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Finance Receivables and Obligations Collateralized by Finance Receivables | 6 Months Ended
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Jun. 30, 2025
Financing Receivable, after Allowance for Credit Loss, Current [Abstract] |
Finance Receivables and Obligations Collateralized by Finance Receivables | Finance Receivables and Obligations Collateralized by Finance Receivables AFC sells the majority of its U.S. dollar denominated finance receivables on a revolving basis and without recourse to a wholly-owned, bankruptcy remote, consolidated, special purpose subsidiary ("AFC Funding Corporation"), established for the purpose of purchasing AFC's finance receivables. A securitization agreement allows for the revolving sale by AFC Funding Corporation to a group of bank purchasers of undivided interests in certain finance receivables subject to committed liquidity. The agreement expires on January 31, 2028. AFC Funding Corporation had committed liquidity of $2.0 billion for U.S. finance receivables at June 30, 2025. We also have an agreement for the securitization of Automotive Finance Canada Inc.'s ("AFCI") receivables, which expires on January 31, 2028. AFCI's committed facility is provided through a third-party conduit (separate from the U.S. facility) and was C$375 million on June 30, 2025. In May 2025, AFCI entered into an Amendment No. 2 (the "Amendment No. 2") to the Receivables Purchase Agreement. The Amendment No. 2 increased AFCI's committed liquidity from C$300 million to C$375 million. We capitalized approximately $0.3 million of costs in connection with the Amendment No. 2. The receivables sold pursuant to both the U.S. and Canadian securitization agreements are accounted for as secured borrowings. The following tables present quantitative information about delinquencies, credit loss charge-offs less recoveries ("net credit losses") and components of securitized financial assets and other related assets managed. For purposes of this illustration, delinquent receivables are defined as receivables 31 days or more past due.
| June 30, 2025 |  | Net Credit Losses Three Months Ended June 30, 2025 |  | Net Credit Losses Six Months Ended June 30, 2025
| Total Amount of: |  |
(in millions) | Receivables |  | Receivables Delinquent |  |
Floorplan receivables | $ | 2,347.1 |  |  | $ | 7.4 |  |  | $ | 7.3 |  |  | $ | 15.6 |
Other loans | 0.3 |  |  | 0.3 |  |  | 3.0 |  |  | 3.0 |
Total receivables managed | $ | 2,347.4 |  |  | $ | 7.7 |  |  | $ | 10.3 |  |  | $ | 18.6 |
Accrued interest and fees | 27.4 |  |  |  |  |  |  |
Allowance for credit losses | (19.0) |  |  |  |  |  |  |
Finance receivables, net | $ | 2,355.8 |  |  |  |  |  |  |
| December 31, 2024 |  | Net Credit Losses Three Months Ended June 30, 2024 |  | Net Credit Losses Six Months Ended June 30, 2024
| Total Amount of: |  |
(in millions) | Receivables |  | Receivables Delinquent |  |
Floorplan receivables | $ | 2,310.5 |  |  | $ | 14.5 |  |  | $ | 14.0 |  |  | $ | 29.5 |
Other loans | 3.5 |  |  | 3.5 |  |  | — |  |  | — |
Total receivables managed | $ | 2,314.0 |  |  | $ | 18.0 |  |  | $ | 14.0 |  |  | $ | 29.5 |
Accrued interest and fees | 28.5 |  |  |  |  |  |  |
Allowance for credit losses | (19.8) |  |  |  |  |  |  |
Finance receivables, net | $ | 2,322.7 |  |  |  |  |  |  |
The following is a summary of the changes in the allowance for credit losses related to finance receivables (in millions):
| June 30, 2025 |  | June 30, 2024
Allowance for Credit Losses |  |  |
Balance at December 31 | $ | 19.8 |  |  | $ | 23.0 |
Provision for credit losses | 17.5 |  |  | 25.6 |
Recoveries | 4.4 |  |  | 3.4 |
Less charge-offs | (23.0) |  |  | (32.9) |
Other | 0.3 |  |  | (0.1) |
Balance at end of period | $ | 19.0 |  |  | $ | 19.0 |
As of June 30, 2025 and December 31, 2024, $2,343.7 million and $2,335.1 million, respectively, of finance receivables (inclusive of accrued interest and fees) and a cash reserve of 1 or 3 percent of the obligations collateralized by finance receivables served as security for the obligations collateralized by finance receivables. The amount of the cash reserve depends on circumstances which are set forth in the securitization agreements. Obligations collateralized by finance receivables consisted of the following:
| June 30, 2025 |  | December 31, 2024
Obligations collateralized by finance receivables, gross | $ | 1,740.9 |  |  | $ | 1,679.1 |
Unamortized securitization issuance costs | (16.1) |  |  | (18.8) |
Obligations collateralized by finance receivables | $ | 1,724.8 |  |  | $ | 1,660.3 |
Proceeds from the revolving sale of receivables to the bank facilities are used to fund new loans to customers. AFC, AFC Funding Corporation and AFCI must maintain certain financial covenants including, among others, limits on the amount of debt AFC and AFCI can incur, minimum levels of tangible net worth, and other covenants tied to the performance of the finance receivables portfolio. The securitization agreements also incorporate the financial covenants of our Credit Agreement. At June 30, 2025, we were in compliance with the covenants in the securitization agreements.

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- Definition The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 210 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.6-04(11)) -Publisher 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