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Finance Receivables and Obligations Collateralized by Finance Receivables
 9 Months Ended
Sep. 30, 2026
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, 2030. AFC Funding Corporation had committed liquidity of $2.0 billion for U.S. finance receivables at September 30, 2026.
In September 2026, AFC and AFC Funding Corporation entered into a Second Amendment (the "2026 Second Amendment") to the Tenth Amended and Restated Receivables Purchase Agreement. The 2026 Second Amendment provides for, among other things, an extension of the facility's maturity date from January 31, 2028 to January 31, 2030. We capitalized approximately $10.7 million of costs in connection with the 2026 Second Amendment. In addition, we recorded a $0.7 million pretax charge resulting from the write-off of a portion of the unamortized securitization issuance costs, which was recorded as "Loss on extinguishment of debt" in the consolidated statements of income.
We also have an agreement for the securitization of Automotive Finance Canada Inc.'s ("AFCI") receivables, which expires on January 31, 2030. AFCI's committed facility is provided through a third-party conduit (separate from the U.S. facility) and was C$500 million at September 30, 2026. In September 2026, AFCI entered into Amendment No. 4 (the "Amendment No. 4") to the Receivables Purchase Agreement. The Amendment No. 4 provides for, among other things, an extension of the facility's maturity date from January 31, 2028 to January 31, 2030. We capitalized approximately $1.8 million of costs in connection with the Amendment No. 4. 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.
September 30, 2026
Net Credit Losses
Three Months Ended September 30, 2026
Net Credit Losses
Nine Months Ended September 30, 2026
Total Amount of:
(in millions)ReceivablesReceivables
Delinquent
Floorplan receivables$2,763.5 $15.9 $7.7 $22.3 
Other loans— — — — 
Total receivables managed$2,763.5 $15.9 $7.7 $22.3 
Accrued interest and fees30.3 
Allowance for credit losses(30.0)
Finance receivables, net$2,763.8 

December 31, 2025
Net Credit Losses
Three Months Ended September 30, 2025
Net Credit Losses
Nine Months Ended September 30, 2025
Total Amount of:
(in millions)ReceivablesReceivables
Delinquent
Floorplan receivables$2,423.5 $9.3 $5.5 $21.1 
Other loans— — — 3.0 
Total receivables managed$2,423.5 $9.3 $5.5 $24.1 
Accrued interest and fees29.4 
Allowance for credit losses(27.5)
Finance receivables, net$2,425.4 
The following is a summary of the changes in the allowance for credit losses related to finance receivables (in millions):
September 30,
2026		September 30,
2025
Allowance for Credit Losses
Balance at December 31$27.5 $19.8 
Provision for credit losses24.9 27.2 
Recoveries6.6 6.0 
Less charge-offs(28.9)(30.1)
Other(0.1)0.1 
Balance at end of period$30.0 $23.0 
As of September 30, 2026 and December 31, 2025, finance receivables (inclusive of accrued interest and fees) totaling $2,786.7 million and $2,448.2 million, respectively, served as security for the obligations collateralized by finance receivables. In addition, a cash reserve of 1 or 3 percent of the obligations collateralized by finance receivables was also maintained as security. The amount of the cash reserve depends on circumstances which are set forth in the securitization agreements. The amount above for December 31, 2025, reflects the correction of an error from the $2,803.5 million previously disclosed in the 2025 Form 10-K. Obligations collateralized by finance receivables consisted of the following (in millions):
September 30,
2026		December 31,
2025
Obligations collateralized by finance receivables, gross$2,084.4 $1,771.7 
Unamortized securitization issuance costs(20.3)(13.4)
Obligations collateralized by finance receivables$2,064.1 $1,758.3 
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 September 30, 2026, we were in compliance with the covenants in the securitization agreements.