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Fair Value Disclosures
 6 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value Disclosures

Note 9. Fair Value Disclosures

The Company’s financial instruments consist of cash, finance receivables, repossessed assets, the line of credit, and the note payable. Each of these financial instruments are not carried at fair value.

Finance receivables, net, approximates fair value based on the price paid to acquire Contracts. The price paid reflects competitive market interest rates and purchase discounts for the Company’s chosen credit grade in the economic environment. This market is highly liquid as the Company acquires individual loans on a daily basis from dealers.

The initial terms of the Contracts generally range from 12 to 72 months. Beginning in December 2017, the maximum initial term of a Contract was reduced to 60 months. The initial terms of the Direct Loans generally range from 12 to 60 months. If liquidated outside of the normal course of business, the amount received may not be the carrying value.

Repossessed assets are valued at the lower of the finance receivable balance prior to repossession or the estimated net realizable value of the repossessed asset. The Company estimates the net realizable value using estimated auction wholesale proceeds less costs to sell plus insurance claims outstanding, if any.

 

Based on these market conditions, the fair value of the Line of credit as of September 30, 2022 was estimated to be equal to the book value. The interest rate for the Credit line is a variable rate based on SOFR pricing options.

 

 

 

(In thousands)

 

 

 

Fair Value Measurement Using

 

 

 

 

 

 

 

Description

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair
Value

 

 

Carrying
Value

 

Cash and restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

$

1,503

 

 

$

-

 

 

$

-

 

 

$

1,503

 

 

$

1,503

 

March 31, 2022

 

$

4,775

 

 

$

-

 

 

$

-

 

 

$

4,775

 

 

$

4,775

 

Finance receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

$

-

 

 

$

-

 

 

$

161,696

 

 

$

161,696

 

 

$

161,696

 

March 31, 2022

 

$

-

 

 

$

-

 

 

$

168,600

 

 

$

168,600

 

 

$

168,600

 

Repossessed assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

$

-

 

 

$

-

 

 

$

1,208

 

 

$

1,208

 

 

$

1,208

 

March 31, 2022

 

$

-

 

 

$

-

 

 

$

658

 

 

$

658

 

 

$

658

 

Credit facility:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

$

-

 

 

$

-

 

 

$

59,500

 

 

$

59,500

 

 

$

59,500

 

March 31, 2022

 

$

-

 

 

$

-

 

 

$

55,000

 

 

$

55,000

 

 

$

55,000

 

Note Payable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

March 31, 2022

 

$

3,244

 

 

$

-

 

 

$

-

 

 

$

3,244

 

 

$

3,244

 

 

The Company may be required, from time to time, to measure certain assets and liabilities at fair value on a nonrecurring basis. There were none at September 30, 2022 and March 31, 2022 and there were no nonrecurring fair value measurements during the three and six months ended September 30, 2022 and 2021.

 

Level 2 assets are financial assets and liabilities that do not have regular market pricing, but whose fair value can be determined based on other data values or market pricing.

 

At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. Management has determined that this level to be most appropriate for the Line of credit.