Credit Acceptance auto loan volume rises 23 percent in April and May

Credit Acceptance writes more loans in April & May

SOUTHFIELD, Mich. — Auto loan provider Credit Acceptance Corp. said Friday its loan volume rose in April and May and the loans were bigger than last year — a sign that tight credit conditions are easing and that more consumers are feeling comfortable about taking on debt to make a large purchase.

The company said consumer loan volume rose 23 percent, to 21.7 million loans, from 17.7 million in the same two months last year. Dollar volume jumped 39 percent to $316.8 million, from $228.1 million last year.

The company added 104 auto dealers to its network over the year, to 2,203.

Consumer loan collection improved by 1.8 percent over the two months, with 75.2 percent of loans expected to be collected. That was better than the 1.5 percent improvement the company previously expected, but below last year’s rate of 77.1 percent collection.

Credit Acceptance also said it reached an agreement earlier this month with the Internal Revenue Service to pay $7 million in federal and state taxes for the years 2004 through 2008. The company expects to book a gain of $6.7 million to its second-quarter earnings, because the amount paid was smaller than amounts previously recorded.

The company also said it has started a tender offer to buy back up to four million of its shares at $50 each, a 6 percent premium over Thursday’s closing price of $47.29.

In morning trading, Credit Acceptance Corp. shares rose $1.20, or 2.5 percent, to $48.49.