Finance Receivable Sale Agreements |
12 Months Ended |
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Dec. 31, 2022 | |
| Transfers and Servicing [Abstract] | |
| Finance Receivable Sale Agreements | NOTE 8 — FINANCE RECEIVABLE SALE AGREEMENTS The Company originates loans for its customers and sells them to partners and investors pursuant to finance receivable sale agreements. Historically, the Company has sold loans through two types of arrangements: forward flow agreements, including a master purchase and sale agreement and master transfer agreements, and fixed pool loan sales, including securitization transactions. Master Purchase and Sale Agreement In December 2016, the Company entered into a master purchase and sale agreement (the "Master Purchase and Sale Agreement" or "MPSA") with Ally Bank and Ally Financial Inc. (collectively the "Ally Parties"). Pursuant to the MPSA, the Company sells finance receivables meeting certain underwriting criteria under a committed forward flow arrangement without recourse to the Company for their post-sale performance. Throughout 2021 and 2022, the Company and the Ally Parties have amended the MPSA to, among other things and subject to the terms of the agreement, broaden the set of finance receivables covered by the MPSA and provide additional flexibility in the timing of sales of finance receivables. In March 2021, the Ally Parties committed to purchase up to a maximum of $4.0 billion of principal balances of finance receivables through March 2022. On each of March 17, 2022 and March 22, 2022, the Company and the Ally Parties amended the MPSA to extend the scheduled commitment termination date to March 21, 2023 and increase the Ally Parties' commitment to purchase automotive finance receivables to $5.0 billion. In addition, on November 1, 2022, January 13, 2023, and January 20, 2023, the Company and the Ally Parties further amended the MPSA to, in aggregate, consolidate and reflect the several previously executed amendments to the MPSA facility and streamline the funding mechanics associated with the sale of finance receivables to the Ally Parties, extend the scheduled commitment termination date to January 12, 2024, and establish a commitment on the part of the Ally Parties to purchase up to a maximum of $4.0 billion of principal balances of finance receivables between January 13, 2023 and the scheduled commitment termination date. During the years ended December 31, 2022, 2021, and 2020, the Company sold approximately $3.8 billion, $2.1 billion, and $2.2 billion, respectively, in principal balances of finance receivables under the MPSA and had approximately $1.2 billion of unused capacity as of December 31, 2022. Securitization Transactions The Company sponsors and establishes securitization trusts to purchase finance receivables from the Company. The securitization trusts issue asset-backed securities, some of which are collateralized by the finance receivables that the Company sells to the securitization trusts. Upon sale of the finance receivables to the securitization trusts, the Company recognizes a gain or loss on sales of finance receivables. The net proceeds from the sales are the fair value of the assets obtained as part of the transactions and typically include cash and at least 5% of the beneficial interests issued by the securitization trusts to comply with the Risk Retention Rules, as further discussed in Note 9 — Securitizations and Variable Interest Entities. During the years ended December 31, 2022, 2021 and 2020, the Company sold approximately $2.4 billion, $5.0 billion and $900 million, respectively, in principal balances of finance receivables through securitization transactions. Fixed Pool Loan Sales In 2020, the Company further expanded its finance platform by completing fixed pool loan sales to a new financing partner on terms substantially similar to the Company’s securitization transactions and MPSA sales, including a sale of approximately $320 million in principal balances of finance receivables in December 2020. There were no such transactions during 2021 or 2022. Gain on Loan Sales The total gain related to finance receivables sold to financing partners and pursuant to securitization transactions was $411 million, $718 million, and $218 million during the years ended December 31, 2022, 2021, and 2020, respectively, which is included in other sales and revenues in the accompanying consolidated statements of operations.
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