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Leases | 9 Months Ended
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Sep. 30, 2025
Leases [Abstract] |
Leases | NOTE 15 — LEASES The Company is party to various lease agreements for real estate and transportation equipment. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company also assesses whether each lease is an operating or finance lease at the lease commencement date. Rent expense of operating leases is recognized on a straight-line basis over the lease term and includes scheduled rent increases as well as amortization of tenant improvement allowances. Operating Leases As of September 30, 2025, the Company is a tenant under various operating leases related to certain of its hubs, vending machines, inspection and reconditioning centers, auction locations, storage, parking and corporate offices. The initial terms expire at various dates between 2025 and 2038. Many of the leases include one or more renewal options ranging from one to twenty years and some contain purchase options. The Company leases and subleases certain of its real estate to third parties. Lease and sublease income for the three months ended September 30, 2025 and 2024 was $3 million and $2 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $7 million and $5 million, respectively, is included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. The Company's operating leases are included in operating lease right-of-use assets, other current liabilities, and operating lease liabilities on the accompanying unaudited condensed consolidated balance sheets. Refer to Note 6 — Related Party Transactions for further discussion of operating leases with related parties. Finance Leases The Company has finance leases for certain equipment in its transportation fleet. The leases have initial terms of two to five years, some of which include extension options for up to four additional years, and require monthly payments. The Company's finance leases are included in current portion of long-term debt and long-term debt on the accompanying unaudited condensed consolidated balance sheets. Lease Costs and Activity The Company's lease costs and activity during the three and nine months ended September 30, 2025 and 2024 were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
| (in millions)
Lease costs: |  |  |  |  |  |  |
Finance leases: |  |  |  |  |  |  |
Amortization of finance lease assets | $ | 24 |  |  | $ | 21 |  |  | $ | 70 |  |  | $ | 72 |
Interest obligations under finance leases | 2 |  |  | 3 |  |  | 7 |  |  | 10 |
Total finance lease costs | $ | 26 |  |  | $ | 24 |  |  | $ | 77 |  |  | $ | 82 |
Operating leases: |  |  |  |  |  |  |
Fixed lease costs to non-related parties | $ | 15 |  |  | $ | 15 |  |  | $ | 47 |  |  | $ | 45 |
Fixed lease costs to related parties | — |  |  | 1 |  |  | 2 |  |  | 3 |
Total operating lease costs | $ | 15 |  |  | $ | 16 |  |  | $ | 49 |  |  | $ | 48 |
Cash payments related to lease liabilities included in operating cash flows: |  |  |  |  |  |  |
Operating lease liabilities to non-related parties |  |  |  |  | $ | 74 |  |  | $ | 69 |
Operating lease liabilities to related parties |  |  |  |  | $ | 2 |  |  | $ | 3 |
Interest payments on finance lease liabilities |  |  |  |  | $ | 7 |  |  | $ | 10 |
Cash payments related to lease liabilities included in financing cash flows: |  |  |  |  |  |  |
Principal payments on finance lease liabilities |  |  |  |  | $ | 69 |  |  | $ | 61 |
Maturity Analysis of Lease Liabilities The following table summarizes maturities of lease liabilities as of September 30, 2025:
|  |  | Operating Leases (1) |  |
| Finance Leases |  | Related Party (2) |  | Non-Related Party |  | Total Operating |  | Total
| (in millions)
Remainder of 2025 | $ | 22 |  |  | $ | 1 |  |  | $ | 25 |  |  | $ | 26 |  |  | $ | 48 |
2026 | 79 |  |  | 2 |  |  | 103 |  |  | 105 |  |  | 184 |
2027 | 43 |  |  | 2 |  |  | 96 |  |  | 98 |  |  | 141 |
2028 | 16 |  |  | 2 |  |  | 88 |  |  | 90 |  |  | 106 |
2029 | 9 |  |  | 1 |  |  | 69 |  |  | 70 |  |  | 79 |
Thereafter | 5 |  |  | — |  |  | 223 |  |  | 223 |  |  | 228 |
Total minimum lease payments | 174 |  |  | 8 |  |  | 604 |  |  | 612 |  |  | 786 |
Less: amount representing interest | (14) |  |  | (1) |  |  | (136) |  |  | (137) |  |  | (151) |
Total lease liabilities | $ | 160 |  |  | $ | 7 |  |  | $ | 468 |  |  | $ | 475 |  |  | $ | 635 |
(1) Leases that are on a month-to-month basis, short-term leases, and lease extensions that the Company does not expect to exercise are not included. (2) Related party lease payments exclude rent payments due under the DriveTime lease agreements for locations where the Company shares space with DriveTime, as those are variable lease payments contingent upon the Company's utilization of the leased assets. As of September 30, 2025 and December 31, 2024, none of the Company's lease agreements contain material residual value guarantees or material restrictive covenants. Lease Terms and Discount Rates The weighted-average remaining lease terms and discount rates as of September 30, 2025 and 2024 were as follows, excluding short-term operating leases:
| As of September 30,
| 2025 |  | 2024
Weighted-average remaining lease terms (years) |  |  |
Operating leases | 7.0 |  | 7.4
Finance leases | 2.7 |  | 2.8
Weighted-average discount rate |  |  |
Operating leases | 7.4 | % |  | 7.3 | %
Finance leases | 6.2 | % |  | 5.9 | %
Leases | NOTE 15 — LEASES The Company is party to various lease agreements for real estate and transportation equipment. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company also assesses whether each lease is an operating or finance lease at the lease commencement date. Rent expense of operating leases is recognized on a straight-line basis over the lease term and includes scheduled rent increases as well as amortization of tenant improvement allowances. Operating Leases As of September 30, 2025, the Company is a tenant under various operating leases related to certain of its hubs, vending machines, inspection and reconditioning centers, auction locations, storage, parking and corporate offices. The initial terms expire at various dates between 2025 and 2038. Many of the leases include one or more renewal options ranging from one to twenty years and some contain purchase options. The Company leases and subleases certain of its real estate to third parties. Lease and sublease income for the three months ended September 30, 2025 and 2024 was $3 million and $2 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $7 million and $5 million, respectively, is included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. The Company's operating leases are included in operating lease right-of-use assets, other current liabilities, and operating lease liabilities on the accompanying unaudited condensed consolidated balance sheets. Refer to Note 6 — Related Party Transactions for further discussion of operating leases with related parties. Finance Leases The Company has finance leases for certain equipment in its transportation fleet. The leases have initial terms of two to five years, some of which include extension options for up to four additional years, and require monthly payments. The Company's finance leases are included in current portion of long-term debt and long-term debt on the accompanying unaudited condensed consolidated balance sheets. Lease Costs and Activity The Company's lease costs and activity during the three and nine months ended September 30, 2025 and 2024 were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
| (in millions)
Lease costs: |  |  |  |  |  |  |
Finance leases: |  |  |  |  |  |  |
Amortization of finance lease assets | $ | 24 |  |  | $ | 21 |  |  | $ | 70 |  |  | $ | 72 |
Interest obligations under finance leases | 2 |  |  | 3 |  |  | 7 |  |  | 10 |
Total finance lease costs | $ | 26 |  |  | $ | 24 |  |  | $ | 77 |  |  | $ | 82 |
Operating leases: |  |  |  |  |  |  |
Fixed lease costs to non-related parties | $ | 15 |  |  | $ | 15 |  |  | $ | 47 |  |  | $ | 45 |
Fixed lease costs to related parties | — |  |  | 1 |  |  | 2 |  |  | 3 |
Total operating lease costs | $ | 15 |  |  | $ | 16 |  |  | $ | 49 |  |  | $ | 48 |
Cash payments related to lease liabilities included in operating cash flows: |  |  |  |  |  |  |
Operating lease liabilities to non-related parties |  |  |  |  | $ | 74 |  |  | $ | 69 |
Operating lease liabilities to related parties |  |  |  |  | $ | 2 |  |  | $ | 3 |
Interest payments on finance lease liabilities |  |  |  |  | $ | 7 |  |  | $ | 10 |
Cash payments related to lease liabilities included in financing cash flows: |  |  |  |  |  |  |
Principal payments on finance lease liabilities |  |  |  |  | $ | 69 |  |  | $ | 61 |
Maturity Analysis of Lease Liabilities The following table summarizes maturities of lease liabilities as of September 30, 2025:
|  |  | Operating Leases (1) |  |
| Finance Leases |  | Related Party (2) |  | Non-Related Party |  | Total Operating |  | Total
| (in millions)
Remainder of 2025 | $ | 22 |  |  | $ | 1 |  |  | $ | 25 |  |  | $ | 26 |  |  | $ | 48 |
2026 | 79 |  |  | 2 |  |  | 103 |  |  | 105 |  |  | 184 |
2027 | 43 |  |  | 2 |  |  | 96 |  |  | 98 |  |  | 141 |
2028 | 16 |  |  | 2 |  |  | 88 |  |  | 90 |  |  | 106 |
2029 | 9 |  |  | 1 |  |  | 69 |  |  | 70 |  |  | 79 |
Thereafter | 5 |  |  | — |  |  | 223 |  |  | 223 |  |  | 228 |
Total minimum lease payments | 174 |  |  | 8 |  |  | 604 |  |  | 612 |  |  | 786 |
Less: amount representing interest | (14) |  |  | (1) |  |  | (136) |  |  | (137) |  |  | (151) |
Total lease liabilities | $ | 160 |  |  | $ | 7 |  |  | $ | 468 |  |  | $ | 475 |  |  | $ | 635 |
(1) Leases that are on a month-to-month basis, short-term leases, and lease extensions that the Company does not expect to exercise are not included. (2) Related party lease payments exclude rent payments due under the DriveTime lease agreements for locations where the Company shares space with DriveTime, as those are variable lease payments contingent upon the Company's utilization of the leased assets. As of September 30, 2025 and December 31, 2024, none of the Company's lease agreements contain material residual value guarantees or material restrictive covenants. Lease Terms and Discount Rates The weighted-average remaining lease terms and discount rates as of September 30, 2025 and 2024 were as follows, excluding short-term operating leases:
| As of September 30,
| 2025 |  | 2024
Weighted-average remaining lease terms (years) |  |  |
Operating leases | 7.0 |  | 7.4
Finance leases | 2.7 |  | 2.8
Weighted-average discount rate |  |  |
Operating leases | 7.4 | % |  | 7.3 | %
Finance leases | 6.2 | % |  | 5.9 | %

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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