KBRA Affirms and Upgrades Ratings from American Credit Acceptance Receivables Trusts

KBRA upgrades its rating on 12 classes of notes and affirms its ratings on 11 classes of notes issued from seven American Credit Acceptance Receivables Trust (“ACAR”) transactions. KBRA’s analysis indicated that existing credit enhancement for the notes is sufficient to support the revised and affirmed ratings. All of the securities with upgraded ratings experienced increased credit enhancement. The data used for this review is as of the March 2025 distribution date (February 2025 collection period). To date, the securities have received timely interest payments.

In performing its rating review, KBRA utilized its Auto Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology. In determining these rating actions, KBRA reviewed the collateral performance to date and projected the remaining loss for the transactions based on current assumptions. The rating actions, along with related deal and tranche performance information, are available in spreadsheet form in the accompanying American Credit Acceptance Receivables Trust Comprehensive Surveillance Dashboard. ACAR 2024-4 closed on October 18, 2024 and was not included in this review.

The loans supporting the ACAR transactions were originated by American Credit Acceptance, LLC (“ACA” or the “Company”). ACA is a subprime auto finance company that was established in 2007 with the purchase of Cornerstone from Sonic. ACA is majority-owned by George D. Johnson, Jr. and affiliated trusts (79.4% total ownership interest). The Company’s minority investors have a 14.2% ownership interest, while ACA management holds the remaining 6.4% ownership interest in the Company. The Company has issued 50 securitizations since 2011 for a total amount of approximately $15.5 billion

ACA is headquartered in Spartanburg, South Carolina, has approximately 1,425 employees (ACA domestic and near shore third-party service providers) and works with approximately 5,700 dealerships. It has a serviced loan portfolio of approximately $5.5 billion as of February 28, 2025. As of Q4 2024, the majority (93%) of the ACA’s assets under management (“AUM”) were originated via point of sale. The remaining AUM is comprised of lines of credit to auto dealers, not included in any current or future planned securitizations. Based on financials provided by the Company, ACA has been profitable since 2009. The Company generated positive net income for 2024, however this was lower than the comparative period in 2023 due to an increase in loan loss reserve provision.

ACA originates loans through two marketing platforms, “Tier 1” and “Tier 2”. Tier 1 program focuses on purchasing contracts from CarMax through an application sourcing arrangement that matches ACA’s target customers’ credit profile. The contracts are underwritten using ACA’s underwriting standards. Tier 2 program focuses on purchasing loans from franchised and independent auto dealers and motorcycle dealers.

The related transactions are listed further below with links to the appropriate page on kbra.com which show the applicable resulting ratings.

Click here to view the report.

For additional information regarding a specific transaction, see the list below to access ratings, reports, and disclosures: