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Auto Loans Held for Investment | 9 Months Ended
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Nov. 30, 2025
Receivables [Abstract] |
Auto Loan Receivables | Auto Loans Held for Investment Auto loans held for investment include amounts due from customers related to retail vehicle sales financed through CAF and are presented net of an allowance for estimated loan losses. These auto loans represent a large group of smaller-balance homogeneous loans, which we consider to be part of one class of financing receivable and one portfolio segment for purposes of determining our allowance for loan losses. We generally use warehouse facilities to fund auto loans held for investment originated by CAF until we elect to fund them through an asset-backed term funding transaction, such as a term securitization or alternative funding arrangement. We recognize transfers of auto loans held for investment into the warehouse facilities and asset-backed term funding transactions (together, “non-recourse funding vehicles”) as secured borrowings, which result in recording the auto loans held for investment and the related non-recourse notes payable on our consolidated balance sheets. The majority of the auto loans held for investment serve as collateral for the related non-recourse notes payable of $15.97 billion as of November 30, 2025, and $17.12 billion as of February 28, 2025. See Note 9 for additional information on securitizations and non-recourse notes payable. Interest income and expenses related to auto loans held for investment are included in CAF income. Interest income on auto loans held for investment is recognized when earned based on contractual loan terms. All loans continue to accrue interest until repayment or charge-off. When a charge-off occurs, accrued interest is written off by reversing interest income. Due to the timely write-off of accrued interest, we have made the election to exclude accrued interest from our allowance for loan losses. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred. See Note 3 for additional information on CAF income. Auto Loans Held for Investment, Net
| As of November 30 |  | As of February 28
(In millions) | 2025 |  | 2025
Auto loans held for investment | $ | 16,533.8 |  |  | $ | 17,594.6 |
Accrued interest and fees | 100.5 |  |  | 96.1 |
Other | (8.3) |  |  | 10.8 |
Less: allowance for loan losses | (474.8) |  |  | (458.7) |
Auto loans held for investment, net | $ | 16,151.2 |  |  | $ | 17,242.8 |
Credit Quality. When customers apply for financing, CAF’s proprietary scoring models utilize the customers’ credit history and certain application information to evaluate and rank their risk. We obtain credit histories and other credit data that includes information such as number, age, type of and payment history for prior or existing credit accounts. The application information that is used includes income, collateral value and down payment. The scoring models yield credit grades that represent the relative likelihood of repayment. Customers with the highest probability of repayment are A-grade customers. Customers assigned a lower grade are determined to have a lower probability of repayment. For loans that are approved, the credit grade influences the terms of the agreement, such as the required loan-to-value ratio and interest rate. After origination, credit grades are generally not updated. CAF uses a combination of the initial credit grades and historical performance to monitor the credit quality of the auto loans held for investment on an ongoing basis. We validate the accuracy of the scoring models periodically. Loan performance is reviewed on a recurring basis to identify whether the assigned grades adequately reflect the customers’ likelihood of repayment. Auto Loans Held for Investment by Major Credit Grade
| As of November 30, 2025
| Fiscal Year of Origination (1) |  |  |  |
(In millions) | 2026 |  | 2025 |  | 2024 |  | 2023 |  | 2022 |  | Prior to 2022 |  | Total |  | % (2)
Tier 1: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
A | $ | 3,138.1 |  |  | $ | 3,035.6 |  |  | $ | 1,805.9 |  |  | $ | 1,059.6 |  |  | $ | 465.3 |  |  | $ | 78.0 |  |  | $ | 9,582.5 |  |  | 58.0 |
B | 1,269.8 |  |  | 1,350.8 |  |  | 1,201.7 |  |  | 792.8 |  |  | 433.8 |  |  | 98.9 |  |  | 5,147.8 |  |  | 31.1 |
C and other | 352.9 |  |  | 266.9 |  |  | 201.3 |  |  | 218.0 |  |  | 142.7 |  |  | 53.8 |  |  | 1,235.6 |  |  | 7.5 |
Total Tier 1 | 4,760.8 |  |  | 4,653.3 |  |  | 3,208.9 |  |  | 2,070.4 |  |  | 1,041.8 |  |  | 230.7 |  |  | 15,965.9 |  |  | 96.6 |
Tier 2 and Tier 3: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C and other | 153.5 |  |  | 190.2 |  |  | 121.6 |  |  | 71.4 |  |  | 26.7 |  |  | 4.5 |  |  | 567.9 |  |  | 3.4 |
Total auto loans held for investment | $ | 4,914.3 |  |  | $ | 4,843.5 |  |  | $ | 3,330.5 |  |  | $ | 2,141.8 |  |  | $ | 1,068.5 |  |  | $ | 235.2 |  |  | $ | 16,533.8 |  |  | 100.0 |
Gross charge-offs | $ | 19.0 |  |  | $ | 116.8 |  |  | $ | 141.9 |  |  | $ | 120.3 |  |  | $ | 61.3 |  |  | $ | 20.9 |  |  | $ | 480.2 |  |  |
| As of February 28, 2025
| Fiscal Year of Origination (1) |  |  |  |
(In millions) | 2025 |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | Prior to 2021 |  | Total |  | % (2)
Tier 1: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
A | $ | 4,132.0 |  |  | $ | 2,607.9 |  |  | $ | 1,673.9 |  |  | $ | 894.1 |  |  | $ | 243.9 |  |  | $ | 48.9 |  |  | $ | 9,600.7 |  |  | 54.5 |
B | 2,041.1 |  |  | 1,664.0 |  |  | 1,163.0 |  |  | 746.4 |  |  | 244.9 |  |  | 69.7 |  |  | 5,929.1 |  |  | 33.7 |
C and other | 422.1 |  |  | 277.0 |  |  | 324.5 |  |  | 242.5 |  |  | 99.4 |  |  | 35.0 |  |  | 1,400.5 |  |  | 8.0 |
Total Tier 1 | 6,595.2 |  |  | 4,548.9 |  |  | 3,161.4 |  |  | 1,883.0 |  |  | 588.2 |  |  | 153.6 |  |  | 16,930.3 |  |  | 96.2 |
Tier 2 and Tier 3: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C and other | 311.9 |  |  | 177.1 |  |  | 116.9 |  |  | 46.3 |  |  | 5.4 |  |  | 6.7 |  |  | 664.3 |  |  | 3.8 |
Total auto loans held for investment | $ | 6,907.1 |  |  | $ | 4,726.0 |  |  | $ | 3,278.3 |  |  | $ | 1,929.3 |  |  | $ | 593.6 |  |  | $ | 160.3 |  |  | $ | 17,594.6 |  |  | 100.0 |
Gross charge-offs | $ | 44.7 |  |  | $ | 193.2 |  |  | $ | 196.2 |  |  | $ | 107.2 |  |  | $ | 30.3 |  |  | $ | 17.6 |  |  | $ | 589.2 |  |  |
(1) Classified based on credit grade assigned when customers were initially approved for financing. (2) Percent of total auto loans held for investment. Allowance for Loan Losses. The allowance for loan losses at November 30, 2025 represents the net credit losses expected over the remaining contractual life of our auto loans held for investment. The allowance for loan losses is determined using a net loss timing curve method (“method”), primarily based on the composition of the portfolio of auto loans held for investment and historical gross loss and recovery trends. Due to the fact that losses for loans with less than 18 months of performance history can be volatile, our net loss estimate weights both historical losses by credit grade at origination and actual loss data on the loans to-date, along with forward loss curves, in estimating future performance. Once the loans have 18 months of performance history, the net loss estimate reflects actual loss experience of those loans to-date, along with forward loss curves, to predict future performance. The forward loss curves are constructed using historical performance data and show the average timing of losses over the course of a loan’s life. The net loss estimate is calculated by applying the loss rates developed using the methods described above to the amortized cost basis of the auto loans held for investment at inception of the loan. The output of the method is adjusted to take into account reasonable and supportable forecasts about the future. Specifically, the change in U.S. unemployment rates and the National Automobile Dealers Association used vehicle price index are used to predict changes in gross loss and recovery rates, respectively. An economic adjustment factor, based upon a single macroeconomic scenario, is developed to capture the relationship between changes in these forecasts and changes in gross loss and recovery rates. This factor is applied to the output of the method for the reasonable and supportable forecast period of two years. After the end of this two-year period, we revert to historical experience on a straight-line basis over a period of 12 months. We periodically consider whether the use of alternative metrics would result in improved model performance and revise the models when appropriate. We also consider whether qualitative adjustments are necessary for factors that are not reflected in the quantitative methods but impact the measurement of estimated credit losses. Such adjustments include the uncertainty of the impacts of recent economic trends on customer behavior. The change in the allowance for loan losses is recognized through an adjustment to the provision for loan losses. Allowance for Loan Losses
| Three Months Ended November 30, 2025
(In millions) | Tier 1 |  | Tier 2 & Tier 3 |  | Total |  | % (1)
Balance as of beginning of period | $ | 423.2 |  |  | $ | 84.1 |  |  | $ | 507.3 |  |  | 3.02 |
Charge-offs | (145.5) |  |  | (24.3) |  |  | (169.8) |  |  |
Recoveries (3) | 55.2 |  |  | 8.7 |  |  | 63.9 |  |  |
Provision for loan losses (4) | 62.0 |  |  | 11.4 |  |  | 73.4 |  |  |
Balance as of end of period | $ | 394.9 |  |  | $ | 79.9 |  |  | $ | 474.8 |  |  | 2.87 |
| Three Months Ended November 30, 2024
(In millions) | Tier 1 |  | Tier 2 & Tier 3 |  | Total |  | % (1)
Balance as of beginning of period | $ | 417.3 |  |  | $ | 83.5 |  |  | $ | 500.8 |  |  | 2.82 |
Charge-offs | (129.0) |  |  | (21.2) |  |  | (150.2) |  |  |
Recoveries (3) | 48.7 |  |  | 7.0 |  |  | 55.7 |  |  |
Provision for loan losses | 61.7 |  |  | 10.9 |  |  | 72.6 |  |  |
Balance as of end of period | $ | 398.7 |  |  | $ | 80.2 |  |  | $ | 478.9 |  |  | 2.70 |
| Nine Months Ended November 30, 2025
(In millions) | Tier 1 |  | Tier 2 & Tier 3 |  | Total |  | % (1)
Balance as of beginning of period | $ | 378.1 |  |  | $ | 80.6 |  |  | $ | 458.7 |  |  | 2.61 |
Transfer of auto loans to held for sale (2) (5) | (30.3) |  |  | (11.9) |  |  | (42.2) |  |  |
Charge-offs | (407.0) |  |  | (73.2) |  |  | (480.2) |  |  |
Recoveries (3) | 155.4 |  |  | 23.6 |  |  | 179.0 |  |  |
Provision for loan losses (4) (5) | 298.7 |  |  | 60.8 |  |  | 359.5 |  |  |
Balance as of end of period | $ | 394.9 |  |  | $ | 79.9 |  |  | $ | 474.8 |  |  | 2.87 |
| Nine Months Ended November 30, 2024
(In millions) | Tier 1 |  | Tier 2 & Tier 3 |  | Total |  | % (1)
Balance as of beginning of period | $ | 389.7 |  |  | $ | 93.1 |  |  | $ | 482.8 |  |  | 2.78 |
Charge-offs | (373.1) |  |  | (74.0) |  |  | (447.1) |  |  |
Recoveries (3) | 154.7 |  |  | 22.1 |  |  | 176.8 |  |  |
Provision for loan losses | 227.4 |  |  | 39.0 |  |  | 266.4 |  |  |
Balance as of end of period | $ | 398.7 |  |  | $ | 80.2 |  |  | $ | 478.9 |  |  | 2.70 |
(1) Percent of total auto loans held for investment. (2) Represents release of allowance previously recognized on auto loans held for sale. (3) Net of costs incurred to recover vehicle. (4) Represents the provision for loan losses on auto loans held for investment. (5) Combined total amount of $317.3 million represents the net provision for loan losses recognized as part of CAF income for the nine months ended November 30, 2025. During the first nine months of fiscal 2026, the allowance for loan losses as a percent of total auto loans held for investment increased by 26 basis points. The increase was primarily driven by unfavorable loan loss performance, particularly within loans originated in 2022 and 2023, when average selling prices were elevated and these customers were later challenged by the inflationary environment. This impact was partially offset by the release of the allowance previously recognized on auto loans held for sale. The allowance for loan losses as of November 30, 2025 reflects our best estimate of expected future losses based on recent trends in delinquencies, loss performance, recovery rates and the economic environment. Past Due Loans. An account is considered delinquent when the related customer fails to make a substantial portion of a scheduled payment on or before the due date. In general, accounts are charged-off on the last business day of the month during which the earliest of the following occurs: the loan is 120 days or more delinquent as of the last business day of the month, the related vehicle is repossessed and liquidated, or the loan is otherwise deemed uncollectable. For purposes of determining impairment, auto loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment. Past Due Loans
| As of November 30, 2025
| Tier 1 |  | Tier 2 & Tier 3 |  | Total
(In millions) | A |  | B |  | C & Other |  | Total |  | C & Other |  | $ |  | % (1)
Current | $ | 9,522.5 |  |  | $ | 4,679.7 |  |  | $ | 989.8 |  |  | $ | 15,192.0 |  |  | $ | 443.5 |  |  | $ | 15,635.5 |  |  | 94.57 |
Delinquent loans: |  |  |  |  |  |  |  |  |  |  |  |  |
31-60 days past due | 36.7 |  |  | 271.6 |  |  | 128.9 |  |  | 437.2 |  |  | 63.2 |  |  | 500.4 |  |  | 3.03 |
61-90 days past due | 17.8 |  |  | 160.8 |  |  | 98.3 |  |  | 276.9 |  |  | 51.5 |  |  | 328.4 |  |  | 1.99 |
Greater than 90 days past due | 5.5 |  |  | 35.7 |  |  | 18.6 |  |  | 59.8 |  |  | 9.7 |  |  | 69.5 |  |  | 0.41 |
Total past due | 60.0 |  |  | 468.1 |  |  | 245.8 |  |  | 773.9 |  |  | 124.4 |  |  | 898.3 |  |  | 5.43 |
Total auto loans held for investment | $ | 9,582.5 |  |  | $ | 5,147.8 |  |  | $ | 1,235.6 |  |  | $ | 15,965.9 |  |  | $ | 567.9 |  |  | $ | 16,533.8 |  |  | 100.00 |
| As of February 28, 2025
| Tier 1 |  | Tier 2 & Tier 3 |  | Total
(In millions) | A |  | B |  | C & Other |  | Total |  | C & Other |  | $ |  | % (1)
Current | $ | 9,543.3 |  |  | $ | 5,491.5 |  |  | $ | 1,164.7 |  |  | $ | 16,199.5 |  |  | $ | 541.2 |  |  | $ | 16,740.7 |  |  | 95.15 |
Delinquent loans: |  |  |  |  |  |  |  |  |  |  |  |  |
31-60 days past due | 36.7 |  |  | 276.0 |  |  | 139.3 |  |  | 452.0 |  |  | 71.9 |  |  | 523.9 |  |  | 2.98 |
61-90 days past due | 14.8 |  |  | 127.3 |  |  | 79.6 |  |  | 221.7 |  |  | 41.2 |  |  | 262.9 |  |  | 1.49 |
Greater than 90 days past due | 5.9 |  |  | 34.3 |  |  | 16.9 |  |  | 57.1 |  |  | 10.0 |  |  | 67.1 |  |  | 0.38 |
Total past due | 57.4 |  |  | 437.6 |  |  | 235.8 |  |  | 730.8 |  |  | 123.1 |  |  | 853.9 |  |  | 4.85 |
Total auto loans held for investment | $ | 9,600.7 |  |  | $ | 5,929.1 |  |  | $ | 1,400.5 |  |  | $ | 16,930.3 |  |  | $ | 664.3 |  |  | $ | 17,594.6 |  |  | 100.00 |
(1) Percent of total auto loans held for investment.

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