Member]	Mar. 31, 2012 Warehouse Facility II [Member]	Sep. 30, 2012 Warehouse Facility II [Member]		Sep. 30, 2012 Warehouse Facility III [Member]		Sep. 30, 2012 Warehouse Facility IV [Member]		Sep. 30, 2012 Senior Notes [Member]	Mar. 03, 2011 Senior Notes [Member]	Mar. 31, 2011 $100.0 Million Senior Notes [Member]	Sep. 30, 2012 $100.0 Million Senior Notes [Member]	Mar. 03, 2011 $100.0 Million Senior Notes [Member]	Mar. 31, 2010 $250.0 Million Senior Notes [Member]	Sep. 30, 2012 $250.0 Million Senior Notes [Member]	Feb. 01, 2010 $250.0 Million Senior Notes [Member]	Sep. 30, 2012 LIBOR [Member] Revolving Secured Line Of Credit [Member]	Mar. 31, 2012 LIBOR [Member] Revolving Secured Line Of Credit [Member]	Sep. 30, 2012 LIBOR [Member] Warehouse Facility II [Member]		Sep. 30, 2012 LIBOR [Member] Warehouse Facility III [Member]		Sep. 30, 2012 LIBOR [Member] Warehouse Facility IV [Member]		Sep. 30, 2012 Prime Rate [Member] Revolving Secured Line Of Credit [Member]	Mar. 31, 2012 Prime Rate [Member] Revolving Secured Line Of Credit [Member]	Sep. 30, 2012 Commercial Paper Rate [Member] Warehouse Facility II [Member]		Sep. 30, 2012 6.75% Cap Interest Rate [Member] Warehouse Facility II [Member]		Dec. 31, 2011 6.75% Cap Interest Rate [Member] Warehouse Facility II [Member]		Sep. 30, 2012 6.75% Cap Interest Rate [Member] Warehouse Facility III [Member]		Dec. 31, 2011 6.75% Cap Interest Rate [Member] Warehouse Facility III [Member]		Sep. 30, 2012 5.00% Cap Interest Rate [Member] Warehouse Facility III [Member]		Sep. 30, 2012 5.5% Cap Interest Rate [Member] Warehouse Facility IV [Member]		Dec. 31, 2011 5.5% Cap Interest Rate [Member] Warehouse Facility IV [Member]
Debt Instrument [Line Items]
Line of credit facility			$ 205,000,000	$ 235,000,000	$ 235,000,000
Maturity Date			Jun. 22, 2014	Jun. 22, 2015
Debt financing amount		475,000,000					325,000,000	[1]	75,000,000	[1]	75,000,000	[1]	350,000,000	100,000,000			100,000,000			250,000,000													325,000,000		325,000,000		75,000,000		75,000,000		75,000,000		75,000,000		75,000,000
Percentage of net book value of loans		80.00%		80.00%
Maximum hedging reserve	1,000,000
Cap Interest Rate																																	6.75%	[2],[3]	6.75%	[2]	6.75%	[2],[3]	6.75%	[2]	5.00%	[2],[3]	5.50%	[2],[3]	5.50%	[2]
Percentage of collections on contributed loans	6.00%
Number of wholly owned subsidiaries acquiring financing	5
Senior notes stated interest rate													9.125%
Debt maturity date						Sep. 10, 2013	Jun. 17, 2014	[1],[4]	Sep. 10, 2015	[1],[5]	Feb. 19, 2014	[1],[4]	Feb. 01, 2017
Close date, secured financings							Jun. 17, 2011	[1]	Jun. 29, 2012	[1]	Aug. 19, 2011	[1]				Mar. 03, 2011			Feb. 01, 2010
Percentage of price for senior notes issued																	106.00%			97.495%
Gross proceeds															106,000,000			243,700,000
Senior notes yield to maturity																	7.83%			9.625%
Debt covenants	$ 1
Basis spread on variable rate																					1.875%	2.25%	3.75%	[1],[6],[7]	1.60%	[1],[7]	2.75%	[1],[7]	0.875%	1.25%	2.75%	[1],[6],[7]

[1] Financing made available only to a specified subsidiary of the Company.

[2] Rate excludes the spread over the LIBOR rate or the commercial paper rate, as applicable.The notional amount increases to $56.3 million in September 2013 when the original Warehouse Facility III interest rate cap for $37.5 million ends.

[3] Rate excludes the spread over the LIBOR rate or the commercial paper rate, as applicable.

[4] Represents the revolving maturity date.  The outstanding balance will amortize after the maturity date based on the cash flows of the pledged assets.

[5] Represents the revolving maturity date.  The outstanding balance will amortize after the revolving maturity date and any amounts remaining on September 10, 2017 will be due.

[6] The LIBOR rate is used if funding is not available from the commercial paper market.

[7] Interest rate cap agreements are in place to limit the exposure to increasing interest rates.

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Description Of Business

9 Months Ended

Sep. 30, 2012

Description Of Business [Abstract]

Description Of Business

2.           DESCRIPTION OF BUSINESS

Since 1972, Credit Acceptance has offered automobile dealers financing programs that enable them to sell vehicles to consumers, regardless of their credit history.  Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our product, but who actually end up qualifying for traditional financing.

We refer to automobile dealers who participate in our programs and who share our commitment to changing consumers’ lives as “Dealers”.  Upon enrollment in our financing programs, the Dealer enters into a dealer servicing agreement with us that defines the legal relationship between Credit Acceptance and the Dealer.  The dealer servicing agreement assigns the responsibilities for administering, servicing, and collecting the amounts due on retail installment contracts (referred to as “Consumer Loans”) from the Dealers to us.  We are an indirect lender from a legal perspective, meaning the Consumer Loan is originated by the Dealer and assigned to us.

We have two programs: the Portfolio Program and the Purchase Program.  Under the Portfolio Program, we advance money to Dealers (referred to as a “Dealer Loan”) in exchange for the right to service the underlying Consumer Loans.  Under the Purchase Program, we buy the Consumer Loans from the Dealers (referred to as a “Purchased Loan”) and keep all amounts collected from the consumer.  Dealer Loans and Purchased Loans are collectively referred to as “Loans”.  The following table shows the percentage of Consumer Loans assigned to us based on unit volumes under each of the programs for each of the last seven quarters:

Quarter Ended	Portfolio Program			Purchase Program
March 31, 2011		92.9	%		7.1	%
June 30, 2011		92.1	%		7.9	%
September 30, 2011		92.3	%		7.7	%
December 31, 2011		92.6	%		7.4	%
March 31, 2012		93.3	%		6.7	%
June 30, 2012		93.6	%		6.4	%
September 30, 2012		93.8	%		6.2	%

Portfolio Program

As payment for the vehicle, the Dealer generally receives the following:

· a down payment from the consumer;

· a non-recourse cash payment (“advance”) from us; and

· after the advance has been recovered by us, the cash from payments made on the Consumer Loan, net of certain collection costs and our servicing fee (“Dealer Holdback”).

We record the amount advanced to the Dealer as a Dealer Loan, which is classified within Loans receivable in our consolidated balance sheets.  Cash advanced to the Dealer is automatically assigned to the Dealer’s open pool of advances.  We generally require Dealers to group advances into pools of at least 100 Consumer Loans.  At the Dealer’s option, a pool containing at least 100 Consumer Loans can be closed and subsequent advances assigned to a new pool.  All advances within a Dealer’s pool are secured by the future collections on the related Consumer Loans assigned to the pool.  For Dealers with more than one pool, the pools are cross-collateralized so the performance of other pools is considered in determining eligibility for Dealer Holdback.  We perfect our security interest in the Dealer Loans by taking possession of the Consumer Loans, which list us as lien holder on the vehicle title.

The dealer servicing agreement provides that collections received by us during a calendar month on Consumer Loans assigned by a Dealer are applied on a pool-by-pool basis as follows:

· First, to reimburse us for certain collection costs;

· Second, to pay us our servicing fee, which generally equals 20% of collections;

· Third, to reduce the aggregate advance balance and to pay any other amounts due from the Dealer to us; and

· Fourth, to the Dealer as payment of Dealer Holdback.

If the collections on Consumer Loans from a Dealer’s pool are not sufficient to repay the advance balance and any other amounts due to us, the Dealer will not receive Dealer Holdback.

Dealers have an opportunity to receive an accelerated Dealer Holdback payment each time 100 Consumer Loans have been assigned to us.  The amount paid to the Dealer is calculated using a formula that considers the forecasted collections and the advance balance on the related Consumer Loans.

Since typically the combination of the advance and the consumer’s down payment provides the Dealer with a cash profit at the time of sale, the Dealer’s risk in the Consumer Loan is limited.  We cannot demand repayment of the advance from the Dealer except in the event the Dealer is in default of the dealer servicing agreement.  Advances are made only after the consumer and Dealer have signed a Consumer Loan contract, we have received the original Consumer Loan contract and supporting documentation, and we have approved all of the related stipulations for funding.  The Dealer can also opt to repurchase Consumer Loans that have been assigned to us under the Portfolio Program, at their discretion, for a fee.

For accounting purposes, the transactions described under the Portfolio Program are not considered to be loans to consumers.  Instead, our accounting reflects that of a lender to the Dealer.  The classification as a Dealer Loan for accounting purposes is primarily a result of (1) the Dealer’s financial interest in the Consumer Loan and (2) certain elements of our legal relationship with the Dealer.

Purchase Program

The Purchase Program differs from our Portfolio Program in that the Dealer receives a one-time payment from us at the time of assignment to purchase the Consumer Loan instead of a cash advance at the time of assignment and future Dealer Holdback payments.  For accounting purposes, the transactions described under the Purchase Program are considered to be originated by the Dealer and then purchased by us.

Program Enrollment

Dealers may enroll in our program by choosing one of our two enrollment options (referred to as “Option A” and “Option B”).  In recent years, the terms of Option A have remained consistent while the terms of Option B have varied.  The following table summarizes the terms of our enrollment options:

Effective Period	Option A	Option B
Since June 1, 2011	Upfront, one-time fee of $9,850	Agreement to allow us to retain 50% of their first accelerated Dealer Holdback payment
From September 1, 2009 to May 31, 2011	Upfront, one-time fee of $9,850	Upfront, one-time fee of $1,950 and agreement to allow us to retain 50% of their first accelerated Dealer Holdback payment

For Dealers enrolling in our program, access to the Purchase Program is typically only granted after the first accelerated Dealer Holdback payment has been received under the Portfolio Program.

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Stock-Based Compensation Plans (Narrative) (Details)	3 Months Ended	9 Months Ended
	Mar. 31, 2012	Sep. 30, 2012		Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total authorized shares for plan issuance		2,000,000
Number of additional shares autorized for issuance	500,000
Shares available for issuance		342,300
Awards granted		313,000	[1]	25,000	[2]
Value of common stock for each restricted stock unit		1
Weighted average recognition period		3 years 6 months
Restricted Stock [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted	190,000
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		5 years
Ten Year Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		10 years
Ten Year Vesting [Member] | Restricted Stock [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted	90,000
Ten Year Vesting [Member] | Restricted Stock Units (RSUs) [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted	310,000
Five Year Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		5 years
Five Year Vesting [Member] | Restricted Stock [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted	100,000
Maximum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		5 years
Minimum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years

[1] The distribution date of vested restricted stock units is February 18, 2019 for 3 restricted stock units.  For 310 restricted stock units, the vested restricted stock units will be distributed in equal installments on December 31, 2022, 2023, 2024, 2025 and 2026.

[2] The distribution date of vested restricted stock units is February 22, 2018 for 5 restricted stock units and February 18, 2019 for 20 restricted stock units.

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Loans Receivables (Summary Of Information Related To New Consumer Loan Assignments) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Contractual net cash flows at the time of assignment	$ 505,137	[1]	$ 492,781	[1]	$ 1,669,156	[1]	$ 1,570,664	[1]
Expected net cash flows at the time of assignment	457,135	[2]	445,247	[2]	1,509,103	[2]	1,424,552	[2]
Fair value at the time of assignment	318,617	[3]	309,112	[3]	1,054,717	[3]	982,814	[3]
Dealer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Contractual net cash flows at the time of assignment	454,859	[1]	431,399	[1]	1,495,980	[1]	1,378,850	[1]
Expected net cash flows at the time of assignment	421,107	[2]	400,405	[2]	1,384,884	[2]	1,283,713	[2]
Fair value at the time of assignment	293,379	[3]	278,395	[3]	968,725	[3]	888,602	[3]
Purchased Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Contractual net cash flows at the time of assignment	50,278	[1]	61,382	[1]	173,176	[1]	191,814	[1]
Expected net cash flows at the time of assignment	36,028	[2]	44,842	[2]	124,219	[2]	140,839	[2]
Fair value at the time of assignment	$ 25,238	[3]	$ 30,717	[3]	$ 85,992	[3]	$ 94,212	[3]

[1] The Dealer Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we would be required to make if we collected all of the contractual repayments.  The Purchased Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Purchase Program.

[2] The Dealer Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make.  The Purchased Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program.

[3] The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program.  The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2012

Income Taxes [Abstract]

Schedule Of Reconciliation Of The U.S. Federal Statutory Rate To Effective Tax Rate

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2012			2011			2012			2011
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%		35.0	%
State income taxes		1.7	%		1.5	%		1.6	%		1.9	%
Changes in reserve for uncertain tax positions as a result of settlements and lapsed statutes and related interest		-0.4	%		-0.2	%		-0.4	%		-0.6	%
Other		0.5	%		0.2	%		0.3	%		0.0	%
Effective tax rate		36.8	%		36.5	%		36.5	%		36.3	%

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Schedule Of Related Party Loan Activity

(In thousands)	For the Three Months Ended September 30,
	2012				2011
	Affiliated Dealer activity		% of consolidated		Affiliated Dealer activity		% of consolidated
Dealer Loan revenue	$	284	0.2	%	$	349	0.4	%
New Consumer Loan assignments (1)		928	0.3	%		128	0.0	%
Accelerated Dealer Holdback payments		79	0.8	%		0	0.0	%
Dealer Holdback payments		692	2.6	%		652	2.7	%

(In thousands)	For the Nine Months Ended September 30,
	2012				2011
	Affiliated Dealer activity		% of consolidated		Affiliated Dealer activity		% of consolidated
Dealer Loan revenue	$	849	0.2	%	$	1,330	0.5	%
New Consumer Loan assignments (1)		2,662	0.3	%		788	0.1	%
Accelerated Dealer Holdback payments		149	0.4	%		24	0.1	%
Dealer Holdback payments		2,643	2.9	%		1,757	3.0	%

(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

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Fair Value Of Financial Instruments (Schedule Of Comparison Of The Carrying Value And Estimated Fair Value Of These Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	$ 5,725	$ 4,657
Restricted cash and cash equivalents	167,706	104,679
Restricted securities available for sale	0	810
Net investment in Loans receivable	1,895,056	1,615,009
Derivative instruments	18	16
Revolving secured line of credit	115,800	43,900
Secured financing	801,226	598,622
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	5,725	4,657
Restricted cash and cash equivalents	167,706	104,679
Restricted securities available for sale	0	810
Net investment in Loans receivable	1,876,718	1,598,573
Derivative instruments	18	16
Revolving secured line of credit	115,800	43,900
Secured financing	791,850	599,281
Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	5,725	4,657
Restricted cash and cash equivalents	167,706	104,679
Restricted securities available for sale	0	810
Net investment in Loans receivable	1,895,056	1,615,009
Derivative instruments	18	16
Revolving secured line of credit	115,800	43,900
Secured financing	801,226	598,622
Mortgages [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes Payable, Fair Value Disclosure	4,104	4,288
Mortgages [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes Payable, Fair Value Disclosure	4,104	4,288
Mortgages [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes Payable, Fair Value Disclosure	4,104	4,288
Senior Notes [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes Payable, Fair Value Disclosure	385,875	365,500
Senior Notes [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes Payable, Fair Value Disclosure	350,307	350,378
Senior Notes [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes Payable, Fair Value Disclosure	$ 385,875	$ 365,500

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Loans Receivable (Schedule Of Consumer Loans Credit Quality) (Details)	Sep. 30, 2012 Loans Originating In 2003 [Member]		Jun. 30, 2012 Loans Originating In 2003 [Member]		Dec. 31, 2011 Loans Originating In 2003 [Member]		Dec. 31, 2003 Loans Originating In 2003 [Member]		Sep. 30, 2012 Loans Originating In 2004 [Member]		Jun. 30, 2012 Loans Originating In 2004 [Member]		Dec. 31, 2011 Loans Originating In 2004 [Member]		Dec. 31, 2004 Loans Originating In 2004 [Member]		Sep. 30, 2012 Loans Originating In 2005 [Member]		Jun. 30, 2012 Loans Originating In 2005 [Member]		Dec. 31, 2011 Loans Originating In 2005 [Member]		Dec. 31, 2005 Loans Originating In 2005 [Member]		Sep. 30, 2012 Loans Originating In 2006 [Member]		Jun. 30, 2012 Loans Originating In 2006 [Member]		Dec. 31, 2011 Loans Originating In 2006 [Member]		Dec. 31, 2006 Loans Originating In 2006 [Member]		Sep. 30, 2012 Loans Originating In 2007 [Member]		Jun. 30, 2012 Loans Originating In 2007 [Member]		Dec. 31, 2011 Loans Originating In 2007 [Member]		Dec. 31, 2007 Loans Originating In 2007 [Member]		Sep. 30, 2012 Loans Originating In 2008 [Member]		Jun. 30, 2012 Loans Originating In 2008 [Member]		Dec. 31, 2011 Loans Originating In 2008 [Member]		Dec. 31, 2008 Loans Originating In 2008 [Member]		Sep. 30, 2012 Loans Originating In 2009 [Member]		Jun. 30, 2012 Loans Originating In 2009 [Member]		Dec. 31, 2011 Loans Originating In 2009 [Member]		Dec. 31, 2009 Loans Originating In 2009 [Member]		Sep. 30, 2012 Loans Originating In 2010 [Member]		Jun. 30, 2012 Loans Originating In 2010 [Member]		Dec. 31, 2011 Loans Originating In 2010 [Member]		Dec. 31, 2010 Loans Originating In 2010 [Member]		Sep. 30, 2012 Loans Originating In 2011 [Member]		Jun. 30, 2012 Loans Originating In 2011 [Member]		Dec. 31, 2011 Loans Originating In 2011 [Member]		Sep. 30, 2012 Loans Originating In 2012 [Member]		Jun. 30, 2012 Loans Originating In 2012 [Member]		Sep. 30, 2012 Loans Originating In Quarters One And Two Two Thousand Twelve [Member]	Jun. 30, 2012 Loans Originating In Quarters One And Two Two Thousand Twelve [Member]	Sep. 30, 2012 Loans Originating In Quarter Three Two Thousand Twelve [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Forecasted Collection Percentage	73.80%	[1]	73.80%	[1]	73.70%	[1]			73.00%	[1]	73.00%	[1]	73.00%	[1]			73.50%	[1]	73.60%	[1]	73.60%	[1]			70.00%	[1]	70.00%	[1]	70.00%	[1]			68.10%	[1]	68.10%	[1]	68.10%	[1]			70.30%	[1]	70.30%	[1]	70.00%	[1]			79.50%	[1]	79.60%	[1]	79.40%	[1]			77.20%	[1]	77.10%	[1]	76.80%	[1]			73.70%	[1]	73.60%	[1]	73.20%	[1]	71.60%	[1],[2]	71.90%	[1],[2]	72.00%	71.90%	70.60%
Initial Forecasted Collection Percentage							72.00%	[1]							73.00%	[1]							74.00%	[1]							71.40%	[1]							70.70%	[1]							69.70%	[1]							71.90%	[1]							73.60%	[1]					72.50%	[1]	71.10%	[1],[2]
Variance In Forecasted Collection Percentage			0.00%		0.10%						0.00%		0.00%						(0.10%)		(0.10%)						0.00%		0.00%						0.00%		0.00%						0.00%		0.30%						(0.10%)		0.10%						0.10%		0.40%						0.10%		0.50%				(0.30%)	[2]	0.10%
Variance In Initial Forecasted Collection Percentage							1.80%								0.00%								(0.50%)								(1.40%)								(2.60%)								0.60%								7.60%								3.60%						1.20%		0.50%	[2]

[1] Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment.  Contractual repayments include both principal and interest.The forecasted collection rate for 2012 Consumer Loans as of September 30, 2012 includes both Consumer Loans that were in our portfolio as of June 30, 2012 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments:

[2] The forecasted collection rate for 2012 Consumer Loans as of September 30, 2012 includes both Consumer Loans that were in our portfolio as of June 30, 2012 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments

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Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Net income per common share:

Schedule Of Weighted Average Shares Outstanding Basic And Diluted

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Weighted average shares outstanding:
Common shares		24,337		25,605		25,074		25,991
Vested restricted stock units		571		428		555		406
Basic number of weighted average shares outstanding		24,908		26,033		25,629		26,397
Dilutive effect of stock options		46		70		50		116
Dilutive effect of restricted stock and restricted stock units		8		33		27		60
Dilutive number of weighted average shares outstanding		24,962		26,136		25,706		26,573

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Stock-Based Compensation Plans (Tables)

9 Months Ended

Sep. 30, 2012

Share-based Compensation [Abstract]

Summary Of Restricted Stock Activity

(In thousands)	Number of Shares
	For the Nine Months Ended September 30,
Restricted Stock	2012		2011
Outstanding Beginning Balance	48		112
Granted	199		9
Vested	(37	)	(63	)
Forfeited	(3	)	(7	)
Outstanding Ending Balance	207		51

Summary Of Restricted Stock Units Activity

(In thousands, except per share data)	Nonvested					Vested				Total
Restricted Stock Units	Number of Restricted Stock Units			Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units		Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units
Outstanding as of December 31, 2011		348		$	24.06		428	$	22.14		776
Granted		313			106.32		-		-		313		(1	)
Vested		(143	)		21.48		143		21.48		-		(2	)
Forfeited		(8	)		15.80		-		-		(8	)
Outstanding as of September 30, 2012		510		$	75.43		571	$	21.97		1,081
(In thousands, except per share data)	Nonvested					Vested				Total
Restricted Stock Units	Number of Restricted Stock Units			Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units		Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units
Outstanding as of December 31, 2010		521		$	19.99		270	$	22.94		791
Granted		25			58.54		-		-		25		(3	)
Vested		(158	)		20.99		158		20.99		-		(4	)
Forfeited		(34	)		20.50		-		-		(34	)
Outstanding as of September 30, 2011		354		$	22.07		428	$	22.14		782

(1) The distribution date of vested restricted stock units is February 18, 2019 for 3 restricted stock units.  For 310 restricted stock units, the vested restricted stock units will be distributed in equal installments on December 31, 2022, 2023, 2024, 2025 and 2026.

(2) The distribution date of vested restricted stock units is February 22, 2014 for 60 restricted stock units, February 22, 2016 for 77 restricted stock units and February 22, 2017 for 6 restricted stock units.

(3) The distribution date of vested restricted stock units is February 22, 2018 for 5 restricted stock units and February 18, 2019 for 20 restricted stock units.

(4) The distribution date of vested restricted stock units is February 22, 2014 for 60 restricted stock units, February 22, 2016 for 90 restricted stock units and February 22, 2017 for 8 restricted stock units.

Schedule Of Stock Based Compensation Expense

(In thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2012			2011			2012			2011
Restricted stock		$	1,101		$	113		$	2,370		$	493
Restricted stock units			2,944			251			6,231			1,063
Total		$	4,045		$	364		$	8,601		$	1,556

Schedule Of Future Share-Based Compensation Cost

(In thousands)
Year	Restricted Stock Units		Restricted Stock		Total Projected Expense
Remainder of 2012	$	2,294	$	913	$	3,207
2013		7,624		3,086		10,710
2014		5,263		2,350		7,613
2015		4,298		2,029		6,327
2016		3,639		1,862		5,501
Thereafter		7,060		8,722		15,782
Total	$	30,178	$	18,962	$	49,140

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Basis Of Presentation

9 Months Ended

Sep. 30, 2012

Basis Of Presentation [Abstract]

Basis Of Presentation

1.           BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for interim periods are not necessarily indicative of actual results achieved for full fiscal years.  The consolidated balance sheet as of December 31, 2011 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2011 for Credit Acceptance Corporation (the “Company”, “Credit Acceptance”, “we”, “our” or “us”).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

We have evaluated events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2012 for items that could potentially be recognized or disclosed in these financial statements.  We did not identify any items which would require disclosure in or adjustment to the financial statements, except as disclosed in Note 13 of these consolidated financial statements

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Description Of Business (Narrative and Enrollment Options Table) (Details) (USD $)	9 Months Ended	16 Months Ended	29 Months Ended	16 Months Ended	29 Months Ended
	Sep. 30, 2012 loan item	Sep. 30, 2012 Option A [Member]	May 31, 2011 Option A [Member]	Sep. 30, 2012 Option B [Member]	May 31, 2011 Option B [Member]
Description Of Business [Line Items]
Number of consumers required to group advances	100
Servicing fee percentage in collections	20.00%
One-time enrollment fee in program		$ 9,850	$ 9,850		$ 1,950
Percentage of enrollment fee of first accelerated dealer holdback payment				50.00%	50.00%
Number Of Business Programs	2

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Loans Receivable (Schedule Of Loans Receivable) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Dec. 31, 2010
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	$ 2,047,481	$ 1,977,794	$ 1,752,891	$ 1,674,431	$ 1,582,905	$ 1,344,881
Allowance for credit losses	(170,763)	(161,905)	(154,318)	(149,028)	(144,819)	(126,868)
Loans receivable, net	1,876,718		1,598,573
Dealer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	1,807,701	1,736,578	1,506,539	1,426,866	1,331,973	1,082,039
Allowance for credit losses	(161,284)	(152,031)	(141,712)	(136,157)	(131,728)	(113,227)
Loans receivable, net	1,646,417		1,364,827
Purchased Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	239,780	241,216	246,352	247,565	250,932	262,842
Allowance for credit losses	(9,479)	(9,874)	(12,606)	(12,871)	(13,091)	(13,641)
Loans receivable, net	$ 230,301		$ 233,746

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Derivative And Hedging Instruments (Schedule Of Fair Values Of Derivative Instruments In Consolidated Balance Sheets) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Derivatives, Fair Value [Line Items]
Total Asset Derivatives	$ 18	$ 16
Other Assets [Member] | Not Designated as Hedging Instrument [Member] | Interest Rate Caps [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives	$ 18	$ 16

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
ASSETS:
Cash and cash equivalents	$ 5,725	$ 4,657
Restricted cash and cash equivalents	167,706	104,679
Restricted securities available for sale	0	810
Loans receivable (including $5,634 and $4,949 from affiliates as of September 30, 2012 and December 31, 2011, respectively)	2,047,481	1,752,891
Allowance for credit losses	(170,763)	(154,318)
Loans receivable, net	1,876,718	1,598,573
Property and equipment, net	21,863	18,472
Income taxes receivable	0	506
Other assets	31,310	30,901
Total Assets	2,103,322	1,758,598
Liabilities:
Accounts payable and accrued liabilities	98,131	95,858
Revolving secured line of credit	115,800	43,900
Secured financing	791,850	599,281
Mortgage note	4,104	4,288
Senior notes	350,307	350,378
Deferred income taxes, net	135,334	123,449
Income taxes payable	9,991	1,493
Total Liabilities	1,505,517	1,218,647
Commitments and Contingencies - See Note 13
Shareholders' Equity:
Preferred stock, $.01 par value, 1,000 shares authorized, none issued
Common stock, $.01 par value, 80,000 shares authorized, 24,551 and 25,624 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively	246	256
Paid-in capital	49,455	38,801
Retained earnings	548,104	500,888
Accumulated other comprehensive income	0	6
Total Shareholders' Equity	597,805	539,951
Total Liabilities and Shareholders' Equity	$ 2,103,322	$ 1,758,598

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Loans Receivable (Schedule Of Consumer Loans Performance) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Dec. 31, 2010
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	$ 2,047,481	$ 1,977,794	$ 1,752,891	$ 1,674,431	$ 1,582,905	$ 1,344,881
Allowance for credit losses	(170,763)	(161,905)	(154,318)	(149,028)	(144,819)	(126,868)
Loans receivable, net	1,876,718		1,598,573
Loan Pool Performance Meets Or Exceeds Initial Estimates [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	768,590		704,428
Allowance for credit losses	0		0
Loans receivable, net	768,590		704,428
Loan Pool Performance Less Than Initial Estimates [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	1,278,892		1,048,463
Allowance for credit losses	(170,763)		(154,318)
Loans receivable, net	1,108,129		894,145
Dealer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	1,807,701	1,736,578	1,506,539	1,426,866	1,331,973	1,082,039
Allowance for credit losses	(161,284)	(152,031)	(141,712)	(136,157)	(131,728)	(113,227)
Loans receivable, net	1,646,417		1,364,827
Dealer Loans [Member] | Loan Pool Performance Meets Or Exceeds Initial Estimates [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	572,223		511,926
Allowance for credit losses	0		0
Loans receivable, net	572,223		511,926
Dealer Loans [Member] | Loan Pool Performance Less Than Initial Estimates [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	1,235,479		994,613
Allowance for credit losses	(161,284)		(141,712)
Loans receivable, net	1,074,195		852,901
Purchased Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	239,780	241,216	246,352	247,565	250,932	262,842
Allowance for credit losses	(9,479)	(9,874)	(12,606)	(12,871)	(13,091)	(13,641)
Loans receivable, net	230,301		233,746
Purchased Loans [Member] | Loan Pool Performance Meets Or Exceeds Initial Estimates [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	196,367		192,502
Allowance for credit losses	0		0
Loans receivable, net	196,367		192,502
Purchased Loans [Member] | Loan Pool Performance Less Than Initial Estimates [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	43,413		53,850
Allowance for credit losses	(9,479)		(12,606)
Loans receivable, net	$ 33,934		$ 41,244

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Consolidated Statements Of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Consolidated Statements Of Comprehensive Income [Abstract]
Unrealized loss on cash flow hedge, tax effect	$ 0	$ 0	$ 0	$ 6
Reclassification adjustment for cash flow hedge, tax effect	0	(18)	0	(71)
Unrealized gain on securities, tax effect	0	1	(8)	(1)
Reclassification adjustment for securities, tax effect	$ 8	$ 1	$ 8	$ 1

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Income Taxes (Schedule Of Reconciliation Of The U.S. Federal Statutory Rate To Effective Tax Rate) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Taxes [Abstract]
U.S. federal statutory rate	35.00%	35.00%	35.00%	35.00%
State income taxes	1.70%	1.50%	1.60%	1.90%
Changes in reserve for uncertain tax positions as a result of settlements and lapsed statutes and related interest	(0.40%)	(0.20%)	(0.40%)	(0.60%)
Other	0.50%	0.20%	0.30%	0.00%
Effective tax rate	36.80%	36.50%	36.50%	36.30%

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Summary Of Significant Accounting Policies (Summary Of Reinsurance Activity) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Summary Of Significant Accounting Policies [Abstract]
Net assumed written premiums	$ 11,479	$ 11,293	$ 39,813	$ 37,419
Net premiums earned	12,206	10,462	34,987	29,195
Provision for claims	9,122	8,363	26,704	22,733
Amortization of capitalized acquisition costs	$ 342	$ 288	$ 952	$ 747

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Stock-Based Compensation Plans (Schedule Of Stock Based Compensation Expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 4,045	$ 364	$ 8,601	$ 1,556
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	1,101	113	2,370	493
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,944	$ 251	$ 6,231	$ 1,063

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Description Of Business (Tables)

9 Months Ended

Sep. 30, 2012

Description Of Business [Abstract]

Schedule Of Percentage Of Consumer Loans Assigned Based On Unit Volumes

Quarter Ended	Portfolio Program			Purchase Program
March 31, 2011		92.9	%		7.1	%
June 30, 2011		92.1	%		7.9	%
September 30, 2011		92.3	%		7.7	%
December 31, 2011		92.6	%		7.4	%
March 31, 2012		93.3	%		6.7	%
June 30, 2012		93.6	%		6.4	%
September 30, 2012		93.8	%		6.2	%

Schedule Of Loan Program Enrollment Options

Effective Period	Option A	Option B
Since June 1, 2011	Upfront, one-time fee of $9,850	Agreement to allow us to retain 50% of their first accelerated Dealer Holdback payment
From September 1, 2009 to May 31, 2011	Upfront, one-time fee of $9,850	Upfront, one-time fee of $1,950 and agreement to allow us to retain 50% of their first accelerated Dealer Holdback payment

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Summary Of Significant Accounting Policies (Schedule Of Trust Assets And Reinsurance Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012		Dec. 31, 2011
Summary Of Significant Accounting Policies [Line Items]
Restricted cash and cash equivalents	$ 167,706		$ 104,679
Accounts payable and accrued liabilities	98,131		95,858
Trust Assets [Member]
Summary Of Significant Accounting Policies [Line Items]
Restricted cash and cash equivalents	48,412		42,026
Unearned Premium [Member]
Summary Of Significant Accounting Policies [Line Items]
Accounts payable and accrued liabilities	37,161		32,335
Claims Reserve [Member]
Summary Of Significant Accounting Policies [Line Items]
Accounts payable and accrued liabilities	$ 1,515	[1]	$ 1,297	[1]

[1] The claims reserve is estimated based on historical claims experience.

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Loans Receivable (Tables)

9 Months Ended

Sep. 30, 2012

Loans Receivable [Abstract]

Schedule Of Loans Receivable

(In thousands)	As of September 30, 2012
	Dealer Loans			Purchased Loans			Total
Loans receivable	$	1,807,701		$	239,780		$	2,047,481
Allowance for credit losses		(161,284	)		(9,479	)		(170,763	)
Loans receivable, net	$	1,646,417		$	230,301		$	1,876,718
(In thousands)	As of December 31, 2011
	Dealer Loans			Purchased Loans			Total
Loans receivable	$	1,506,539		$	246,352		$	1,752,891
Allowance for credit losses		(141,712	)		(12,606	)		(154,318	)
Loans receivable, net	$	1,364,827		$	233,746		$	1,598,573

Summary Of Changes In Loans Receivable

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	1,736,578			$	241,216			$	1,977,794
New Consumer Loan assignments (1)			293,379				25,238				318,617
Principal collected on Loans receivable			(252,398	)			(32,617	)			(285,015	)
Accelerated Dealer Holdback payments			9,884				0				9,884
Dealer Holdback payments			27,118				0				27,118
Transfers (2)			(5,946	)			5,946				0
Write-offs			(1,480	)			(26	)			(1,506	)
Recoveries (3)			582				23				605
Net change in other loans			(16	)			0				(16	)
Balance, end of period		$	1,807,701			$	239,780			$	2,047,481
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	1,331,973			$	250,932			$	1,582,905
New Consumer Loan assignments (1)			278,395				30,717				309,112
Principal collected on Loans receivable			(216,860	)			(36,970	)			(253,830	)
Accelerated Dealer Holdback payments			12,859				0				12,859
Dealer Holdback payments			23,985				0				23,985
Transfers (2)			(2,933	)			2,933				0
Write-offs			(736	)			(68	)			(804	)
Recoveries (3)			442				21				463
Net change in other loans			(259	)			0				(259	)
Balance, end of period		$	1,426,866			$	247,565			$	1,674,431

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,506,539		$	246,352		$	1,752,891
New Consumer Loan assignments (1)		968,725			85,992			1,054,717
Principal collected on Loans receivable		(774,361	)		(108,252	)		(882,613	)
Accelerated Dealer Holdback payments		34,107			0			34,107
Dealer Holdback payments		89,734			0			89,734
Transfers (2)		(16,150	)		16,150			0
Write-offs		(2,483	)		(532	)		(3,015	)
Recoveries (3)		1,674			70			1,744
Net change in other loans		(84	)		0			(84	)
Balance, end of period	$	1,807,701		$	239,780		$	2,047,481
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,082,039		$	262,842		$	1,344,881
New Consumer Loan assignments (1)		888,602			94,212			982,814
Principal collected on Loans receivable		(628,406	)		(119,836	)		(748,242	)
Accelerated Dealer Holdback payments		37,275			0			37,275
Dealer Holdback payments		58,734			0			58,734
Transfers (2)		(10,490	)		10,490			0
Write-offs		(1,563	)		(207	)		(1,770	)
Recoveries (3)		1,472			64			1,536
Net change in other loans		(797	)		0			(797	)
Balance, end of period	$	1,426,866		$	247,565		$	1,674,431

(1)The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program.  The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

(2)Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s outstanding Dealer Loan balance to Purchased Loans in the period this forfeiture occurs.

(3)Represents collections received on previously written off Loans.

Summary Of Changes In Accretable Yield

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	581,693			$	119,493			$	701,186
New Consumer Loan assignments (1)			127,728				10,790				138,518
Finance charge income			(117,780	)			(19,715	)			(137,495	)
Forecast changes			6,880				1,265				8,145
Transfers (2)			(2,580	)			4,240				1,660
Balance, end of period		$	595,941			$	116,073			$	712,014
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	462,478			$	123,561			$	586,039
New Consumer Loan assignments (1)			122,010				14,125				136,135
Finance charge income			(96,577	)			(21,328	)			(117,905	)
Forecast changes			5,211				2,791				8,002
Transfers (2)			(1,349	)			2,182				833
Balance, end of period		$	491,773			$	121,331			$	613,104

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	508,046			$	120,082			$	628,128
New Consumer Loan assignments (1)			416,159				38,227				454,386
Finance charge income			(337,231	)			(60,332	)			(397,563	)
Forecast changes			16,322				6,406				22,728
Transfers (2)			(7,355	)			11,690				4,335
Balance, end of period		$	595,941			$	116,073			$	712,014
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	351,569			$	124,520			$	476,089
New Consumer Loan assignments (1)			395,111				46,627				441,738
Finance charge income			(273,300	)			(64,938	)			(338,238	)
Forecast changes			23,440				6,659				30,099
Transfers (2)			(5,047	)			8,463				3,416
Balance, end of period		$	491,773			$	121,331			$	613,104

(1)The Dealer Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related advances paid to Dealers.  The Purchased Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Purchase Program, less the related one-time payments made to Dealers.

(2)Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s outstanding Dealer Loan balance and related expected future net cash flows to Purchased Loans in the period this forfeiture occurs.

Summary Of Information Related To New Consumer Loan Assignments

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Contractual net cash flows at the time of assignment (1)		$	454,859		$	50,278		$	505,137
Expected net cash flows at the time of assignment (2)			421,107			36,028			457,135
Fair value at the time of assignment (3)			293,379			25,238			318,617
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Contractual net cash flows at the time of assignment (1)		$	431,399		$	61,382		$	492,781
Expected net cash flows at the time of assignment (2)			400,405			44,842			445,247
Fair value at the time of assignment (3)			278,395			30,717			309,112

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Contractual net cash flows at the time of assignment (1)		$	1,495,980		$	173,176		$	1,669,156
Expected net cash flows at the time of assignment (2)			1,384,884			124,219			1,509,103
Fair value at the time of assignment (3)			968,725			85,992			1,054,717
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Contractual net cash flows at the time of assignment (1)		$	1,378,850		$	191,814		$	1,570,664
Expected net cash flows at the time of assignment (2)			1,283,713			140,839			1,424,552
Fair value at the time of assignment (3)			888,602			94,212			982,814

(1)The Dealer Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we would be required to make if we collected all of the contractual repayments.  The Purchased Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Purchase Program.

(2)The Dealer Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make.  The Purchased Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program.

(3)The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program.  The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

Schedule Of Consumer Loans Forecasted Collection Percentage [Text Block]

	Forecasted Collection Percentage as of (1)												Variance in Forecasted Collection Percentage from
Consumer Loan Assignment Year	September 30, 2012			June 30, 2012			December 31, 2011			Initial Forecast			June 30, 2012			December 31, 2011			Initial Forecast
2003		73.8	%		73.8	%		73.7	%		72.0	%		0.0	%		0.1	%		1.8	%
2004		73.0	%		73.0	%		73.0	%		73.0	%		0.0	%		0.0	%		0.0	%
2005		73.5	%		73.6	%		73.6	%		74.0	%		-0.1	%		-0.1	%		-0.5	%
2006		70.0	%		70.0	%		70.0	%		71.4	%		0.0	%		0.0	%		-1.4	%
2007		68.1	%		68.1	%		68.1	%		70.7	%		0.0	%		0.0	%		-2.6	%
2008		70.3	%		70.3	%		70.0	%		69.7	%		0.0	%		0.3	%		0.6	%
2009		79.5	%		79.6	%		79.4	%		71.9	%		-0.1	%		0.1	%		7.6	%
2010		77.2	%		77.1	%		76.8	%		73.6	%		0.1	%		0.4	%		3.6	%
2011		73.7	%		73.6	%		73.2	%		72.5	%		0.1	%		0.5	%		1.2	%
2012 (2)		71.6	%		71.9	%		-			71.1	%		-0.3	%		-			0.5	%

(1) Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment.  Contractual repayments include both principal and interest.

(2) The forecasted collection rate for 2012 Consumer Loans as of September 30, 2012 includes both Consumer Loans that were in our portfolio as of June 30, 2012 and Consumer Loans assigned during the most recent quarter.  The following table provides forecasted collection rates for each of these segments:

	Forecasted Collection Percentage as of
2012 Consumer Loan Assignment Period	September 30, 2012			June 30, 2012			Variance
January 1, 2012 through June 30, 2012		72.0	%		71.9	%		0.1	%
July 1, 2012 through September 30, 2012		70.6	%		-			-

Schedule Of Consumer Loans Performance

(In thousands)	As of September 30, 2012
	Loan Pool Performance Meets or Exceeds Initial Estimates						Loan Pool Performance Less than Initial Estimates
	Dealer Loans		Purchased Loans		Total		Dealer Loans			Purchased Loans			Total
Loans receivable	$	572,223	$	196,367	$	768,590	$	1,235,479		$	43,413		$	1,278,892
Allowance for credit losses		0		0		0		(161,284	)		(9,479	)		(170,763	)
Loans receivable, net	$	572,223	$	196,367	$	768,590	$	1,074,195		$	33,934		$	1,108,129
(In thousands)	As of December 31, 2011
	Loan Pool Performance Meets or Exceeds Initial Estimates						Loan Pool Performance Less than Initial Estimates
	Dealer Loans		Purchased Loans		Total		Dealer Loans			Purchased Loans			Total
Loans receivable	$	511,926	$	192,502	$	704,428	$	994,613		$	53,850		$	1,048,463
Allowance for credit losses		0		0		0		(141,712	)		(12,606	)		(154,318	)
Loans receivable, net	$	511,926	$	192,502	$	704,428	$	852,901		$	41,244		$	894,145

Summary Of Changes In Allowance For Credit Losses

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	152,031			$	9,874			$	161,905
Provision for credit losses			10,151				(392	)			9,759
Write-offs			(1,480	)			(26	)			(1,506	)
Recoveries (1)			582				23				605
Balance, end of period		$	161,284			$	9,479			$	170,763
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	131,728			$	13,091			$	144,819
Provision for credit losses			4,723				(173	)			4,550
Write-offs			(736	)			(68	)			(804	)
Recoveries (1)			442				21				463
Balance, end of period		$	136,157			$	12,871			$	149,028

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	141,712		$	12,606		$	154,318
Provision for credit losses		20,381			(2,665	)		17,716
Write-offs		(2,483	)		(532	)		(3,015	)
Recoveries (1)		1,674			70			1,744
Balance, end of period	$	161,284		$	9,479		$	170,763
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	113,227		$	13,641		$	126,868
Provision for credit losses		23,021			(627	)		22,394
Write-offs		(1,563	)		(207	)		(1,770	)
Recoveries (1)		1,472			64			1,536
Balance, end of period	$	136,157		$	12,871		$	149,028

(1)Represents collections received on previously written off Loans.

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash Flows From Operating Activities:
Net income	$ 159,839	$ 137,995
Adjustments to reconcile cash provided by operating activities:
Provision for credit losses	17,716	22,394
Depreciation	3,690	3,076
Amortization	5,126	4,346
Loss on retirement of property and equipment	10	28
Provision for deferred income taxes	11,884	8,763
Stock-based compensation	8,601	1,556
Change in operating assets and liabilities:
Increase in accounts payable and accrued liabilities	2,273	15,951
Decrease in income taxes receivable	506	11,503
Increase in income taxes payable	8,498	448
Decrease (increase) in other assets	367	(3,703)
Net cash provided by operating activities	218,510	202,357
Cash Flows From Investing Activities:
Increase in restricted cash and cash equivalents	(63,027)	(24,676)
Purchases of restricted securities available for sale	(100)	(532)
Proceeds from sale of restricted securities available for sale	905	76
Maturities of restricted securities available for sale	0	454
Principal collected on Loans receivable	882,613	748,242
Advances to Dealers	(968,725)	(888,602)
Purchases of Consumer Loans	(85,992)	(94,212)
Accelerated payments of Dealer Holdback	(34,107)	(37,275)
Payments of Dealer Holdback	(89,734)	(58,734)
Net decrease in other loans	84	797
Purchases of property and equipment	(7,091)	(3,569)
Net cash used in investing activities	(365,174)	(358,031)
Cash Flows From Financing Activities:
Borrowings under revolving secured line of credit	1,969,700	1,757,500
Repayments under revolving secured line of credit	(1,897,800)	(1,794,800)
Proceeds from secured financing	1,426,650	600,000
Repayments of secured financing	(1,234,081)	(385,293)
Principal payments under mortgage note	(184)	(175)
Proceeds from sale of senior notes	0	106,000
Payments of debt issuance costs	(5,973)	(6,849)
Repurchase of common stock	(112,946)	(126,675)
Proceeds from stock options exercised	519	2,781
Tax benefits from stock-based compensation plans	1,847	3,027
Net cash provided by financing activities	147,732	155,516
Net increase (decrease) in cash and cash equivalents	1,068	(158)
Cash and cash equivalents, beginning of period	4,657	3,792
Cash and cash equivalents, end of period	5,725	3,634
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest	49,790	37,677
Cash paid during the period for income taxes	$ 68,902	$ 55,116

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Consolidated Balance Sheets [Abstract]
Loans receivable, from affiliates	$ 5,634	$ 4,949
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	24,551,000	25,624,000
Common stock, shares outstanding	24,551,000	25,624,000

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Net Income Per Share

9 Months Ended

Sep. 30, 2012

Net income per common share:

Net Income Per Share

10.         NET INCOME PER SHARE

Basic net income per share has been computed by dividing net income by the basic number of weighted average shares outstanding.  Diluted net income per share has been computed by dividing net income by the diluted number of weighted average shares outstanding using the treasury stock method.  The share effect is as follows:

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Weighted average shares outstanding:
Common shares		24,337		25,605		25,074		25,991
Vested restricted stock units		571		428		555		406
Basic number of weighted average shares outstanding		24,908		26,033		25,629		26,397
Dilutive effect of stock options		46		70		50		116
Dilutive effect of restricted stock and restricted stock units		8		33		27		60
Dilutive number of weighted average shares outstanding		24,962		26,136		25,706		26,573

For the three and nine months ended September 30, 2012 and 2011, there were no stock options, restricted stock or restricted stock units that would have been anti-dilutive.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 19, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Entity Registrant Name	CREDIT ACCEPTANCE CORP
Entity Central Index Key	0000885550
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		24,551,189

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Stock Repurchases

9 Months Ended

Sep. 30, 2012

Stock Repurchases [Abstract]

Stock Repurchases

11.         STOCK REPURCHASES

On August 5, 1999, our board of directors approved a stock repurchase program which authorizes us to repurchase common shares in the open market or in privately negotiated transactions at price levels we deem attractive.  On March 26, 2012, the board of directors authorized the repurchase of up to one million shares of our common stock in addition to the board’s prior authorizations.  As of September 30, 2012, we had authorization to repurchase 976,129 shares of our common stock.

During the first two quarters of 2012, we repurchased 285,402 shares of our common stock in the open market at a cost of $27.0 million.

During the second quarter of 2012, we commenced a tender offer to repurchase 1.0 million shares of our common stock at a price of $84.45 per share.  Upon expiration of the tender offer during the second quarter of 2012, we repurchased 1.0 million common shares at a cost of $84.5 million.  The settlement during the third quarter of 2012 was financed by borrowing under our revolving secured line of credit facility.

During the first quarter of 2011, we commenced a tender offer to repurchase 1.9 million shares of our common stock at a price of $65.625 per share.  Upon expiration of the tender offer during the first quarter of 2011, we repurchased 1.9 million common shares at a cost of $125.0 million.  We financed the repurchase of our common stock in the tender offer using the proceeds from the issuance of $100.0 million of Senior Notes and by borrowing under our revolving secured line of credit facility.

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Consolidated Statements Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue:
Finance charges	$ 137,495	$ 117,905	$ 397,563	$ 338,238
Premiums earned	12,206	10,462	34,987	29,195
Other income	5,977	5,372	17,313	19,783
Total revenue	155,678	133,739	449,863	387,216
Costs and expenses:
Salaries and wages	21,720	15,929	61,530	47,402
General and administrative	6,797	6,044	21,463	18,186
Sales and marketing	8,129	5,587	23,478	17,768
Provision for credit losses	9,759	4,550	17,716	22,394
Interest	16,289	14,600	47,150	42,173
Provision for claims	9,122	8,363	26,704	22,733
Total costs and expenses	71,816	55,073	198,041	170,656
Income before provision for income taxes	83,862	78,666	251,822	216,560
Provision for income taxes	30,874	28,706	91,983	78,565
Net income	$ 52,988	$ 49,960	$ 159,839	$ 137,995
Net income per share:
Basic	$ 2.13	$ 1.92	$ 6.24	$ 5.23
Diluted	$ 2.12	$ 1.91	$ 6.22	$ 5.19
Weighted average shares outstanding:
Basic	24,908	26,033	25,629	26,397
Diluted	24,962	26,136	25,706	26,573

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Debt

9 Months Ended

Sep. 30, 2012

Debt [Abstract]

Debt

5.           DEBT

We currently utilize the following primary forms of debt financing: (1) a revolving secured line of credit; (2) Warehouse facilities; (3) Term ABS financings and (4) Senior Notes.  General information for each of our financing transactions in place as of September 30, 2012 is as follows:

(Dollars in thousands)
Financings	Wholly-owned Subsidiary	Close Date	Maturity Date		Financing Amount		Interest Rate as of September 30, 2012
Revolving Secured Line of Credit	n/a	06/15/2012	06/22/2015		$	235,000	At our option, either LIBOR plus 187.5 basis points or the prime rate plus 87.5 basis points
Warehouse Facility II (1)	CAC Warehouse Funding Corp. II	06/17/2011	06/17/2014	(2)	$	325,000	Commercial paper rate plus 275 basis points or LIBOR plus 375 basis points (3) (4)
Warehouse Facility III (1)	CAC Warehouse Funding III, LLC	06/29/2012	09/10/2015	(5)	$	75,000	LIBOR plus 160 basis points (4)
Warehouse Facility IV (1)	CAC Warehouse Funding LLC IV	08/19/2011	02/19/2014	(2)	$	75,000	LIBOR plus 275 basis points (4)
Term ABS 2010-1 (1)	Credit Acceptance Funding LLC 2010-1	11/04/2010	10/15/2012	(2)	$	100,500	Fixed rate
Term ABS 2011-1 (1)	Credit Acceptance Funding LLC 2011-1	10/06/2011	09/16/2013	(2)	$	200,500	Fixed rate
Term ABS 2012-1 (1)	Credit Acceptance Funding LLC 2012-1	03/29/2012	03/17/2014	(2)	$	201,250	Fixed rate
Term ABS 2012-2 (1)	Credit Acceptance Funding LLC 2012-2	09/20/2012	09/15/2014	(2)	$	252,000	Fixed rate
Senior Notes	n/a	(6)	02/01/2017		$	350,000	Fixed rate

(1)Financing made available only to a specified subsidiary of the Company.

(2)Represents the revolving maturity date.  The outstanding balance will amortize after the maturity date based on the cash flows of the pledged assets.

(3)The LIBOR rate is used if funding is not available from the commercial paper market.

(4)Interest rate cap agreements are in place to limit the exposure to increasing interest rates.

(5)Represents the revolving maturity date.  The outstanding balance will amortize after the revolving maturity date and any amounts remaining on September 10, 2017 will be due.

(6)The close dates associated with the issuance of $250.0 million and $100.0 million of the Senior Notes were on February 1, 2010 and March 3, 2011, respectively.

Additional information related to the amounts outstanding on each facility is as follows:

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Revolving Secured Line of Credit
Maximum outstanding balance	$	139,000	$	165,400	$	187,300	$	165,400
Average outstanding balance		100,133		113,098		98,876		108,262
Warehouse Facility II
Maximum outstanding balance	$	173,800	$	264,000	$	177,200	$	264,000
Average outstanding balance		143,733		215,522		128,606		184,224
Warehouse Facility III
Maximum outstanding balance	$	62,000	$	75,000	$	73,000	$	75,000
Average outstanding balance		51,423		73,587		60,760		47,436
Warehouse Facility IV
Maximum outstanding balance	$	39,200	$	43,500	$	39,600	$	43,500
Average outstanding balance		37,809		41,895		37,847		41,895

(Dollars in thousands)	As of
	September 30, 2012			December 31, 2011
Revolving Secured Line of Credit
Balance outstanding	$	115,800		$	43,900
Amount available for borrowing (1)		119,200			161,100
Interest rate		2.09	%		2.55	%
Warehouse Facility II
Balance outstanding	$	0		$	163,200
Amount available for borrowing  (1)		325,000			161,800
Loans pledged as collateral		0			242,119
Restricted cash and cash equivalents pledged as collateral		1,626			6,117
Interest rate		2.96	%		2.99	%
Warehouse Facility III
Balance outstanding	$	0		$	70,000
Amount available for borrowing (1)		75,000			5,000
Loans pledged as collateral		0			91,601
Restricted cash and cash equivalents pledged as collateral		538			3,321
Interest rate		1.82	%		1.89	%
Warehouse Facility IV
Balance outstanding	$	37,600		$	37,500
Amount available for borrowing (1)		37,400			37,500
Loans pledged as collateral		49,003			62,260
Restricted cash and cash equivalents pledged as collateral		2,843			2,188
Interest rate		2.97	%		3.05	%
Term ABS 2009-1
Balance outstanding	$	–		$	27,581
Loans pledged as collateral		–			105,209
Restricted cash and cash equivalents pledged as collateral		–			13,526
Interest rate		–			5.68	%
Term ABS 2010-1
Balance outstanding	$	100,500		$	100,500
Loans pledged as collateral		123,609			125,541
Restricted cash and cash equivalents pledged as collateral		14,288			14,116
Interest rate		2.36	%		2.36	%
Term ABS 2011-1
Balance outstanding	$	200,500		$	200,500
Loans pledged as collateral		244,531			248,167
Restricted cash and cash equivalents pledged as collateral		25,300			23,268
Interest rate		2.90	%		2.90	%
Term ABS 2012-1
Balance outstanding	$	201,250		$	–
Loans pledged as collateral		246,756			–
Restricted cash and cash equivalents pledged as collateral		23,561			–
Interest rate		2.38	%		–
Term ABS 2012-2
Balance outstanding	$	252,000		$	–
Loans pledged as collateral		312,152			–
Restricted cash and cash equivalents pledged as collateral		51,103			–
Interest rate		1.63	%		–
Senior Notes
Balance outstanding (2)	$	350,307		$	350,378
Interest rate		9.13	%		9.13	%

(1) Availability may be limited by the amount of assets pledged as collateral.

(2) As of September 30, 2012 and December 31, 2011, the outstanding balance presented for the Senior Notes includes a net unamortized debt premium of $0.3million and $0.4 million, respectively.

Revolving Secured Line of Credit Facility

We have a $235.0 million revolving secured line of credit facility with a commercial bank syndicate.

During the second quarter of 2012, we extended the maturity of our revolving secured line of credit facility from June 22, 2014 to June 22, 2015.  Additionally, the amount of the facility was increased from $205.0 million to $235.0 million.  The interest rate on borrowings under the facility was decreased from the prime rate plus 1.25% or the LIBOR rate plus 2.25%, at our option, to the prime rate plus 0.875% or the LIBOR rate plus 1.875%, at our option.

Borrowings under the revolving secured line of credit facility, including any letters of credit issued under the facility, are subject to a borrowing-base limitation.  This limitation equals 80% of the net book value of Loans, less a hedging reserve (not exceeding $1.0 million), and the amount of other debt secured by the collateral which secures the revolving secured line of credit facility.  Borrowings under the revolving secured line of credit facility agreement are secured by a lien on most of our assets.

Warehouse Facilities

We have three Warehouse facilities with total borrowing capacity of $475.0 million.  Each of the facilities are with different institutional investors, and the facility limit is $325.0 million for Warehouse Facility II and $75.0 million for both Warehouse Facility III and IV.

During the second quarter of 2012, we extended the date on which Warehouse III will cease to revolve from September 10, 2013 to September 10, 2015.  The maturity of the facility was also extended from September 10, 2014 to September 10, 2017.  There were no other material changes to the terms of the facility.

Under each Warehouse facility, we can contribute Loans to our wholly-owned subsidiaries in return for cash and equity in each subsidiary.  In turn, each subsidiary pledges the Loans as collateral to institutional investors to secure financing that will fund the cash portion of the purchase price of the Loans.  The financing provided to each subsidiary under the applicable facility is limited to the lesser of 80% of the net book value of the contributed Loans plus the cash collected on such Loans or the facility limit.

The financings create indebtedness for which the subsidiaries are liable and which is secured by all the assets of each subsidiary.  Such indebtedness is non-recourse to us, even though we are consolidated for financial reporting purposes with the subsidiaries.  Because the subsidiaries are organized as legal entities separate from us, their assets (including the contributed Loans) are not available to our creditors.

The subsidiaries pay us a monthly servicing fee equal to 6% of the collections received with respect to the contributed Loans.  The fee is paid out of the collections.  Except for the servicing fee and holdback payments due to Dealers, if a facility is amortizing, we do not have any rights in any portion of such collections until all outstanding principal, accrued and unpaid interest, fees and other related costs have been paid in full.  If a facility is not amortizing, the applicable subsidiary may be entitled to retain a portion of such collections provided that the borrowing base requirements of the facility are satisfied.

Term ABS Financings

In 2009, 2010, 2011 and 2012, five of our wholly-owned subsidiaries (the “Funding LLCs”), completed secured financing transactions with qualified institutional investors.  In connection with these transactions, we contributed Loans on an arms-length basis to each Funding LLC for cash and the sole membership interest in that Funding LLC.  In turn, each Funding LLC contributed the Loans to a respective trust that issued notes to qualified institutional investors.  The Term ABS 2009-1 ceased to revolve on May 15, 2011 and was paid in full during the first quarter of 2012.  The Term ABS 2010-1, 2011-1, 2012-1 and 2012-2 transactions each consist of three classes of notes.  The Class A and Class B Notes for each Term ABS financing bear interest.  The Class C Notes for each Term ABS financing do not bear interest and have been retained by us.

Each financing at the time of issuance has a specified revolving period during which we may be required, and are likely, to contribute additional Loans to each Funding LLC.  Each Funding LLC will then contribute the Loans to their respective trust.  At the end of the revolving period, the debt outstanding under each financing will begin to amortize.

The financings create indebtedness for which the trusts are liable and which is secured by all the assets of each trust.  Such indebtedness is non-recourse to us, even though we are consolidated for financial reporting purposes with the trusts and the Funding LLCs.  Because the Funding LLCs are organized as legal entities separate from us, their assets (including the contributed Loans) are not available to our creditors.  We receive a monthly servicing fee on each financing equal to 6% of the collections received with respect to the contributed Loans.  The fee is paid out of the collections.  Except for the servicing fee and Dealer Holdback payments due to Dealers, if a facility is amortizing, we do not have any rights in any portion of such collections until all outstanding principal, accrued and unpaid interest, fees and other related costs have been paid in full.  If a facility is not amortizing, the applicable subsidiary may be entitled to retain a portion of such collections provided that the borrowing base requirements of the facility are satisfied.  However, in our capacity as servicer of the  Loans, we do have a limited right to exercise a “clean-up call” option to purchase Loans from the Funding LLCs and/or the trusts under certain specified circumstances.  Alternatively, when a trust’s underlying indebtedness is paid in full, either through collections or through a prepayment of the indebtedness, the trust is to pay any remaining collections over to its Funding LLC as the sole beneficiary of the trust.  The collections will then be available to be distributed to us as the sole member of the respective Funding LLC.

The table below sets forth certain additional details regarding the outstanding Term ABS Financings:

(Dollars in thousands)
Term ABS Financings	Close Date	Net Book Value of Loans Contributed at Closing		Revolving Period
Term ABS 2010-1	November 4, 2010	$	126,751	24 months (Through October 15, 2012)
Term ABS 2011-1	October 6, 2011	$	250,827	24 months (Through September 16, 2013)
Term ABS 2012-1	March 29, 2012	$	251,681	24 months (Through March 17, 2014)
Term ABS 2012-2	September 20, 2012	$	315,120	24 months (Through September 15, 2014)

Senior Notes

We have outstanding $350.0 million aggregate principal amount of our 9.125% First Priority Senior Secured Notes due 2017, $100.0 million of which we issued on March 3, 2011 and $250.0 million of which we issued on February 1, 2010.  The Senior Notes are governed by an indenture, dated as of February 1, 2010, as amended and supplemented (the “Indenture”), among us, as the issuer; our subsidiaries Buyers Vehicle Protection Plan, Inc. and Vehicle Remarketing Services, Inc., as guarantors (the “Guarantors”); and U.S. Bank National Association, as trustee.  The Senior Notes issued on March 3, 2011 have the same terms as the previously issued Senior Notes, other than issue price and issue date, and all of the Senior Notes are treated as a single class under the Indenture.

The Senior Notes mature on February 1, 2017 and bear interest at a rate of 9.125% per annum, computed on the basis of a 360-day year comprised of twelve 30-day months and payable semi-annually on February 1 and August 1 of each year.  The Senior Notes issued on March 3, 2011 were issued at a price of 106.0% of their aggregate principal amount, resulting in gross proceeds of $106.0 million, and a yield to maturity of 7.83% per annum.  The Senior Notes issued on February 1, 2010 were issued at a price of 97.495% of their aggregate principal amount, resulting in gross proceeds of $243.7 million, and a yield to maturity of 9.625% per annum.  The premium with respect to the Senior Notes issued on March 3, 2011 and the discount with respect to the Senior Notes issued on February 1, 2010 are being amortized over the life of the Senior Notes using the effective interest method.

The Senior Notes are guaranteed on a senior secured basis by the Guarantors, which are also guarantors of obligations under our revolving secured line of credit facility.  Other existing and future subsidiaries of ours may become guarantors of the Senior Notes.  The Senior Notes and the Guarantors’ Senior Note guarantees are secured on a first-priority basis (subject to specified exceptions and permitted liens), together with all indebtedness outstanding from time to time under the revolving secured line of credit facility and, under certain circumstances, certain future indebtedness, by a security interest in substantially all of our assets and those of the Guarantors, subject to certain exceptions such as real property, cash (except to the extent it is deposited with the collateral agent), certain leases, and equity interests of our subsidiaries (other than those of specified subsidiaries including the Guarantors).  Our assets and those of the Guarantors securing the Senior Notes and the Senior Note guarantees will not include our assets transferred to special purpose subsidiaries in connection with Warehouse facilities and Term ABS financings and will generally be the same as the collateral securing indebtedness under the revolving secured line of credit facility and, under certain circumstances, certain future indebtedness, subject to certain limited exceptions as provided in the security and intercreditor agreements related to the revolving secured line of credit facility.

Debt Covenants

As of September 30, 2012, we were in compliance with all our debt covenants relating to the revolving secured line of credit facility, including those that require the maintenance of certain financial ratios and other financial conditions.  These covenants require a minimum ratio of our earnings before interest, taxes and non-cash expenses to fixed charges.  These covenants also limit the maximum ratio of our funded debt to tangible net worth.  Additionally, we must maintain consolidated net income of not less than $1 for the two most recently ended fiscal quarters.  Some of these debt covenants may indirectly limit the repurchase of common stock or payment of dividends on common stock.

Our Warehouse facilities and Term ABS financings also contain covenants that measure the performance of the contributed assets.  As of September 30, 2012, we were in compliance with all such covenants.  As of the end of the quarter, we were also in compliance with our covenants under the Indenture.  The Indenture includes covenants that limit the maximum ratio of our funded debt to tangible net worth and also require a minimum collateral coverage ratio.

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Loans Receivable

9 Months Ended

Sep. 30, 2012

Loans Receivable [Abstract]

Loans Receivable

4.           LOANS RECEIVABLE

Loans receivable consists of the following:

(In thousands)	As of September 30, 2012
	Dealer Loans			Purchased Loans			Total
Loans receivable	$	1,807,701		$	239,780		$	2,047,481
Allowance for credit losses		(161,284	)		(9,479	)		(170,763	)
Loans receivable, net	$	1,646,417		$	230,301		$	1,876,718
(In thousands)	As of December 31, 2011
	Dealer Loans			Purchased Loans			Total
Loans receivable	$	1,506,539		$	246,352		$	1,752,891
Allowance for credit losses		(141,712	)		(12,606	)		(154,318	)
Loans receivable, net	$	1,364,827		$	233,746		$	1,598,573

A summary of changes in Loans receivable is as follows:

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	1,736,578			$	241,216			$	1,977,794
New Consumer Loan assignments (1)			293,379				25,238				318,617
Principal collected on Loans receivable			(252,398	)			(32,617	)			(285,015	)
Accelerated Dealer Holdback payments			9,884				0				9,884
Dealer Holdback payments			27,118				0				27,118
Transfers (2)			(5,946	)			5,946				0
Write-offs			(1,480	)			(26	)			(1,506	)
Recoveries (3)			582				23				605
Net change in other loans			(16	)			0				(16	)
Balance, end of period		$	1,807,701			$	239,780			$	2,047,481
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	1,331,973			$	250,932			$	1,582,905
New Consumer Loan assignments (1)			278,395				30,717				309,112
Principal collected on Loans receivable			(216,860	)			(36,970	)			(253,830	)
Accelerated Dealer Holdback payments			12,859				0				12,859
Dealer Holdback payments			23,985				0				23,985
Transfers (2)			(2,933	)			2,933				0
Write-offs			(736	)			(68	)			(804	)
Recoveries (3)			442				21				463
Net change in other loans			(259	)			0				(259	)
Balance, end of period		$	1,426,866			$	247,565			$	1,674,431

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,506,539		$	246,352		$	1,752,891
New Consumer Loan assignments (1)		968,725			85,992			1,054,717
Principal collected on Loans receivable		(774,361	)		(108,252	)		(882,613	)
Accelerated Dealer Holdback payments		34,107			0			34,107
Dealer Holdback payments		89,734			0			89,734
Transfers (2)		(16,150	)		16,150			0
Write-offs		(2,483	)		(532	)		(3,015	)
Recoveries (3)		1,674			70			1,744
Net change in other loans		(84	)		0			(84	)
Balance, end of period	$	1,807,701		$	239,780		$	2,047,481
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	1,082,039		$	262,842		$	1,344,881
New Consumer Loan assignments (1)		888,602			94,212			982,814
Principal collected on Loans receivable		(628,406	)		(119,836	)		(748,242	)
Accelerated Dealer Holdback payments		37,275			0			37,275
Dealer Holdback payments		58,734			0			58,734
Transfers (2)		(10,490	)		10,490			0
Write-offs		(1,563	)		(207	)		(1,770	)
Recoveries (3)		1,472			64			1,536
Net change in other loans		(797	)		0			(797	)
Balance, end of period	$	1,426,866		$	247,565		$	1,674,431

(1)The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program.  The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

(2)Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s outstanding Dealer Loan balance to Purchased Loans in the period this forfeiture occurs.

(3)Represents collections received on previously written off Loans.

Contractual net cash flows are comprised of the contractual repayments of the underlying Consumer Loans for Dealer and Purchased Loans, less the related Dealer Holdback payments for Dealer Loans.  The difference between the contractual net cash flows and the expected net cash flows is referred to as the nonaccretable difference.  This difference is neither accreted into income nor recorded in our balance sheets.  We do not believe that the contractual net cash flows of our Loan portfolio are relevant in assessing our financial position.  We are contractually owed repayments on many Consumer Loans, primarily those older than 120 months, where we are not forecasting any future net cash flows.

The excess of expected net cash flows over the carrying value of the Loans is referred to as the accretable yield and is recognized on a level-yield basis as finance charge income over the remaining lives of the Loans.  A summary of changes in the accretable yield is as follows:

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	581,693			$	119,493			$	701,186
New Consumer Loan assignments (1)			127,728				10,790				138,518
Finance charge income			(117,780	)			(19,715	)			(137,495	)
Forecast changes			6,880				1,265				8,145
Transfers (2)			(2,580	)			4,240				1,660
Balance, end of period		$	595,941			$	116,073			$	712,014
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	462,478			$	123,561			$	586,039
New Consumer Loan assignments (1)			122,010				14,125				136,135
Finance charge income			(96,577	)			(21,328	)			(117,905	)
Forecast changes			5,211				2,791				8,002
Transfers (2)			(1,349	)			2,182				833
Balance, end of period		$	491,773			$	121,331			$	613,104

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	508,046			$	120,082			$	628,128
New Consumer Loan assignments (1)			416,159				38,227				454,386
Finance charge income			(337,231	)			(60,332	)			(397,563	)
Forecast changes			16,322				6,406				22,728
Transfers (2)			(7,355	)			11,690				4,335
Balance, end of period		$	595,941			$	116,073			$	712,014
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	351,569			$	124,520			$	476,089
New Consumer Loan assignments (1)			395,111				46,627				441,738
Finance charge income			(273,300	)			(64,938	)			(338,238	)
Forecast changes			23,440				6,659				30,099
Transfers (2)			(5,047	)			8,463				3,416
Balance, end of period		$	491,773			$	121,331			$	613,104

(1)The Dealer Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related advances paid to Dealers.  The Purchased Loans amount represents the net cash flows expected at the time of assignment on Consumer Loans assigned under our Purchase Program, less the related one-time payments made to Dealers.

(2)Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s outstanding Dealer Loan balance and related expected future net cash flows to Purchased Loans in the period this forfeiture occurs.

Additional information related to new Consumer Loan assignments is as follows:

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Contractual net cash flows at the time of assignment (1)		$	454,859		$	50,278		$	505,137
Expected net cash flows at the time of assignment (2)			421,107			36,028			457,135
Fair value at the time of assignment (3)			293,379			25,238			318,617
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Contractual net cash flows at the time of assignment (1)		$	431,399		$	61,382		$	492,781
Expected net cash flows at the time of assignment (2)			400,405			44,842			445,247
Fair value at the time of assignment (3)			278,395			30,717			309,112

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Contractual net cash flows at the time of assignment (1)		$	1,495,980		$	173,176		$	1,669,156
Expected net cash flows at the time of assignment (2)			1,384,884			124,219			1,509,103
Fair value at the time of assignment (3)			968,725			85,992			1,054,717
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Contractual net cash flows at the time of assignment (1)		$	1,378,850		$	191,814		$	1,570,664
Expected net cash flows at the time of assignment (2)			1,283,713			140,839			1,424,552
Fair value at the time of assignment (3)			888,602			94,212			982,814

(1)The Dealer Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we would be required to make if we collected all of the contractual repayments.  The Purchased Loans amount represents the repayments that we were contractually owed at the time of assignment on Consumer Loans assigned under our Purchase Program.

(2)The Dealer Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Portfolio Program, less the related Dealer Holdback payments that we expected to make.  The Purchased Loans amount represents the repayments that we expected to collect at the time of assignment on Consumer Loans assigned under our Purchase Program.

(3)The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program.  The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

Credit Quality

We monitor and evaluate the credit quality of Consumer Loans assigned under our Portfolio and Purchase Programs on a monthly basis by comparing our current forecasted collection rates to our initial expectations.  For additional information regarding credit quality, see Note 3 to the consolidated financial statements.  The following table compares our forecast of Consumer Loan collection rates as of September 30, 2012, with the forecasts as of June 30, 2012, as of December 31, 2011, and at the time of assignment, segmented by year of assignment:

	Forecasted Collection Percentage as of (1)												Variance in Forecasted Collection Percentage from
Consumer Loan Assignment Year	September 30, 2012			June 30, 2012			December 31, 2011			Initial Forecast			June 30, 2012			December 31, 2011			Initial Forecast
2003		73.8	%		73.8	%		73.7	%		72.0	%		0.0	%		0.1	%		1.8	%
2004		73.0	%		73.0	%		73.0	%		73.0	%		0.0	%		0.0	%		0.0	%
2005		73.5	%		73.6	%		73.6	%		74.0	%		-0.1	%		-0.1	%		-0.5	%
2006		70.0	%		70.0	%		70.0	%		71.4	%		0.0	%		0.0	%		-1.4	%
2007		68.1	%		68.1	%		68.1	%		70.7	%		0.0	%		0.0	%		-2.6	%
2008		70.3	%		70.3	%		70.0	%		69.7	%		0.0	%		0.3	%		0.6	%
2009		79.5	%		79.6	%		79.4	%		71.9	%		-0.1	%		0.1	%		7.6	%
2010		77.2	%		77.1	%		76.8	%		73.6	%		0.1	%		0.4	%		3.6	%
2011		73.7	%		73.6	%		73.2	%		72.5	%		0.1	%		0.5	%		1.2	%
2012 (2)		71.6	%		71.9	%		-			71.1	%		-0.3	%		-			0.5	%

(1) Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment.  Contractual repayments include both principal and interest.

(2) The forecasted collection rate for 2012 Consumer Loans as of September 30, 2012 includes both Consumer Loans that were in our portfolio as of June 30, 2012 and Consumer Loans assigned during the most recent quarter.  The following table provides forecasted collection rates for each of these segments:

	Forecasted Collection Percentage as of
2012 Consumer Loan Assignment Period	September 30, 2012			June 30, 2012			Variance
January 1, 2012 through June 30, 2012		72.0	%		71.9	%		0.1	%
July 1, 2012 through September 30, 2012		70.6	%		-			-

Advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program are aggregated into pools for purposes of recognizing revenue and evaluating impairment.  As a result of this aggregation, we are not able to segment the carrying value of the majority of our Loan portfolio by year of assignment.  The following table summarizes Loan pools based on the performance of the underlying pool of Consumer Loans:

(In thousands)	As of September 30, 2012
	Loan Pool Performance Meets or Exceeds Initial Estimates						Loan Pool Performance Less than Initial Estimates
	Dealer Loans		Purchased Loans		Total		Dealer Loans			Purchased Loans			Total
Loans receivable	$	572,223	$	196,367	$	768,590	$	1,235,479		$	43,413		$	1,278,892
Allowance for credit losses		0		0		0		(161,284	)		(9,479	)		(170,763	)
Loans receivable, net	$	572,223	$	196,367	$	768,590	$	1,074,195		$	33,934		$	1,108,129
(In thousands)	As of December 31, 2011
	Loan Pool Performance Meets or Exceeds Initial Estimates						Loan Pool Performance Less than Initial Estimates
	Dealer Loans		Purchased Loans		Total		Dealer Loans			Purchased Loans			Total
Loans receivable	$	511,926	$	192,502	$	704,428	$	994,613		$	53,850		$	1,048,463
Allowance for credit losses		0		0		0		(141,712	)		(12,606	)		(154,318	)
Loans receivable, net	$	511,926	$	192,502	$	704,428	$	852,901		$	41,244		$	894,145

A summary of changes in the allowance for credit losses is as follows:

(In thousands)	For the Three Months Ended September 30, 2012
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	152,031			$	9,874			$	161,905
Provision for credit losses			10,151				(392	)			9,759
Write-offs			(1,480	)			(26	)			(1,506	)
Recoveries (1)			582				23				605
Balance, end of period		$	161,284			$	9,479			$	170,763
(In thousands)	For the Three Months Ended September 30, 2011
	Dealer Loans				Purchased Loans				Total
Balance, beginning of period		$	131,728			$	13,091			$	144,819
Provision for credit losses			4,723				(173	)			4,550
Write-offs			(736	)			(68	)			(804	)
Recoveries (1)			442				21				463
Balance, end of period		$	136,157			$	12,871			$	149,028

(In thousands)	For the Nine Months Ended September 30, 2012
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	141,712		$	12,606		$	154,318
Provision for credit losses		20,381			(2,665	)		17,716
Write-offs		(2,483	)		(532	)		(3,015	)
Recoveries (1)		1,674			70			1,744
Balance, end of period	$	161,284		$	9,479		$	170,763
(In thousands)	For the Nine Months Ended September 30, 2011
	Dealer Loans			Purchased Loans			Total
Balance, beginning of period	$	113,227		$	13,641		$	126,868
Provision for credit losses		23,021			(627	)		22,394
Write-offs		(1,563	)		(207	)		(1,770	)
Recoveries (1)		1,472			64			1,536
Balance, end of period	$	136,157		$	12,871		$	149,028

(1)Represents collections received on previously written off Loans.

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Summary Of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Summary Of Significant Accounting Policies [Abstract]

Summary Of Reinsurance Activity

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Net assumed written premiums	$	11,479	$	11,293	$	39,813	$	37,419
Net premiums earned		12,206		10,462		34,987		29,195
Provision for claims		9,122		8,363		26,704		22,733
Amortization of capitalized acquisition costs		342		288		952		747

Schedule Of Trust Assets And Reinsurance Liabilities

(In thousands)		As of
	Balance Sheet location	September 30, 2012			December 31, 2011
Trust assets	Restricted cash and cash equivalents		$	48,412		$	42,026
Unearned premium	Accounts payable and accrued liabilities			37,161			32,335
Claims reserve (1)	Accounts payable and accrued liabilities			1,515			1,297

(1)The claims reserve is estimated based on historical claims experience.

Summarizes Of Restricted Cash And Cash Equivalents

(In thousands)	As of
	September 30, 2012		December 31, 2011
Cash related to secured financings	$	119,259	$	62,536
Cash held in trusts for future vehicle service contract claims (1)		48,447		42,143
Total restricted cash and cash equivalents	$	167,706	$	104,679

(1)The unearned premium and claims reserve associated with the trusts are included in accounts payable and accrued liabilities in the consolidated balance sheets.  As of September 30, 2012, the outstanding cash balance includes $48,412 related to VSC Re and $35 related to a discontinued profit sharing arrangement.  As of December 31, 2011, the outstanding cash balance includes $42,026 related to VSC Re and $117 related to a discontinued profit sharing arrangement.

Schedule Of Restricted Securities Available For Sale

(In thousands)	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	0	$	0	$	0		$	0
(In thousands)	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	804	$	13	$	(7	)	$	810

Schedule Of Cost And Estimated Fair Values Of Debt Securities By Contractual Maturity

(In thousands)	As of
	September 30, 2012				December 31, 2011
	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Contractual Maturity
Within one year	$	0	$	0	$	45	$	44
Over one year to five years		0		0		759		766
Total restricted securities available for sale	$	0	$	0	$	804	$	810

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Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Plans

12.         STOCK-BASED COMPENSATION PLANS

On March 26, 2012, our board of directors approved an amendment to our Amended and Restated Incentive Compensation Plan (the “Incentive Plan”) increasing the number of shares authorized for issuance by 500,000 shares, to 2 million shares.  Pursuant to the Incentive Plan, we can grant restricted stock, restricted stock units, stock options, and performance awards to team members, officers, directors, and contractors at any time prior to March 26, 2022.  The shares available for future grants under the Incentive Plan totaled 342,300as of September 30, 2012.

On March 26, 2012, the compensation committee of our board of directors approved an award of 310,000 restricted stock units and 190,000 shares of restricted stock to our Chief Executive Officer.  The 310,000 restricted stock units and 90,000 shares of restricted stock are eligible to vest over a ten year period beginning in 2012 based on the cumulative improvement in our annual adjusted economic profit, a non-GAAP financial measure.  The remaining 100,000 shares of restricted stock are eligible to vest in equal annual installments over a five year period beginning in 2022 based on the attainment of annual adjusted economic profit targets.

A summary of the restricted stock activity under the Incentive Plan for the nine months ended September 30, 2012 and 2011 is presented below:

(In thousands)	Number of Shares
	For the Nine Months Ended September 30,
Restricted Stock	2012		2011
Outstanding Beginning Balance	48		112
Granted	199		9
Vested	(37	)	(63	)
Forfeited	(3	)	(7	)
Outstanding Ending Balance	207		51

The grant-date fair value per share is estimated to equal the market price of our common stock on the date of grant.  In addition to the 190,000 shares of restricted stock granted to our Chief Executive Officer in 2012, we grant time-based shares of restricted stock annually to team members based on attaining certain individual and Company performance criteria as a part of our annual incentive compensation program.  Based on the terms of individual restricted stock grant agreements, these time-based shares generally vest over a period of three to five years, based on continuous employment.

A summary of the restricted stock unit activity under the Incentive Plan for the nine months ended September 30, 2012 and 2011 is presented below:

(In thousands, except per share data)	Nonvested					Vested				Total
Restricted Stock Units	Number of Restricted Stock Units			Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units		Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units
Outstanding as of December 31, 2011		348		$	24.06		428	$	22.14		776
Granted		313			106.32		-		-		313		(1	)
Vested		(143	)		21.48		143		21.48		-		(2	)
Forfeited		(8	)		15.80		-		-		(8	)
Outstanding as of September 30, 2012		510		$	75.43		571	$	21.97		1,081
(In thousands, except per share data)	Nonvested					Vested				Total
Restricted Stock Units	Number of Restricted Stock Units			Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units		Weighted Average Grant-Date Fair Value Per Share		Number of Restricted Stock Units
Outstanding as of December 31, 2010		521		$	19.99		270	$	22.94		791
Granted		25			58.54		-		-		25		(3	)
Vested		(158	)		20.99		158		20.99		-		(4	)
Forfeited		(34	)		20.50		-		-		(34	)
Outstanding as of September 30, 2011		354		$	22.07		428	$	22.14		782

(1) The distribution date of vested restricted stock units is February 18, 2019 for 3 restricted stock units.  For 310 restricted stock units, the vested restricted stock units will be distributed in equal installments on December 31, 2022, 2023, 2024, 2025 and 2026.

(2) The distribution date of vested restricted stock units is February 22, 2014 for 60 restricted stock units, February 22, 2016 for 77 restricted stock units and February 22, 2017 for 6 restricted stock units.

(3) The distribution date of vested restricted stock units is February 22, 2018 for 5 restricted stock units and February 18, 2019 for 20 restricted stock units.

(4) The distribution date of vested restricted stock units is February 22, 2014 for 60 restricted stock units, February 22, 2016 for 90 restricted stock units and February 22, 2017 for 8 restricted stock units.

     Each restricted stock unit represents and has a value equal to one share of common stock.  The grant-date fair value per share is estimated to equal the market price of our common stock on the date of grant.  In addition to the 310,000 restricted stock units granted to our Chief Executive Officer in 2012, we grant performance-based restricted stock units to team members as part of our long-term incentive compensation program.  These restricted stock units will be earned over a five-year period based upon the compounded annual growth rate in our adjusted economic profit, a non-GAAP financial measure.

Stock compensation expense consists of the following:

(In thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2012			2011			2012			2011
Restricted stock		$	1,101		$	113		$	2,370		$	493
Restricted stock units			2,944			251			6,231			1,063
Total		$	4,045		$	364		$	8,601		$	1,556

While the restricted stock units and shares of restricted stock are generally expected to vest in equal, annual installments over the corresponding requisite service periods of the grants, the related stock-based compensation expense is not recognized on a straight-line basis over the same periods.  Each installment is accounted for as a separate award and as a result, the fair value of each installment is recognized as stock-based compensation expense on a straight-line basis over the related vesting period.  The following table details how the expenses associated with restricted stock and restricted stock units, which are expected to be recognized over a weighted average period of 3.5years, will be recorded assuming performance targets are achieved in the periods currently estimated:

(In thousands)
Year	Restricted Stock Units		Restricted Stock		Total Projected Expense
Remainder of 2012	$	2,294	$	913	$	3,207
2013		7,624		3,086		10,710
2014		5,263		2,350		7,613
2015		4,298		2,029		6,327
2016		3,639		1,862		5,501
Thereafter		7,060		8,722		15,782
Total	$	30,178	$	18,962	$	49,140

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Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

8.           RELATED PARTY TRANSACTIONS

In the normal course of our business, affiliated Dealers assign Consumer Loans to us under the Portfolio and Purchase Programs.  Dealer Loans and Purchased Loans with affiliated Dealers are on the same terms as those with non-affiliated Dealers.  Affiliated Dealers are comprised of Dealers owned or controlled by: (1) our Chairman and significant shareholder; and (2) a member of the Chairman’s immediate family.

Affiliated Dealer Loan balances were $5.6million and $4.9 million as of September 30, 2012 and December 31, 2011, respectively.  As of September 30, 2012 and December 31, 2011, affiliated Dealer Loan balances were0.3% of total consolidated Dealer Loan balances.  A summary of related party Loan activity is as follows:

(In thousands)	For the Three Months Ended September 30,
	2012				2011
	Affiliated Dealer activity		% of consolidated		Affiliated Dealer activity		% of consolidated
Dealer Loan revenue	$	284	0.2	%	$	349	0.4	%
New Consumer Loan assignments (1)		928	0.3	%		128	0.0	%
Accelerated Dealer Holdback payments		79	0.8	%		0	0.0	%
Dealer Holdback payments		692	2.6	%		652	2.7	%

(In thousands)	For the Nine Months Ended September 30,
	2012				2011
	Affiliated Dealer activity		% of consolidated		Affiliated Dealer activity		% of consolidated
Dealer Loan revenue	$	849	0.2	%	$	1,330	0.5	%
New Consumer Loan assignments (1)		2,662	0.3	%		788	0.1	%
Accelerated Dealer Holdback payments		149	0.4	%		24	0.1	%
Dealer Holdback payments		2,643	2.9	%		1,757	3.0	%

(1)Represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

Our Chairman and significant shareholder has indirect control over entities that, in the past, offered secured lines of credit to automobile dealers, and has the right or obligation to reacquire these entities under certain circumstances until December 31, 2014 or the repayment of the related purchase money note.

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Net Income Per Share (Computation Of Weighted Average Shares Outstanding Basic And Diluted) (Details) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net income per common share:
Common shares	24,337	25,605	25,074	25,991
Vested restricted stock units	571	428	555	406
Basic number of weighted average shares outstanding	24,908	26,033	25,629	26,397
Dilutive effect of stock options	46	70	50	116
Dilutive effect of restricted stock and restricted stock units	8	33	27	60
Dilutive number of weighted average shares outstanding	24,962	26,136	25,706	26,573

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Derivative And Hedging Instruments

9 Months Ended

Sep. 30, 2012

Derivative And Hedging Instruments [Abstract]

Derivative And Hedging Instruments

6.           DERIVATIVE AND HEDGING INSTRUMENTS

Interest Rate Caps.  We utilize interest rate cap agreements to manage the interest rate risk on our Warehouse facilities.  The following tables provide the terms of our interestrate cap agreements that were in effect as of September 30, 2012 and December 31, 2011:

As of September 30, 2012

Facility (in millions)		Facility Name	Purpose	Start	End	Notional (in millions)			Cap Interest Rate (1)
$	325.0	Warehouse Facility II	Cap Floating Rate	07/2011	06/2013	$	325.0		6.75	%
	75.0	Warehouse Facility III	Cap Floating Rate	09/2010	09/2013		37.5		6.75	%
	75.0	Warehouse Facility III	Cap Floating Rate	06/2012	07/2015		18.8	(2)	5.00	%
	75.0	Warehouse Facility IV	Cap Floating Rate	08/2011	03/2014		75.0		5.50	%

As of December 31, 2011

Facility (in millions)		Facility Name	Purpose	Start	End	Notional (in millions)		Cap Interest Rate (1)
$	325.0	Warehouse Facility II	Cap Floating Rate	09/2010	06/2013	$	325.0	6.75	%
	75.0	Warehouse Facility III	Cap Floating Rate	09/2010	09/2013		37.5	6.75	%
	75.0	Warehouse Facility IV	Cap Floating Rate	08/2011	03/2014		75.0	5.50	%

(1) Rate excludes the spread over the LIBOR rate or the commercial paper rate, as applicable.

(2) The notional amount increases to $56.3 million in September 2013 when the original Warehouse Facility III interest rate cap for $37.5 million ends.

The interest rate caps have not been designated as hedging instruments.

Information related to the fair values of derivative instruments in our consolidated balance sheets as of September 30, 2012 and December 31, 2011 is as follows:

(In thousands)		Fair Value as of
	Balance Sheet location	September 30, 2012		December 31, 2011
Derivatives not designated as hedging instruments
Asset Derivatives
Interest rate caps	Other assets	$	18	$	16

Information related to the effect of derivative instruments designated as hedging instruments in our consolidated financial statements for the three and nine months ended September 30, 2012 and 2011 is as follows:

(In thousands)
Derivatives in Cash Flow Hedging Relationships	(Loss) / Gain Recognized in OCI on Derivative (Effective Portion)					(Loss) / Gain Reclassified from Accumulated OCI into Income (Effective Portion)
	For the Three Months Ended September 30,						For the Three Months Ended September 30,
	2012		2011			Location	2012		2011
Interest rate swap	$	0	$	0		Interest expense	$	0	$	(49	)
(In thousands)
Derivatives in Cash Flow Hedging Relationships	(Loss) / Gain Recognized in OCI on Derivative (Effective Portion)					(Loss) / Gain Reclassified from Accumulated OCI into Income (Effective Portion)
	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
		2012		2011		Location		2012		2011
Interest rate swap	$	0	$	(16	)	Interest expense	$	0	$	(192	)

Information related to the effect of derivative instruments not designated as hedging instruments on our consolidated statements of income for the three and nine months ended September 30, 2012 and 2011 is as follows:

(In thousands)
		Amount of (Loss) / Gain Recognized in Income on Derivatives							Amount of (Loss) / Gain Recognized in Income on Derivatives
		For the Three Months Ended September 30,							For the Nine Months Ended September 30,
Derivatives Not Designated as Hedging Instruments	Location	2012			2011				2012				2011
Interest rate caps	Interest expense	$	(7	)		$	(61	)		$	(66	)		$	(202	)

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Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2012

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

7.           FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate their value.

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents.  The carrying amount of cash and cash equivalents and restricted cash and cash equivalents approximate their fair value due to the short maturity of these instruments.

Restricted Securities Available for Sale.  Restricted securities consist of amounts held in trusts by TPAs to pay claims on vehicle service contracts.  Securities for which we do not have the intent or ability to hold to maturity are classified as available for sale and stated at fair value.  The fair value of restricted securities are based on quoted market values.

Net Investment in Loans Receivable.  Loans receivable, net represents our net investment in Loans.  The fair value is determined by calculating the present value of future Loan payment inflows and Dealer Holdback outflows estimated by us utilizing a discount rate comparable with the rate used to calculate our allowance for credit losses.

Derivative Instruments.  The fair value of interest rate caps and interest rate swaps are based on quoted prices for similar instruments in active markets, which are influenced by a number of factors, including interest rates, notional amount of the derivative, and number of months until maturity.

Liabilities.  The fair value of our Senior Notes is determined using quoted market prices in an active market.  The fair value of our Term ABS financings is also determined using quoted market prices, however, these instruments trade in a market with much lower trading volume.  For our Revolving Secured Line of Credit, our Warehouse Facilities and our mortgage note, the fair values are calculated using the estimated value of each debt instrument based on current rates for debt with similar risk profiles and maturities.

A comparison of the carrying value and estimated fair value of these financial instruments is as follows:

(In thousands)
	As of September 30, 2012				As of December 31, 2011
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Cash and cash equivalents	$	5,725	$	5,725	$	4,657	$	4,657
Restricted cash and cash equivalents		167,706		167,706		104,679		104,679
Restricted securities available for sale		0		0		810		810
Net investment in Loans receivable		1,876,718		1,895,056		1,598,573		1,615,009
Derivative instruments		18		18		16		16
Liabilities
Revolving secured line of credit	$	115,800	$	115,800	$	43,900	$	43,900
Secured financing		791,850		801,226		599,281		598,622
Mortgage note		4,104		4,104		4,288		4,288
Senior notes		350,307		385,875		350,378		365,500

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.  We group assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.  These levels are:

Level 1Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market.  These unobservable assumptions reflect estimates or assumptions that market participants would use in pricing the asset or liability.

The following table provides the level of measurement used to determine the fair value for each of our financial instruments on a recurring basis, as of September 30, 2012 and December 31, 2011:

(In thousands)
	As of September 30, 2012
	Level 1		Level 2		Level 3		Total Fair Value
Assets
Cash and cash equivalents	$	5,725	$	–	$	–	$	5,725
Restricted cash and cash equivalents		167,706		–		–		167,706
Restricted securities available for sale		0		–		–		0
Net investment in Loans receivable		–		–		1,895,056		1,895,056
Derivative instruments		–		18		–		18
Liabilities
Revolving secured line of credit	$	–	$	115,800	$	–	$	115,800
Secured financing		–		801,226		–		801,226
Mortgage note		–		4,104		–		4,104
Senior notes		385,875		–		–		385,875
(In thousands)
	As of December 31, 2011
	Level 1		Level 2		Level 3		Total Fair Value
Assets
Cash and cash equivalents	$	4,657	$	–	$	–	$	4,657
Restricted cash and cash equivalents		104,679		–		–		104,679
Restricted securities available for sale		810		–		–		810
Net investment in Loans receivable		–		–		1,615,009		1,615,009
Derivative instruments		–		16		–		16
Liabilities
Revolving secured line of credit	$	–	$	43,900	$	–	$	43,900
Secured financing		–		598,622		–		598,622
Mortgage note		–		4,288		–		4,288
Senior notes		365,500		–		–		365,500

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes [Abstract]

Income Taxes

9.           INCOME TAXES

A reconciliation of the U.S. federal statutory rate to our effective tax rate is as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2012			2011			2012			2011
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%		35.0	%
State income taxes		1.7	%		1.5	%		1.6	%		1.9	%
Changes in reserve for uncertain tax positions as a result of settlements and lapsed statutes and related interest		-0.4	%		-0.2	%		-0.4	%		-0.6	%
Other		0.5	%		0.2	%		0.3	%		0.0	%
Effective tax rate		36.8	%		36.5	%		36.5	%		36.3	%

The differences between the U.S. federal statutory rate and our effective tax rate are primarily due to state income taxes and reserves for uncertain tax positions and related interest that are included in the provision for income taxes.

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Stock-Based Compensation Plans (Summary Of Restricted Stock Units Activity) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, Nonvested as of December 31	348,000		521,000
Nonvested, Granted	313,000	[1]	25,000	[2]
Vested	143,000	[3]	158,000	[4]
Nonvested, Forfeited	(8,000)		(34,000)
Outstanding, Nonvested as of September 30	510,000		354,000
Weighted Average Grant-Date Fair Value Per Share, Nonvested, Outstanding as of December 31	$ 24.06		$ 19.99
Weighted Average Grant-Date Fair Value Per Share, Nonvested, Granted	$ 106.32	[1]	$ 58.54	[2]
Weighted Average Grant-Date Fair Value Per Share, Nonvested, Vested	$ 21.48	[3]	$ 20.99	[4]
Weighted Average Grant-Date Fair Value Per Share, Nonvested, Forfeited	$ 15.80		$ 20.50
Weighted Average Grant-Date Fair Value Per Share, Nonvested, Outstanding as of September 30	$ 75.43		$ 22.07
Outstanding, Vested as of December 31	428,000		270,000
Outstanding, Vested as of September 30	571,000		428,000
Weighted Average Grant-Date Fair Value Per Share, Vested, Outstanding as of December 31	$ 22.14		$ 22.94
Weighted Average Grant-Date Fair Value Per Share, Vested, Outstanding as of September 30	$ 21.97		$ 22.14
Outstanding, Total as of December 31	776,000		791,000
Total, Granted	313,000	[1]	25,000	[2]
Total, Forfeited	(8,000)		(34,000)
Outstanding, Total as of September 30	1,081,000		782,000
February 18, 2019 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Distribution date of vested restricted stock units	3,000
February 22, 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Distribution date of vested restricted stock units	60,000		60,000
February 22, 2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Distribution date of vested restricted stock units	77,000		90,000
February 22, 2017 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Distribution date of vested restricted stock units	6,000		8,000
December 31, 2022, 2023, 2024, 2025, and 2026 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Distribution date of vested restricted stock units	310,000
February 22, 2018 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Distribution date of vested restricted stock units			5,000
February 18, 2019 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Distribution date of vested restricted stock units			20,000

[1] The distribution date of vested restricted stock units is February 18, 2019 for 3 restricted stock units.  For 310 restricted stock units, the vested restricted stock units will be distributed in equal installments on December 31, 2022, 2023, 2024, 2025 and 2026.

[2] The distribution date of vested restricted stock units is February 22, 2018 for 5 restricted stock units and February 18, 2019 for 20 restricted stock units.

[3] The distribution date of vested restricted stock units is February 22, 2014 for 60 restricted stock units, February 22, 2016 for 77 restricted stock units and February 22, 2017 for 6 restricted stock units.

[4] The distribution date of vested restricted stock units is February 22, 2014 for 60 restricted stock units, February 22, 2016 for 90 restricted stock units and February 22, 2017 for 8 restricted stock units.

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Stock-Based Compensation Plans (Schedule Of Future Share-Based Compensation Cost) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remainder of 2012	$ 3,207
2013	10,710
2014	7,613
2015	6,327
2016	5,501
Thereafter	15,782
Total	49,140
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remainder of 2012	913
2013	3,086
2014	2,350
2015	2,029
2016	1,862
Thereafter	8,722
Total	18,962
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remainder of 2012	2,294
2013	7,624
2014	5,263
2015	4,298
2016	3,639
Thereafter	7,060
Total	$ 30,178

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Stock-Based Compensation Plans (Summary Of Restricted Stock Activity) (Details) (Restricted Stock [Member]) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Beginning Balance	48	112
Granted	199	9
Vested	(37)	(63)
Forfeited	(3)	(7)
Outstanding Ending Balance	207	51

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Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012 segment	Dec. 31, 2011
Summary Of Significant Accounting Policies [Line Items]
Restricted cash and cash equivalents	$ 167,706,000	$ 104,679,000
Write-off period for no forecasted future cash flows	10 years
Unamortized debt issuance expense	18,800,000	18,100,000
Uninsured cash and cash equivalents	3,500,000	4,100,000
Number of Reportable Segments	1
Restricted Cash And Cash Equivalents [Member]
Summary Of Significant Accounting Policies [Line Items]
Uninsured cash and cash equivalents	$ 146,700,000	$ 97,500,000
Senior Notes [Member]
Summary Of Significant Accounting Policies [Line Items]
Senior notes stated interest rate	9.125%

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Debt (Schedule Of Outstanding Term ABS Financings) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Term ABS 2010-1 [Member]
Debt Instrument [Line Items]
Close Date	November 4, 2010
Net Book Value of Dealer Loans Contributed at Closing	$ 126,751
Debt Instrument Revolving Period	2 years
Debt maturity date	Oct. 15, 2012	[1],[2]
Term ABS 2011-1 [Member]
Debt Instrument [Line Items]
Close Date	October 6, 2011
Net Book Value of Dealer Loans Contributed at Closing	250,827
Debt Instrument Revolving Period	2 years
Debt maturity date	Sep. 16, 2013	[1],[2]
Term ABS 2012-1 [Member]
Debt Instrument [Line Items]
Close Date	March 29, 2012
Net Book Value of Dealer Loans Contributed at Closing	251,681
Debt Instrument Revolving Period	2 years
Debt maturity date	Mar. 17, 2014	[1],[2]
Term ABS 2012-2 [Member]
Debt Instrument [Line Items]
Close Date	September 20, 2012
Net Book Value of Dealer Loans Contributed at Closing	$ 315,120
Debt Instrument Revolving Period	2 years
Debt maturity date	Sep. 15, 2014	[1],[2]

[1] Financing made available only to a specified subsidiary of the Company.

[2] Represents the revolving maturity date.  The outstanding balance will amortize after the maturity date based on the cash flows of the pledged assets.

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Summary Of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2012

Summary Of Significant Accounting Policies [Abstract]

Business Segment Information

Business Segment Information

We currently operate in one reportable segment which represents our core business of offering Dealers financing programs and related products and services that enable them to sell vehicles to consumers, regardless of their credit history.  The consolidated financial statements reflect the financial results of our one reportable operating segment.

Loans Receivable And Allowance For Credit Losses

Loans Receivable and Allowance for Credit Losses

Consumer Loan Assignment.  For accounting purposes, a Consumer Loan is considered to have been assigned to us after all of the following has occurred:

· the consumer and Dealer have signed a Consumer Loan contract;

· we have received the original Consumer Loan contract and supporting documentation;

· we have approved all of the related stipulations for funding; and

· we have provided funding to the Dealer in the form of either an advance under the Portfolio Program or one-time purchase payment under the Purchase Program.

Portfolio Segments and Classes. We are considered to be a lender to our Dealers for Consumer Loans assigned under our Portfolio Program and a purchaser of Consumer Loans assigned under our Purchase Program.  As a result, our Loan portfolio consists of two portfolio segments: Dealer Loans and Purchased Loans.  Each portfolio segment is comprised of one class of Consumer Loan assignments, which is Consumer Loans with deteriorated credit quality that were originated by Dealers to finance consumer purchases of vehicles and related ancillary products.

Dealer Loans.  Amounts advanced to Dealers for Consumer Loans assigned under the Portfolio Program are recorded as Dealer Loans and are aggregated by Dealer for purposes of recognizing revenue and evaluating impairment.  We account for Dealer Loans in a manner consistent with loans acquired with deteriorated credit quality.  The outstanding balance of each Dealer Loan included in Loans receivable is comprised of the following:

· the aggregate amount of all cash advances paid;

· finance charges;

· Dealer Holdback payments;

· accelerated Dealer Holdback payments; and

· recoveries.

Less:

· collections (net of certain collection costs); and

· write-offs.

An allowance for credit losses is maintained at an amount that reduces the net asset value (Dealer Loan balance less the allowance) to the value of forecasted future cash flows discounted at the yield established at the time of assignment.  This allowance calculation is completed for each individual Dealer.  The discounted value of future cash flows is comprised of estimated future collections on the Consumer Loans, less any estimated Dealer Holdback payments.  We write off Dealer Loans once there are no forecasted future cash flows on any of the associated Consumer Loans, which generally occurs 120months after the last Consumer Loan assignment.

Future collections on Dealer Loans are forecasted based on the historical performance of Consumer Loans with similar characteristics, adjusted for recent trends in payment patterns.  Dealer Holdback is forecasted based on the expected future collections and current advance balance of each Dealer Loan.  Cash flows from any individual Dealer Loan are often different than estimated cash flows at the time of assignment.  If such difference is favorable, the difference is recognized prospectively into income over the remaining life of the Dealer Loan through a yield adjustment.  If such difference is unfavorable, a provision for credit losses is recorded immediately as a current period expense and a corresponding allowance for credit losses is established.  Because differences between estimated cash flows at the time of assignment and actual cash flows occur often, an allowance is required for a significant portion of our Dealer Loan portfolio.  An allowance for credit losses does not necessarily indicate that a Dealer Loan is unprofitable, and during the last several years, very seldom were cash flows from a Dealer Loan insufficient to repay the initial amounts advanced to the Dealer.

Purchased Loans.  Amounts paid to Dealers for Consumer Loans assigned under the Purchase Program are recorded as Purchased Loans and are aggregated into pools based on the month of purchase for purposes of recognizing revenue and evaluating impairment.  We account for Purchased Loans as loans acquired with deteriorated credit quality.  The outstanding balance of each Purchased Loan pool included in Loans receivable is comprised of the following:

· the aggregate amount of all amounts paid during the month of purchase to purchase Consumer Loans from Dealers;

· finance charges; and

· recoveries.

Less:

· collections (net of certain collection costs); and

· write-offs.

An allowance for credit losses is maintained at an amount that reduces the net asset value (Purchased Loan pool balance less the allowance) to the value of forecasted future cash flows discounted at the yield established at the time of assignment.  This allowance calculation is completed for each individual monthly pool of Purchased Loans.  The discounted value of future cash flows is comprised of estimated future collections on the pool of Purchased Loans.  We write off pools of Purchased Loans once there are no forecasted future cash flows on any of the Purchased Loans included in the pool, which generally occurs 120 months after the month of purchase.

Future collections on Purchased Loans are forecasted based on the historical performance of Consumer Loans with similar characteristics, adjusted for recent trends in payment patterns.  Cash flows from any individual pool of Purchased Loans are often different than estimated cash flows at the time of assignment.  If such difference is favorable, the difference is recognized prospectively into income over the remaining life of the pool of Purchased Loans through a yield adjustment.  If such difference is unfavorable, a provision for credit losses is recorded immediately as a current period expense and a corresponding allowance for credit losses is established.

Credit Quality.  Substantially all of the Consumer Loans assigned to us are made to individuals with impaired or limited credit histories or higher debt-to-income ratios than are permitted by traditional lenders.  Consumer Loans made to these individuals generally entail a higher risk of delinquency, default and repossession and higher losses than loans made to consumers with better credit.  Since most of our revenue and cash flows are generated from these Consumer Loans, our ability to accurately forecast Consumer Loan performance is critical to our business and financial results.  At the time the Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan.  Based on these forecasts, an advance or one-time purchase payment is made to the related Dealer at a price designed to achieve an acceptable return on capital.

We monitor and evaluate the credit quality of Consumer Loans on a monthly basis by comparing our current forecasted collection rates to our initial expectations.  We use a statistical model that considers a number of credit quality indicators to estimate the expected collection rate for each Consumer Loan at the time of assignment.  The credit quality indicators considered in our model include attributes contained in the consumer’s credit bureau report, data contained in the consumer’s credit application, the structure of the proposed transaction, vehicle information and other factors.  We continue to evaluate the expected collection rate of each Consumer Loan subsequent to assignment primarily through the monitoring of consumer payment behavior.  Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast.  Since all known, significant credit quality indicators have already been factored into our forecasts and pricing, we are not able to use any specific credit quality indicators to predict or explain variances in actual performance from our initial expectations.  Any variances in performance from our initial expectations are the result of Consumer Loans performing differently than historical Consumer Loans with similar characteristics.  We periodically adjust our statistical pricing model for new trends that we identify though our evaluation of these forecasted collection rate variances.

When overall forecasted collection rates underperform our initial expectations, the decline in forecasted collections has a more adverse impact on the profitability of the Purchased Loans than on the profitability of the Dealer Loans.  For Purchased Loans, the decline in forecasted collections is absorbed entirely by us.  For Dealer Loans, the decline in the forecasted collections is substantially offset by a decline in forecasted payments of Dealer Holdback.

Forecast Methodology Changes and Modifications.  For the three and nine months ended September 30, 2012 and 2011, we did not make any methodology changes or significant modifications to our forecasts of future collections on Consumer Loans that had a material impact on our financial results.

Reinsurance

Reinsurance

VSC Re Company (“VSC Re”), our wholly-owned subsidiary, is engaged in the business of reinsuring coverage under vehicle service contracts sold to consumers by Dealers on vehicles financed by us.  VSC Re currently reinsures vehicle service contracts that are underwritten by one of our third party insurers.  Vehicle service contract premiums, which represent the selling price of the vehicle service contract to the consumer, less fees and certain administrative costs, are contributed to trust accounts controlled by VSC Re.  These premiums are used to fund claims covered under the vehicle service contracts.  VSC Re is a bankruptcy remote entity.  As such, our exposure to fund claims is limited to the trust assets controlled by VSC Re and our net investment in VSC Re.

Premiums from the reinsurance of vehicle service contracts are recognized over the life of the policy in proportion to expected costs of servicing those contracts.  Expected costs are determined based on our historical claims experience.  Claims are expensed through a provision for claims in the period the claim was incurred.  Capitalized acquisition costs are comprised of premium taxes and are amortized as general and administrative expense over the life of the contracts in proportion to premiums earned.  A summary of reinsurance activity is as follows:

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Net assumed written premiums	$	11,479	$	11,293	$	39,813	$	37,419
Net premiums earned		12,206		10,462		34,987		29,195
Provision for claims		9,122		8,363		26,704		22,733
Amortization of capitalized acquisition costs		342		288		952		747

We are considered the primary beneficiary of the trusts and as a result, the trusts have been consolidated on our balance sheet.  The trust assets and related reinsurance liabilities are as follows:

(In thousands)		As of
	Balance Sheet location	September 30, 2012			December 31, 2011
Trust assets	Restricted cash and cash equivalents		$	48,412		$	42,026
Unearned premium	Accounts payable and accrued liabilities			37,161			32,335
Claims reserve (1)	Accounts payable and accrued liabilities			1,515			1,297

(1)The claims reserve is estimated based on historical claims experience.

Our determination to consolidate the VSC Re trusts was based on the following:

· First, we determined that the trusts qualified as variable interest entities.  The trusts have insufficient equity at risk as no parties to the trusts were required to contribute assets that provide them with any ownership interest.

· Next, we determined that we have variable interests in the trusts.  We have a residual interest in the assets of the trusts, which is variable in nature, given that it increases or decreases based upon the actual loss experience of the related service contracts.  In addition, VSC Re is required to absorb any losses in excess of the trusts’ assets.

· Next, we evaluated the purpose and design of the trusts.  The primary purpose of the trusts is to provide third party administrators (“TPAs”) with funds to pay claims on vehicle service contracts and to accumulate and provide us with proceeds from investment income and residual funds.

Finally, we determined that we are the primary beneficiary of the trusts.  We control the amount of premium written and placed in the trusts through Consumer Loan assignments under our Programs, which is the activity that most significantly impacts the economic performance of the trusts.  We have the right to receive benefits from the trusts that could potentially be significant.  In addition, VSC Re has the obligation to absorb losses of the trusts that could potentially be significant.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents consist of readily marketable securities with original maturities at the date of acquisition of three months or less.  As of September 30, 2012 and December 31, 2011, we had $3.5 million and $4.1 million, respectively, in cash and cash equivalents that were not insured by the Federal Deposit Insurance Corporation (“FDIC”).

Restricted Cash And Cash Equivalents

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents increased to $167.7 million as of September 30, 2012 from $104.7 million as of December 31, 2011.  The following table summarizes restricted cash and cash equivalents:

(In thousands)	As of
	September 30, 2012		December 31, 2011
Cash related to secured financings	$	119,259	$	62,536
Cash held in trusts for future vehicle service contract claims (1)		48,447		42,143
Total restricted cash and cash equivalents	$	167,706	$	104,679

(1)The unearned premium and claims reserve associated with the trusts are included in accounts payable and accrued liabilities in the consolidated balance sheets.  As of September 30, 2012, the outstanding cash balance includes $48,412 related to VSC Re and $35 related to a discontinued profit sharing arrangement.  As of December 31, 2011, the outstanding cash balance includes $42,026 related to VSC Re and $117 related to a discontinued profit sharing arrangement.

As of September 30, 2012 and December 31, 2011, we had $146.7 million and $97.5 million, respectively, in restricted cash and cash equivalents that was not insured by the FDIC.

Restricted Securities Available For Sale

Restricted Securities Available for Sale

Restricted securities available for sale consisted of amounts held in a trust in accordance with a discontinued vehicle service contract profit sharing arrangement.  We determine the appropriate classification of our investments in debt securities at the time of purchase and reevaluate such determinations at each balance sheet date.  Debt securities for which we do not have the intent or ability to hold to maturity are classified as available for sale, and stated at fair value with unrealized gains and losses, net of income taxes included in the determination of comprehensive income and reported as a component of shareholders’ equity.

Restricted securities available for sale consisted of the following:

(In thousands)	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	0	$	0	$	0		$	0
(In thousands)	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	804	$	13	$	(7	)	$	810

The cost and estimated fair values of debt securities by contractual maturity were as follows (securities with multiple maturity dates are classified in the period of final maturity). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)	As of
	September 30, 2012				December 31, 2011
	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Contractual Maturity
Within one year	$	0	$	0	$	45	$	44
Over one year to five years		0		0		759		766
Total restricted securities available for sale	$	0	$	0	$	804	$	810

Deferred Debt Issuance Costs

Deferred Debt Issuance Costs

As of September 30, 2012 and December 31, 2011, deferred debt issuance costs were $18.8 million and $18.1 million, respectively, and are included in other assets in the consolidated balance sheets. Expenses associated with the issuance of debt instruments are capitalized and amortized as interest expense over the term of the debt instrument using the effective interest method for asset-backed secured financings (“Term ABS”) and 9.125% First Priority Senior Secured Notes due 2017 (“Senior Notes”) and the straight-line method for lines of credit and revolving secured warehouse (“Warehouse”) facilities.

Derivative And Hedging Instruments

Derivative and Hedging Instruments

We rely on various sources of financing, some of which contain floating rates of interest and expose us to risks associated with increases in interest rates.  We manage such risk primarily by entering into interest rate cap and interest rate swap agreements (“derivative instruments”).

For derivative instruments that are designated and qualify as hedging instruments, we formally document all relationships between the hedging instruments and hedged items, as well as their risk-management objective and strategy for undertaking various hedge transactions.  This process includes linking all derivative instruments that are designated as cash flow hedges to specific assets and liabilities on the balance sheet.  We also formally assess (both at the hedge’s inception and on a quarterly basis) whether the derivative instruments that are used in hedging transactions have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivative instruments may be expected to remain highly effective in future periods.  The effective portion of changes in the fair value of the derivative instruments is recorded in other comprehensive income, net of income taxes.  If it is determined that a derivative instrument is not (or has ceased to be) highly effective as a hedge, we would discontinue hedge accounting prospectively and the ineffective portion of changes in fair value would be recorded in interest expense.  For derivative instruments not designated as hedges, changes in the fair value of these agreements increase or decrease interest expense.

We recognize derivative instruments as either other assets or accounts payable and accrued liabilities on our consolidated balance sheets.  For additional information regarding our derivative and hedging instruments, see Note 6 to the consolidated financial statements.

New Accounting Updates

New Accounting Updates

Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.  In October 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-26, which amends Topic 944 (Financial Services – Insurance).  ASU No. 2010-26 is intended to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. The amendments specify which costs incurred in the acquisition of new and renewal contracts should be capitalized.  ASU No. 2010-26 is effective for fiscal years beginning after December 15, 2011. While the guidance in this ASU is required to be applied prospectively upon adoption, retrospective application is also permitted (to all prior periods presented). Early adoption is also permitted, but only at the beginning of an entity’s annual reporting period.  The adoption of ASU No. 2010-26 on January 1, 2012 did not have a material impact on our consolidated financial statements.

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. In May 2011, the FASB issued ASU No. 2011-04 which amends Topic 820 (Fair Value Measurement). ASU No. 2011-04 is intended to provide a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. The amendments in ASU No. 2011-04 include changes regarding how and when the valuation premise of highest and best use applies, the application of premiums and discounts, and new required disclosures. ASU No. 2011-04 is to be applied prospectively upon adoption and is effective for interim and annual periods beginning after December 15, 2011 with early adoption prohibited. The adoption of ASU No. 2011-04 on January 1, 2012 did not have a material impact on our consolidated financial statements, but expanded our disclosures related to fair value measurements.

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Derivative And Hedging Instruments (Tables)

9 Months Ended

Sep. 30, 2012

Derivative And Hedging Instruments [Abstract]

Schedule Of Terms Of Interest Rate Cap Agreements

As of September 30, 2012

Facility (in millions)		Facility Name	Purpose	Start	End	Notional (in millions)			Cap Interest Rate (1)
$	325.0	Warehouse Facility II	Cap Floating Rate	07/2011	06/2013	$	325.0		6.75	%
	75.0	Warehouse Facility III	Cap Floating Rate	09/2010	09/2013		37.5		6.75	%
	75.0	Warehouse Facility III	Cap Floating Rate	06/2012	07/2015		18.8	(2)	5.00	%
	75.0	Warehouse Facility IV	Cap Floating Rate	08/2011	03/2014		75.0		5.50	%

As of December 31, 2011

Facility (in millions)		Facility Name	Purpose	Start	End	Notional (in millions)		Cap Interest Rate (1)
$	325.0	Warehouse Facility II	Cap Floating Rate	09/2010	06/2013	$	325.0	6.75	%
	75.0	Warehouse Facility III	Cap Floating Rate	09/2010	09/2013		37.5	6.75	%
	75.0	Warehouse Facility IV	Cap Floating Rate	08/2011	03/2014		75.0	5.50	%

(1) Rate excludes the spread over the LIBOR rate or the commercial paper rate, as applicable.

(2) The notional amount increases to $56.3 million in September 2013 when the original Warehouse Facility III interest rate cap for $37.5 million ends.

Schedule Of Fair Values Of Derivative Instruments In Consolidated Balance Sheets

(In thousands)		Fair Value as of
	Balance Sheet location	September 30, 2012		December 31, 2011
Derivatives not designated as hedging instruments
Asset Derivatives
Interest rate caps	Other assets	$	18	$	16

Schedule Of Effect Of Derivative Instruments Designated As Hedging Instruments In Consolidated Financial Statements

(In thousands)
Derivatives in Cash Flow Hedging Relationships	(Loss) / Gain Recognized in OCI on Derivative (Effective Portion)					(Loss) / Gain Reclassified from Accumulated OCI into Income (Effective Portion)
	For the Three Months Ended September 30,						For the Three Months Ended September 30,
	2012		2011			Location	2012		2011
Interest rate swap	$	0	$	0		Interest expense	$	0	$	(49	)
(In thousands)
Derivatives in Cash Flow Hedging Relationships	(Loss) / Gain Recognized in OCI on Derivative (Effective Portion)					(Loss) / Gain Reclassified from Accumulated OCI into Income (Effective Portion)
	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
		2012		2011		Location		2012		2011
Interest rate swap	$	0	$	(16	)	Interest expense	$	0	$	(192	)

Schedule Of Effect Of Derivative Instruments Not Designated As Hedging Instruments In Consolidated Statements Of Income

(In thousands)
		Amount of (Loss) / Gain Recognized in Income on Derivatives							Amount of (Loss) / Gain Recognized in Income on Derivatives
		For the Three Months Ended September 30,							For the Nine Months Ended September 30,
Derivatives Not Designated as Hedging Instruments	Location	2012			2011				2012				2011
Interest rate caps	Interest expense	$	(7	)		$	(61	)		$	(66	)		$	(202	)

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Debt (Summary Of Additional Information Of Credit facilities) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revolving Secured Line Of Credit [Member]
Debt Instrument [Line Items]
Maximum outstanding balance	$ 139,000	$ 165,400	$ 187,300	$ 165,400
Average outstanding balance	100,133	113,098	98,876	108,262
Warehouse Facility II [Member]
Debt Instrument [Line Items]
Secured financing, maximum amount outstanding	173,800	264,000	177,200	264,000
Secured financings, average amount outstanding	143,733	215,522	128,606	184,224
Warehouse Facility III [Member]
Debt Instrument [Line Items]
Secured financing, maximum amount outstanding	62,000	75,000	73,000	75,000
Secured financings, average amount outstanding	51,423	73,587	60,760	47,436
Warehouse Facility IV [Member]
Debt Instrument [Line Items]
Secured financing, maximum amount outstanding	39,200	43,500	39,600	43,500
Secured financings, average amount outstanding	$ 37,809	$ 41,895	$ 37,847	$ 41,895

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Loans Receivable (Summary Of Changes In Loans Receivable) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	$ 1,977,794		$ 1,582,905		$ 1,752,891		$ 1,344,881
New Consumer Loan assignments	318,617	[1]	309,112	[1]	1,054,717	[1]	982,814	[1]
Principal collected on Loans receivable	(285,015)		(253,830)		(882,613)		(748,242)
Accelerated Dealer Holdback payments	9,884		12,859		34,107		37,275
Dealer Holdback payments	27,118		23,985		89,734		58,734
Transfers	0	[2]	0	[2]	0	[2]	0	[2]
Write-offs	(1,506)		(804)		(3,015)		(1,770)
Recoveries	605	[3]	463	[3]	1,744	[3]	1,536	[3]
Net change in other loans	(16)		(259)		(84)		(797)
Balance, end of period	2,047,481		1,674,431		2,047,481		1,674,431
Dealer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	1,736,578		1,331,973		1,506,539		1,082,039
New Consumer Loan assignments	293,379	[1]	278,395	[1]	968,725	[1]	888,602	[1]
Principal collected on Loans receivable	(252,398)		(216,860)		(774,361)		(628,406)
Accelerated Dealer Holdback payments	9,884		12,859		34,107		37,275
Dealer Holdback payments	27,118		23,985		89,734		58,734
Transfers	(5,946)	[2]	(2,933)	[2]	(16,150)	[2]	(10,490)	[2]
Write-offs	(1,480)		(736)		(2,483)		(1,563)
Recoveries	582	[3]	442	[3]	1,674	[3]	1,472	[3]
Net change in other loans	(16)		(259)		(84)		(797)
Balance, end of period	1,807,701		1,426,866		1,807,701		1,426,866
Purchased Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	241,216		250,932		246,352		262,842
New Consumer Loan assignments	25,238	[1]	30,717	[1]	85,992	[1]	94,212	[1]
Principal collected on Loans receivable	(32,617)		(36,970)		(108,252)		(119,836)
Accelerated Dealer Holdback payments	0		0		0		0
Dealer Holdback payments	0		0		0		0
Transfers	5,946	[2]	2,933	[2]	16,150	[2]	10,490	[2]
Write-offs	(26)		(68)		(532)		(207)
Recoveries	23	[3]	21	[3]	70	[3]	64	[3]
Net change in other loans	0		0		0		0
Balance, end of period	$ 239,780		$ 247,565		$ 239,780		$ 247,565

[1] The Dealer Loans amount represents advances paid to Dealers on Consumer Loans assigned under our Portfolio Program.  The Purchased Loans amount represents one-time payments made to Dealers to purchase Consumer Loans assigned under our Purchase Program.

[2] Under our Portfolio Program, certain events may result in Dealers forfeiting their rights to Dealer Holdback.  We transfer the Dealer’s outstanding Dealer Loan balance to Purchased Loans in the period this forfeiture occurs.

[3] Represents collections received on previously written off Loans.

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Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Consolidated Statements Of Comprehensive Income [Abstract]
Net income	$ 52,988	$ 49,960	$ 159,839	$ 137,995
Unrealized loss on derivatives qualifying as hedges
Unrealized loss on cash flow hedge, net of tax	0	0	0	(10)
Less: reclassification adjustment for loss on cash flow hedge included in net income, net of tax	0	31	0	121
Unrealized gain on available for sale securities
Unrealized gain on securities, net of tax	(4)	(4)	7	3
Less: reclassification adjustment for gain on sale of securities included in net income, net of tax	(13)	(2)	(13)	(2)
Other comprehensive income	(17)	25	(6)	112
Comprehensive income	$ 52,971	$ 49,985	$ 159,833	$ 138,107

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Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

3.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Segment Information

We currently operate in one reportable segment which represents our core business of offering Dealers financing programs and related products and services that enable them to sell vehicles to consumers, regardless of their credit history.  The consolidated financial statements reflect the financial results of our one reportable operating segment.

Loans Receivable and Allowance for Credit Losses

Consumer Loan Assignment.  For accounting purposes, a Consumer Loan is considered to have been assigned to us after all of the following has occurred:

· the consumer and Dealer have signed a Consumer Loan contract;

· we have received the original Consumer Loan contract and supporting documentation;

· we have approved all of the related stipulations for funding; and

· we have provided funding to the Dealer in the form of either an advance under the Portfolio Program or one-time purchase payment under the Purchase Program.

Portfolio Segments and Classes. We are considered to be a lender to our Dealers for Consumer Loans assigned under our Portfolio Program and a purchaser of Consumer Loans assigned under our Purchase Program.  As a result, our Loan portfolio consists of two portfolio segments: Dealer Loans and Purchased Loans.  Each portfolio segment is comprised of one class of Consumer Loan assignments, which is Consumer Loans with deteriorated credit quality that were originated by Dealers to finance consumer purchases of vehicles and related ancillary products.

Dealer Loans.  Amounts advanced to Dealers for Consumer Loans assigned under the Portfolio Program are recorded as Dealer Loans and are aggregated by Dealer for purposes of recognizing revenue and evaluating impairment.  We account for Dealer Loans in a manner consistent with loans acquired with deteriorated credit quality.  The outstanding balance of each Dealer Loan included in Loans receivable is comprised of the following:

· the aggregate amount of all cash advances paid;

· finance charges;

· Dealer Holdback payments;

· accelerated Dealer Holdback payments; and

· recoveries.

Less:

· collections (net of certain collection costs); and

· write-offs.

An allowance for credit losses is maintained at an amount that reduces the net asset value (Dealer Loan balance less the allowance) to the value of forecasted future cash flows discounted at the yield established at the time of assignment.  This allowance calculation is completed for each individual Dealer.  The discounted value of future cash flows is comprised of estimated future collections on the Consumer Loans, less any estimated Dealer Holdback payments.  We write off Dealer Loans once there are no forecasted future cash flows on any of the associated Consumer Loans, which generally occurs 120months after the last Consumer Loan assignment.

Future collections on Dealer Loans are forecasted based on the historical performance of Consumer Loans with similar characteristics, adjusted for recent trends in payment patterns.  Dealer Holdback is forecasted based on the expected future collections and current advance balance of each Dealer Loan.  Cash flows from any individual Dealer Loan are often different than estimated cash flows at the time of assignment.  If such difference is favorable, the difference is recognized prospectively into income over the remaining life of the Dealer Loan through a yield adjustment.  If such difference is unfavorable, a provision for credit losses is recorded immediately as a current period expense and a corresponding allowance for credit losses is established.  Because differences between estimated cash flows at the time of assignment and actual cash flows occur often, an allowance is required for a significant portion of our Dealer Loan portfolio.  An allowance for credit losses does not necessarily indicate that a Dealer Loan is unprofitable, and during the last several years, very seldom were cash flows from a Dealer Loan insufficient to repay the initial amounts advanced to the Dealer.

Purchased Loans.  Amounts paid to Dealers for Consumer Loans assigned under the Purchase Program are recorded as Purchased Loans and are aggregated into pools based on the month of purchase for purposes of recognizing revenue and evaluating impairment.  We account for Purchased Loans as loans acquired with deteriorated credit quality.  The outstanding balance of each Purchased Loan pool included in Loans receivable is comprised of the following:

· the aggregate amount of all amounts paid during the month of purchase to purchase Consumer Loans from Dealers;

· finance charges; and

· recoveries.

Less:

· collections (net of certain collection costs); and

· write-offs.

An allowance for credit losses is maintained at an amount that reduces the net asset value (Purchased Loan pool balance less the allowance) to the value of forecasted future cash flows discounted at the yield established at the time of assignment.  This allowance calculation is completed for each individual monthly pool of Purchased Loans.  The discounted value of future cash flows is comprised of estimated future collections on the pool of Purchased Loans.  We write off pools of Purchased Loans once there are no forecasted future cash flows on any of the Purchased Loans included in the pool, which generally occurs 120 months after the month of purchase.

Future collections on Purchased Loans are forecasted based on the historical performance of Consumer Loans with similar characteristics, adjusted for recent trends in payment patterns.  Cash flows from any individual pool of Purchased Loans are often different than estimated cash flows at the time of assignment.  If such difference is favorable, the difference is recognized prospectively into income over the remaining life of the pool of Purchased Loans through a yield adjustment.  If such difference is unfavorable, a provision for credit losses is recorded immediately as a current period expense and a corresponding allowance for credit losses is established.

Credit Quality.  Substantially all of the Consumer Loans assigned to us are made to individuals with impaired or limited credit histories or higher debt-to-income ratios than are permitted by traditional lenders.  Consumer Loans made to these individuals generally entail a higher risk of delinquency, default and repossession and higher losses than loans made to consumers with better credit.  Since most of our revenue and cash flows are generated from these Consumer Loans, our ability to accurately forecast Consumer Loan performance is critical to our business and financial results.  At the time the Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan.  Based on these forecasts, an advance or one-time purchase payment is made to the related Dealer at a price designed to achieve an acceptable return on capital.

We monitor and evaluate the credit quality of Consumer Loans on a monthly basis by comparing our current forecasted collection rates to our initial expectations.  We use a statistical model that considers a number of credit quality indicators to estimate the expected collection rate for each Consumer Loan at the time of assignment.  The credit quality indicators considered in our model include attributes contained in the consumer’s credit bureau report, data contained in the consumer’s credit application, the structure of the proposed transaction, vehicle information and other factors.  We continue to evaluate the expected collection rate of each Consumer Loan subsequent to assignment primarily through the monitoring of consumer payment behavior.  Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast.  Since all known, significant credit quality indicators have already been factored into our forecasts and pricing, we are not able to use any specific credit quality indicators to predict or explain variances in actual performance from our initial expectations.  Any variances in performance from our initial expectations are the result of Consumer Loans performing differently than historical Consumer Loans with similar characteristics.  We periodically adjust our statistical pricing model for new trends that we identify though our evaluation of these forecasted collection rate variances.

When overall forecasted collection rates underperform our initial expectations, the decline in forecasted collections has a more adverse impact on the profitability of the Purchased Loans than on the profitability of the Dealer Loans.  For Purchased Loans, the decline in forecasted collections is absorbed entirely by us.  For Dealer Loans, the decline in the forecasted collections is substantially offset by a decline in forecasted payments of Dealer Holdback.

Forecast Methodology Changes and Modifications.  For the three and nine months ended September 30, 2012 and 2011, we did not make any methodology changes or significant modifications to our forecasts of future collections on Consumer Loans that had a material impact on our financial results.

Reinsurance

VSC Re Company (“VSC Re”), our wholly-owned subsidiary, is engaged in the business of reinsuring coverage under vehicle service contracts sold to consumers by Dealers on vehicles financed by us.  VSC Re currently reinsures vehicle service contracts that are underwritten by one of our third party insurers.  Vehicle service contract premiums, which represent the selling price of the vehicle service contract to the consumer, less fees and certain administrative costs, are contributed to trust accounts controlled by VSC Re.  These premiums are used to fund claims covered under the vehicle service contracts.  VSC Re is a bankruptcy remote entity.  As such, our exposure to fund claims is limited to the trust assets controlled by VSC Re and our net investment in VSC Re.

Premiums from the reinsurance of vehicle service contracts are recognized over the life of the policy in proportion to expected costs of servicing those contracts.  Expected costs are determined based on our historical claims experience.  Claims are expensed through a provision for claims in the period the claim was incurred.  Capitalized acquisition costs are comprised of premium taxes and are amortized as general and administrative expense over the life of the contracts in proportion to premiums earned.  A summary of reinsurance activity is as follows:

(In thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Net assumed written premiums	$	11,479	$	11,293	$	39,813	$	37,419
Net premiums earned		12,206		10,462		34,987		29,195
Provision for claims		9,122		8,363		26,704		22,733
Amortization of capitalized acquisition costs		342		288		952		747

We are considered the primary beneficiary of the trusts and as a result, the trusts have been consolidated on our balance sheet.  The trust assets and related reinsurance liabilities are as follows:

(In thousands)		As of
	Balance Sheet location	September 30, 2012			December 31, 2011
Trust assets	Restricted cash and cash equivalents		$	48,412		$	42,026
Unearned premium	Accounts payable and accrued liabilities			37,161			32,335
Claims reserve (1)	Accounts payable and accrued liabilities			1,515			1,297

(1)The claims reserve is estimated based on historical claims experience.

Our determination to consolidate the VSC Re trusts was based on the following:

· First, we determined that the trusts qualified as variable interest entities.  The trusts have insufficient equity at risk as no parties to the trusts were required to contribute assets that provide them with any ownership interest.

· Next, we determined that we have variable interests in the trusts.  We have a residual interest in the assets of the trusts, which is variable in nature, given that it increases or decreases based upon the actual loss experience of the related service contracts.  In addition, VSC Re is required to absorb any losses in excess of the trusts’ assets.

· Next, we evaluated the purpose and design of the trusts.  The primary purpose of the trusts is to provide third party administrators (“TPAs”) with funds to pay claims on vehicle service contracts and to accumulate and provide us with proceeds from investment income and residual funds.

· Finally, we determined that we are the primary beneficiary of the trusts.  We control the amount of premium written and placed in the trusts through Consumer Loan assignments under our Programs, which is the activity that most significantly impacts the economic performance of the trusts.  We have the right to receive benefits from the trusts that could potentially be significant.  In addition, VSC Re has the obligation to absorb losses of the trusts that could potentially be significant.

Cash and Cash Equivalents

Cash equivalents consist of readily marketable securities with original maturities at the date of acquisition of three months or less.  As of September 30, 2012 and December 31, 2011, we had $3.5 million and $4.1 million, respectively, in cash and cash equivalents that were not insured by the Federal Deposit Insurance Corporation (“FDIC”).

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents increased to $167.7 million as of September 30, 2012 from $104.7 million as of December 31, 2011.  The following table summarizes restricted cash and cash equivalents:

(In thousands)	As of
	September 30, 2012		December 31, 2011
Cash related to secured financings	$	119,259	$	62,536
Cash held in trusts for future vehicle service contract claims (1)		48,447		42,143
Total restricted cash and cash equivalents	$	167,706	$	104,679

(1)The unearned premium and claims reserve associated with the trusts are included in accounts payable and accrued liabilities in the consolidated balance sheets.  As of September 30, 2012, the outstanding cash balance includes $48,412 related to VSC Re and $35 related to a discontinued profit sharing arrangement.  As of December 31, 2011, the outstanding cash balance includes $42,026 related to VSC Re and $117 related to a discontinued profit sharing arrangement.

As of September 30, 2012 and December 31, 2011, we had $146.7 million and $97.5 million, respectively, in restricted cash and cash equivalents that was not insured by the FDIC.

Restricted Securities Available for Sale

Restricted securities available for sale consisted of amounts held in a trust in accordance with a discontinued vehicle service contract profit sharing arrangement.  We determine the appropriate classification of our investments in debt securities at the time of purchase and reevaluate such determinations at each balance sheet date.  Debt securities for which we do not have the intent or ability to hold to maturity are classified as available for sale, and stated at fair value with unrealized gains and losses, net of income taxes included in the determination of comprehensive income and reported as a component of shareholders’ equity.

Restricted securities available for sale consisted of the following:

(In thousands)	As of September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	0	$	0	$	0		$	0
(In thousands)	As of December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate bonds	$	804	$	13	$	(7	)	$	810

The cost and estimated fair values of debt securities by contractual maturity were as follows (securities with multiple maturity dates are classified in the period of final maturity). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)	As of
	September 30, 2012				December 31, 2011
	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Contractual Maturity
Within one year	$	0	$	0	$	45	$	44
Over one year to five years		0		0		759		766
Total restricted securities available for sale	$	0	$	0	$	804	$	810

Deferred Debt Issuance Costs

As of September 30, 2012 and December 31, 2011, deferred debt issuance costs were $18.8 million and $18.1 million, respectively, and are included in other assets in the consolidated balance sheets. Expenses associated with the issuance of debt instruments are capitalized and amortized as interest expense over the term of the debt instrument using the effective interest method for asset-backed secured financings (“Term ABS”) and 9.125% First Priority Senior Secured Notes due 2017 (“Senior Notes”) and the straight-line method for lines of credit and revolving secured warehouse (“Warehouse”) facilities.

Derivative and Hedging Instruments

We rely on various sources of financing, some of which contain floating rates of interest and expose us to risks associated with increases in interest rates.  We manage such risk primarily by entering into interest rate cap and interest rate swap agreements (“derivative instruments”).

For derivative instruments that are designated and qualify as hedging instruments, we formally document all relationships between the hedging instruments and hedged items, as well as their risk-management objective and strategy for undertaking various hedge transactions.  This process includes linking all derivative instruments that are designated as cash flow hedges to specific assets and liabilities on the balance sheet.  We also formally assess (both at the hedge’s inception and on a quarterly basis) whether the derivative instruments that are used in hedging transactions have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivative instruments may be expected to remain highly effective in future periods.  The effective portion of changes in the fair value of the derivative instruments is recorded in other comprehensive income, net of income taxes.  If it is determined that a derivative instrument is not (or has ceased to be) highly effective as a hedge, we would discontinue hedge accounting prospectively and the ineffective portion of changes in fair value would be recorded in interest expense.  For derivative instruments not designated as hedges, changes in the fair value of these agreements increase or decrease interest expense.

We recognize derivative instruments as either other assets or accounts payable and accrued liabilities on our consolidated balance sheets.  For additional information regarding our derivative and hedging instruments, see Note 6 to the consolidated financial statements.

New Accounting Updates

Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.  In October 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-26, which amends Topic 944 (Financial Services – Insurance).  ASU No. 2010-26 is intended to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. The amendments specify which costs incurred in the acquisition of new and renewal contracts should be capitalized.  ASU No. 2010-26 is effective for fiscal years beginning after December 15, 2011. While the guidance in this ASU is required to be applied prospectively upon adoption, retrospective application is also permitted (to all prior periods presented). Early adoption is also permitted, but only at the beginning of an entity’s annual reporting period.  The adoption of ASU No. 2010-26 on January 1, 2012 did not have a material impact on our consolidated financial statements.

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. In May 2011, the FASB issued ASU No. 2011-04 which amends Topic 820 (Fair Value Measurement). ASU No. 2011-04 is intended to provide a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. The amendments in ASU No. 2011-04 include changes regarding how and when the valuation premise of highest and best use applies, the application of premiums and discounts, and new required disclosures. ASU No. 2011-04 is to be applied prospectively upon adoption and is effective for interim and annual periods beginning after December 15, 2011 with early adoption prohibited. The adoption of ASU No. 2011-04 on January 1, 2012 did not have a material impact on our consolidated financial statements, but expanded our disclosures related to fair value measurements.

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Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Related Party Transaction [Line Items]
Affiliated Dealer Loan balances	$ 5,634		$ 5,634		$ 4,949
Percentage of Affiliated Dealer Loan balances	0.30%		0.30%		0.30%
New Consumer Loan assignments			968,725	888,602
Accelerated Dealer Holdback payments	(9,884)	(12,859)	(34,107)	(37,275)
Dealer Holdback payments	27,118	23,985	89,734	58,734
Affiliated Dealer Activity [Member]
Related Party Transaction [Line Items]
Dealer Loan revenue	284	349	849	1,330
Dealer Loan revenue, percentage	0.20%	0.40%	0.20%	0.50%
New Consumer Loan assignments	928	128	2,662	788
New Consumer Loan assignments, percentage	0.30%	0.00%	0.30%	0.10%
Accelerated Dealer Holdback payments	79	0	149	24
Accelerated Dealer Holdback payments, percentage	0.80%	0.00%	0.40%	0.10%
Dealer Holdback payments	$ 692	$ 652	$ 2,643	$ 1,757
Dealer Holdback payments, percentage	2.60%	2.70%	2.90%	3.00%

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Fair Value Of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Of Financial Instruments [Abstract]

Schedule Of Comparison Of The Carrying Value And Estimated Fair Value Of These Financial Instruments

(In thousands)
	As of September 30, 2012				As of December 31, 2011
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Cash and cash equivalents	$	5,725	$	5,725	$	4,657	$	4,657
Restricted cash and cash equivalents		167,706		167,706		104,679		104,679
Restricted securities available for sale		0		0		810		810
Net investment in Loans receivable		1,876,718		1,895,056		1,598,573		1,615,009
Derivative instruments		18		18		16		16
Liabilities
Revolving secured line of credit	$	115,800	$	115,800	$	43,900	$	43,900
Secured financing		791,850		801,226		599,281		598,622
Mortgage note		4,104		4,104		4,288		4,288
Senior notes		350,307		385,875		350,378		365,500

Schedule Of Assets And Liabilities, Measured At Fair Value On A Recurring Basis

(In thousands)
	As of September 30, 2012
	Level 1		Level 2		Level 3		Total Fair Value
Assets
Cash and cash equivalents	$	5,725	$	–	$	–	$	5,725
Restricted cash and cash equivalents		167,706		–		–		167,706
Restricted securities available for sale		0		–		–		0
Net investment in Loans receivable		–		–		1,895,056		1,895,056
Derivative instruments		–		18		–		18
Liabilities
Revolving secured line of credit	$	–	$	115,800	$	–	$	115,800
Secured financing		–		801,226		–		801,226
Mortgage note		–		4,104		–		4,104
Senior notes		385,875		–		–		385,875
(In thousands)
	As of December 31, 2011
	Level 1		Level 2		Level 3		Total Fair Value
Assets
Cash and cash equivalents	$	4,657	$	–	$	–	$	4,657
Restricted cash and cash equivalents		104,679		–		–		104,679
Restricted securities available for sale		810		–		–		810
Net investment in Loans receivable		–		–		1,615,009		1,615,009
Derivative instruments		–		16		–		16
Liabilities
Revolving secured line of credit	$	–	$	43,900	$	–	$	43,900
Secured financing		–		598,622		–		598,622
Mortgage note		–		4,288		–		4,288
Senior notes		365,500		–		–		365,500

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Summary Of Significant Accounting Policies (Restricted Securities Available For Sale) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Restricted Cash and Cash Equivalents Items [Line Items]
Total restricted securities available for sale	$ 0	$ 810
Corporate Bonds [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Cost	0	804
Gross Unrealized Gains	0	13
Gross Unrealized Losses	0	(7)
Total restricted securities available for sale	$ 0	$ 810

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Litigation And Contingent Liabilities

9 Months Ended

Sep. 30, 2012

Litigation And Contingent Liabilities [Abstract]

Litigation And Contingent Liabilities

13.        LITIGATION AND CONTINGENT LIABILITIES

In the normal course of business and as a result of the customer-oriented nature of the industry in which we operate, industry participants are frequently subject to various customer claims and litigation seeking damages and statutory penalties.  The claims allege, among other theories of liability, violations of state, federal and foreign truth-in-lending, credit availability, credit reporting, customer protection, warranty, debt collection, insurance and other customer-oriented laws and regulations, including claims seeking damages for physical and mental damages relating to our repossession and sale of the customer’s vehicle and other debt collection activities.  As the assignee of Consumer Loans originated by Dealers, we may also be named as a co-defendant in lawsuits filed by customers principally against Dealers.  We may also have disputes and litigation with Dealers. The claims may allege, among other theories of liability, that we breached our dealer servicing agreement.  Many of these cases are filed as purported class actions and seek damages in large dollar amounts.  The following matters include current actions to which we are a party and updates to matters that were disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.

On December 3, 2010, we received a civil investigative demand from the Office of the Missouri Attorney General relating to our practices regarding collections from Missouri consumers who claim to have not received title from the Dealer at the time of their purchase.  On January 24, 2011, we provided an initial response and on May 16, 2011, we filed a supplemental response.  We cooperated with the Attorney General throughout the entire investigation, which the State confirms has been completed.  We have reached an agreement in principle with the State of Missouri to enter into an assurance of voluntary compliance that resolves all possible claims by the State in relation to the subject of the civil investigative demand but which involves no admission of any violation or wrongdoing by the Company.  We will continue to work with the Attorney General to finalize the terms of the settlement.

On November 22, 2011, an arbitration proceeding against us was commenced before the American Arbitration Association ("AAA") in Southfield, Michigan.  The arbitration demand was brought by a Dealer and soughtunspecified money damages for alleged breach of the dealer servicing agreement.  The claimant purportedto proceed on behalf of a putative class of similarly situated Dealers.  On or about January 3, 2012, we filed an answer, denying the allegations in the demand and opposing claimant’s attempt to proceed on a class-wide basis based on the terms of the parties’ arbitration agreement, which does not authorize class-widearbitration, and recent controlling Supreme Court authority.  An arbitration panel was never appointed.  On August 1, 2012, we received notice that the Dealer dismissed the proceeding against the Company.

On September 7, 2012, an arbitration proceeding against us was commenced before the AAA in Southfield, Michigan.  The arbitration demand was brought by a group of six Dealers and sought unspecified money damages for claims relating to the dealer servicing agreements of these Dealers.  We previously received an unfiled demand from five of these six Dealers alleging similar claims.  On or about September 27, 2012, we filed an objection to the consolidation of these arbitration claims based on the terms of the parties’ respective arbitration agreements, which do not authorize consolidated arbitration proceedings.  On October 9, 2012, the AAA sustained our objection holding that the cases could only proceed on an individual basis.  Plaintiffs failed to do so and the AAA deemed the matter not properly filed.

An adverse ultimate disposition in any action to which we are a party or otherwise subject could have a material adverse impact on our financial position, liquidity and results of operations.