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FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES
 9 Months Ended
Sep. 30, 2025
Receivables [Abstract]  
FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES
Ford Credit manages finance receivables as “consumer” and “non-consumer” portfolios.  The receivables are generally secured by the vehicles, inventory, or other property being financed.

Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at amortized cost, net of any allowance for credit losses.

For all finance receivables, Ford Credit defines “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date.

Ford Credit finance receivables, net were as follows (in millions):
 December 31,
2024		September 30,
2025
Consumer  
Retail installment contracts, gross$79,459 $78,884 
Finance leases, gross8,357 9,287 
Retail financing, gross87,816 88,171 
Unearned interest supplements(4,598)(4,333)
Consumer finance receivables83,218 83,838 
Non-Consumer 
Dealer financing29,282 25,420 
Non-Consumer finance receivables29,282 25,420 
Total recorded investment$112,500 $109,258 
Recorded investment in finance receivables$112,500 $109,258 
Allowance for credit losses(864)(897)
Total finance receivables, net$111,636 $108,361 
Current portion$51,850 $48,214 
Non-current portion59,786 60,147 
Total finance receivables, net$111,636 $108,361 
Net finance receivables subject to fair value (a)$103,755 $99,610 
Fair value (b)103,231 100,501 
__________
(a)Net finance receivables subject to fair value exclude finance leases.
(b)The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy.

Ford Credit’s finance leases are comprised of sales-type and direct financing leases. Financing revenue from finance leases for the third quarter of 2024 and 2025 was $137 million and $146 million, respectively, and for the first nine months of 2024 and 2025 was $376 million and $431 million, respectively, and is included in Ford Credit revenues on our consolidated income statements.

At December 31, 2024 and September 30, 2025, accrued interest was $335 million and $288 million, respectively, which we report in Other assets in the current assets section of our consolidated balance sheets.

Included in the recorded investment in finance receivables at December 31, 2024 and September 30, 2025 were consumer receivables of $47.6 billion and $46.2 billion, respectively, and non-consumer receivables of $24.4 billion and $22.8 billion, respectively, (including Ford Blue, Ford Model e, and Ford Pro receivables sold to Ford Credit, which we report in Trade and other receivables) that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions.
NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Credit Quality

Consumer Portfolio. Credit quality ratings for consumer receivables are based on aging. Receivables over 60 days past due are in intensified collection status.

The credit quality analysis of consumer receivables at December 31, 2024 and gross charge-offs during the year ended December 31, 2024 were as follows (in millions):
Amortized Cost Basis by Origination Year
Prior to 202020202021202220232024TotalPercent
Consumer
31 - 60 days past due$43 $93 $104 $187 $242 $203 $872 1.0%
Greater than 60 days past due15 27 35 57 82 59 275 0.4 
Total past due58 120 139 244 324 262 1,147 1.4 
Current788 3,162 5,458 12,275 24,153 36,235 82,071 98.6 
Total$846 $3,282 $5,597 $12,519 $24,477 $36,497 $83,218 100.0%
Gross charge-offs$46 $58 $71 $152 $191 $50 $568 

The credit quality analysis of consumer receivables at September 30, 2025 and gross charge-offs during the first nine months of 2025 were as follows (in millions):
Amortized Cost Basis by Origination Year
Prior to 202120212022202320242025TotalPercent
Consumer
31 - 60 days past due$67 $67 $136 $201 $237 $95 $803 1.0%
Greater than 60 days past due23 25 48 67 77 41 281 0.3 
Total past due90 92 184 268 314 136 1,084 1.3 
Current1,629 2,880 7,632 17,410 29,372 23,831 82,754 98.7 
Total$1,719 $2,972 $7,816 $17,678 $29,686 $23,967 $83,838 100.0%
Gross charge-offs$44 $43 $96 $142 $148 $17 $490 

Non-Consumer Portfolio. The credit quality of dealer financing receivables is evaluated based on Ford Credit’s internal dealer risk rating analysis. Ford Credit uses a proprietary model to assign each dealer a risk rating. This model uses historical dealer performance data to identify key factors about a dealer that are considered most significant in predicting a dealer’s ability to meet its financial obligations. Ford Credit also considers numerous other financial and qualitative factors of the dealer’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with Ford Credit and other creditors.

Dealers are assigned to one of four groups according to risk ratings as follows:

•Group I – strong to superior financial metrics;
•Group II – fair to favorable financial metrics;
•Group III – marginal to weak financial metrics; and
•Group IV – poor financial metrics, including dealers classified as uncollectible.

Ford Credit generally suspends credit lines and extends no further funding to dealers classified in Group IV.
NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The credit quality analysis of dealer financing receivables at December 31, 2024 and gross charge-offs during the year ended December 31, 2024 were as follows (in millions):
Amortized Cost Basis by Origination YearWholesale Loans
Dealer Loans
Prior to 202020202021202220232024TotalTotalPercent
Group I$270 $63 $97 $47 $217 $245 $939 $25,257 $26,196 89.4%
Group II13 — 3 1 28 31 76 2,494 2,570 8.8 
Group III— — 2 — 1 4 7 462 469 1.6 
Group IV— — — — — 1 1 46 47 0.2 
Total (a)$283 $63 $102 $48 $246 $281 $1,023 $28,259 $29,282 100.0%
Gross charge-offs$1 $— $— $— $— $— $1 $6 $7 
__________
(a)Total past due dealer financing receivables at December 31, 2024 were $8 million.

The credit quality analysis of dealer financing receivables at September 30, 2025 and gross charge-offs during the first nine months of 2025 were as follows (in millions):
Amortized Cost Basis by Origination YearWholesale Loans
Dealer Loans
Prior to 202120212022202320242025TotalTotalPercent
Group I$295 $70 $33 $171 $82 $169 $820 $20,352 $21,172 83.3%
Group II26 8 3 34 47 34 152 3,519 3,671 14.4 
Group III— — — 1 1 5 7 526 533 2.1 
Group IV— — — — 1 5 6 38 44 0.2 
Total (a)$321 $78 $36 $206 $131 $213 $985 $24,435 $25,420 100.0%
Gross charge-offs$— $— $— $3 $— $— $3 $10 $13 
__________
(a)Total past due dealer financing receivables at September 30, 2025 were $6 million.
NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Allowance for Credit Losses

The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in finance receivables as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly.

Adjustments to the allowance for credit losses are made by recording charges to Ford Credit interest, operating, and other expenses on our consolidated income statements. The uncollectible portion of a finance receivable is charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the customer or borrower, the value of the collateral, recourse to guarantors, and other factors.

Charge-offs on finance receivables include uncollected amounts related to principal, interest, late fees, and other allowable charges. Recoveries on finance receivables previously charged off as uncollectible are credited to the allowance for credit losses. In the event Ford Credit repossesses the collateral, the receivable is charged off and the collateral is recorded at its estimated fair value less costs to sell and reported in Other assets on our consolidated balance sheets.

An analysis of the allowance for credit losses related to finance receivables for the periods ended September 30 was as follows (in millions):
Third Quarter 2024First Nine Months 2024
 ConsumerNon-ConsumerTotalConsumerNon-ConsumerTotal
Allowance for credit losses
Beginning balance$876 $4 $880 $879 $3 $882 
Charge-offs(155)— (155)(408)(7)(415)
Recoveries41 — 41 122 3 125 
Provision for credit losses99 — 99 277 5 282 
Other (a)(3)— (3)(12)— (12)
Ending balance$858 $4 $862 $858 $4 $862 

Third Quarter 2025First Nine Months 2025
 ConsumerNon-ConsumerTotalConsumerNon-ConsumerTotal
Allowance for credit losses
Beginning balance$885 $5 $890 $860 $4 $864 
Charge-offs(177)1 (176)(490)(13)(503)
Recoveries48 — 48 133 — 133 
Provision for credit losses134 1 135 374 15 389 
Other (a)— — — 13 1 14 
Ending balance$890 $7 $897 $890 $7 $897 
__________
(a)    Primarily represents amounts related to foreign currency translation adjustments.