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AutoNation Finance Income (Loss) | 3 Months Ended
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Mar. 31, 2025
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, and direct expenses. 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):
| Three Months Ended March 31,
| 2025 |  | 2024
Interest margin: |  |  |
Interest and fee income | $ | 41.9 |  |  | $ | 21.8 |
Interest expense | (13.9) |  |  | (7.0) |
Total interest margin | 28.0 |  |  | 14.8 |
Provision for credit losses | (18.9) |  |  | (10.2) |
Total interest margin after provision for loan losses | 9.1 |  |  | 4.6 |
Direct expenses(1) | (9.0) |  |  | (9.6) |
AutoNation Finance income (loss) | $ | 0.1 |  |  | $ | (5.0) |
(1) Direct expenses are comprised primarily of compensation expenses and loan administration costs incurred by our auto finance company.
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 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for more information about our auto loans receivable and related non-recourse debt, respectively.

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