wes l.

CACC: Recent Events Add to the Short Thesis

bro_t_pro,
I believe to you to revisit your understanding of CACC. The advance to the dealer is non-recourse. See their 10k: "offer dealers a non-recourse cash payment (referred to as an “advance”) against anticipated future collections on Consumer Loans serviced for that dealer." The dealer is "in the money" at origination and historically has received little on the back end (Collection rate - advance rate - 20% fee). Dealers prefer the "purchase product" because they get a bigger advance and are more "in the money" at the sale of the car. The purchase product has grown from 5% to around 35% in the past year.