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AutoNation Finance Income (Loss) | 12 Months Ended
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Dec. 31, 2024
AutoNation Finance Income (Loss) [Abstract] |
AutoNation Finance Income (Loss) | AUTONATION FINANCE INCOME (LOSS) AutoNation Finance (“ANF”), our captive auto finance company, provides indirect financing to qualified retail customers on vehicles we sell. Prior to October 2023, ANF also purchased retail vehicle installment sales contracts through third-party dealers. ANF income (loss) includes the interest and fee income generated by auto loans receivable less the interest expense associated with the debt issued or used to fund these receivables, a provision for estimated credit losses on the auto loans receivable originated or acquired, direct expenses, and gains or losses on the sale of auto loans receivable. Interest income on auto loans receivable is recognized over the contractual term of the related loans. ANF income (loss) does not include amortization of intercompany discounts or intercompany dealer participation fees. Direct costs associated with loan originations are capitalized and amortized using the effective interest method. The following table presents the components of AutoNation Finance income (loss):
|  | 2024 |  | 2023 |  | 2022(1)
Interest margin: |  |  |  |  |  |
Interest and fee income |  | $ | 118.4 |  |  | $ | 84.0 |  |  | $ | 20.6 |
Interest expense |  | (39.8) |  |  | (20.8) |  |  | (4.7) |
Total interest margin |  | 78.6 |  |  | 63.2 |  |  | 15.9 |
Provision for credit losses |  | (57.5) |  |  | (45.9) |  |  | (44.0) |
Total interest margin after provision for loan losses |  | 21.1 |  |  | 17.3 |  |  | (28.1) |
Direct expenses(2) |  | (37.8) |  |  | (39.3) |  |  | (9.5) |
Gain on sale of auto loans receivable |  | 7.4 |  |  | 8.1 |  |  | — |
AutoNation Finance income (loss) |  | $ | (9.3) |  |  | $ | (13.9) |  |  | $ | (37.6) |
(1) Reflects activity that occurred after the acquisition of CIG Financial on October 1, 2022. Provision for credit losses includes initial credit loss expense of $34.2 million associated with the auto loans portfolio acquired as part of the acquisition.
(2) Direct expenses are comprised primarily of compensation expenses and loan administration costs incurred by our auto finance company.
During 2024, we sold loans with an aggregate amortized cost of $88.6 million, net of allowance for expected credit losses of $11.7 million, for cash proceeds of $96.0 million. During 2023, we sold loans with an aggregate amortized cost of $60.6 million, net of allowance for expected credit losses of $16.1 million, for cash proceeds of $68.7 million. We recorded a net pre-tax gain on the sale of auto loans receivable of $7.4 million and $8.1 million during 2024 and 2023, respectively. We have no continuing involvement in the sold loans as they were sold without recourse to us for their post-sale performance. We typically use non-recourse funding facilities, including warehouse facilities and asset-backed term funding transactions, as well as free cash flow from operations to fund the auto loans receivable of ANF. See Notes 6 and 11 of the Notes to Consolidated Financial Statements for more information about our auto loans receivable and related non-recourse debt, respectively.

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