FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Sep. 30, 2025

FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

Ford Credit manages finance receivables as “consumer” and “non-consumer” portfolios. The receivables are generally secured by the vehicles, inventory, or other property being financed.

Finance receivables are recorded at the time of origination or purchase at fair value and are subsequently reported at amortized cost, net of any allowance for credit losses.

For all finance receivables, Ford Credit defines “past due” as any payment, including principal and interest, that is at least 31 days past the contractual due date.

Ford Credit finance receivables, net were as follows (in millions):


	December 31, 2024		September 30, 2025
Consumer
Retail installment contracts, gross	$	79,459	$	78,884
Finance leases, gross	8,357		9,287
Retail financing, gross	87,816		88,171
Unearned interest supplements	(4,598)		(4,333)
Consumer finance receivables	83,218		83,838
Non-Consumer
Dealer financing	29,282		25,420
Non-Consumer finance receivables	29,282		25,420
Total recorded investment	$	112,500	$	109,258

Recorded investment in finance receivables	$	112,500	$	109,258
Allowance for credit losses	(864)		(897)
Total finance receivables, net	$	111,636	$	108,361

Current portion	$	51,850	$	48,214
Non-current portion	59,786		60,147
Total finance receivables, net	$	111,636	$	108,361

Net finance receivables subject to fair value (a)	$	103,755	$	99,610
Fair value (b)	103,231		100,501

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(a)Net finance receivables subject to fair value exclude finance leases.

(b)The fair value of finance receivables is categorized within Level 3 of the fair value hierarchy.

Ford Credit’s finance leases are comprised of sales-type and direct financing leases. Financing revenue from finance leases for the third quarter of 2024 and 2025 was $137 million and $146 million, respectively, and for the first nine months of 2024 and 2025 was $376 million and $431 million, respectively, and is included in Ford Credit revenues on our consolidated income statements.

At December 31, 2024 and September 30, 2025, accrued interest was $335 million and $288 million, respectively, which we report in Other assets in the current assets section of our consolidated balance sheets.

Included in the recorded investment in finance receivables at December 31, 2024 and September 30, 2025 were consumer receivables of $47.6 billion and $46.2 billion, respectively, and non-consumer receivables of $24.4 billion and $22.8 billion, respectively, (including Ford Blue, Ford Model e, and Ford Pro receivables sold to Ford Credit, which we report in Trade and other receivables) that have been sold for legal purposes in securitization transactions but continue to be reported in our consolidated financial statements. The receivables are available only for payment of the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions; they are not available to pay the other obligations or the claims of Ford Credit’s other creditors. Ford Credit holds the right to receive the excess cash flows not needed to pay the debt issued by, and other obligations of, the securitization entities that are parties to those securitization transactions.

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Credit Quality

Consumer Portfolio. Credit quality ratings for consumer receivables are based on aging. Receivables over 60 days past due are in intensified collection status.

The credit quality analysis of consumer receivables at December 31, 2024 and gross charge-offs during the year ended December 31, 2024 were as follows (in millions):


	Amortized Cost Basis by Origination Year
	Prior to 2020		2020		2021		2022		2023		2024		Total		Percent
Consumer
31 - 60 days past due	$	43	$	93	$	104	$	187	$	242	$	203	$	872	1.0	%
Greater than 60 days past due	15		27		35		57		82		59		275		0.4
Total past due	58		120		139		244		324		262		1,147		1.4
Current	788		3,162		5,458		12,275		24,153		36,235		82,071		98.6
Total	$	846	$	3,282	$	5,597	$	12,519	$	24,477	$	36,497	$	83,218	100.0	%

Gross charge-offs	$	46	$	58	$	71	$	152	$	191	$	50	$	568

The credit quality analysis of consumer receivables at September 30, 2025 and gross charge-offs during the first nine months of 2025 were as follows (in millions):


	Amortized Cost Basis by Origination Year
	Prior to 2021		2021		2022		2023		2024		2025		Total		Percent
Consumer
31 - 60 days past due	$	67	$	67	$	136	$	201	$	237	$	95	$	803	1.0	%
Greater than 60 days past due	23		25		48		67		77		41		281		0.3
Total past due	90		92		184		268		314		136		1,084		1.3
Current	1,629		2,880		7,632		17,410		29,372		23,831		82,754		98.7
Total	$	1,719	$	2,972	$	7,816	$	17,678	$	29,686	$	23,967	$	83,838	100.0	%

Gross charge-offs	$	44	$	43	$	96	$	142	$	148	$	17	$	490

Non-Consumer Portfolio. The credit quality of dealer financing receivables is evaluated based on Ford Credit’s internal dealer risk rating analysis. Ford Credit uses a proprietary model to assign each dealer a risk rating. This model uses historical dealer performance data to identify key factors about a dealer that are considered most significant in predicting a dealer’s ability to meet its financial obligations. Ford Credit also considers numerous other financial and qualitative factors of the dealer’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with Ford Credit and other creditors.

Dealers are assigned to one of four groups according to risk ratings as follows:

•Group I – strong to superior financial metrics;

•Group II – fair to favorable financial metrics;

•Group III – marginal to weak financial metrics; and

•Group IV – poor financial metrics, including dealers classified as uncollectible.

Ford Credit generally suspends credit lines and extends no further funding to dealers classified in Group IV.

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

The credit quality analysis of dealer financing receivables at December 31, 2024 and gross charge-offs during the year ended December 31, 2024 were as follows (in millions):


	Amortized Cost Basis by Origination Year														Wholesale Loans
	Dealer Loans
	Prior to 2020		2020		2021		2022		2023		2024		Total				Total		Percent
Group I	$	270	$	63	$	97	$	47	$	217	$	245	$	939	$	25,257	$	26,196	89.4	%
Group II	13		—		3		1		28		31		76		2,494		2,570		8.8
Group III	—		—		2		—		1		4		7		462		469		1.6
Group IV	—		—		—		—		—		1		1		46		47		0.2
Total (a)	$	283	$	63	$	102	$	48	$	246	$	281	$	1,023	$	28,259	$	29,282	100.0	%

Gross charge-offs	$	1	$	—	$	—	$	—	$	—	$	—	$	1	$	6	$	7

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(a)Total past due dealer financing receivables at December 31, 2024 were $8 million.

The credit quality analysis of dealer financing receivables at September 30, 2025 and gross charge-offs during the first nine months of 2025 were as follows (in millions):


	Amortized Cost Basis by Origination Year														Wholesale Loans
	Dealer Loans
	Prior to 2021		2021		2022		2023		2024		2025		Total				Total		Percent
Group I	$	295	$	70	$	33	$	171	$	82	$	169	$	820	$	20,352	$	21,172	83.3	%
Group II	26		8		3		34		47		34		152		3,519		3,671		14.4
Group III	—		—		—		1		1		5		7		526		533		2.1
Group IV	—		—		—		—		1		5		6		38		44		0.2
Total (a)	$	321	$	78	$	36	$	206	$	131	$	213	$	985	$	24,435	$	25,420	100.0	%

Gross charge-offs	$	—	$	—	$	—	$	3	$	—	$	—	$	3	$	10	$	13

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(a)Total past due dealer financing receivables at September 30, 2025 were $6 million.

NOTE 8. FORD CREDIT FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (Continued)

Allowance for Credit Losses

The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in finance receivables as of the balance sheet date. The adequacy of the allowance for credit losses is assessed quarterly.

Adjustments to the allowance for credit losses are made by recording charges to Ford Credit interest, operating, and other expenses on our consolidated income statements. The uncollectible portion of a finance receivable is charged to the allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is 120 days delinquent, taking into consideration the financial condition of the customer or borrower, the value of the collateral, recourse to guarantors, and other factors.

Charge-offs on finance receivables include uncollected amounts related to principal, interest, late fees, and other allowable charges. Recoveries on finance receivables previously charged off as uncollectible are credited to the allowance for credit losses. In the event Ford Credit repossesses the collateral, the receivable is charged off and the collateral is recorded at its estimated fair value less costs to sell and reported in Other assets on our consolidated balance sheets.

An analysis of the allowance for credit losses related to finance receivables for the periods ended September 30 was as follows (in millions):


	Third Quarter 2024						First Nine Months 2024
	Consumer		Non-Consumer		Total		Consumer		Non-Consumer		Total
Allowance for credit losses
Beginning balance	$	876	$	4	$	880	$	879	$	3	$	882
Charge-offs	(155)		—		(155)		(408)		(7)		(415)
Recoveries	41		—		41		122		3		125
Provision for credit losses	99		—		99		277		5		282
Other (a)	(3)		—		(3)		(12)		—		(12)
Ending balance	$	858	$	4	$	862	$	858	$	4	$	862


	Third Quarter 2025						First Nine Months 2025
	Consumer		Non-Consumer		Total		Consumer		Non-Consumer		Total
Allowance for credit losses
Beginning balance	$	885	$	5	$	890	$	860	$	4	$	864
Charge-offs	(177)		1		(176)		(490)		(13)		(503)
Recoveries	48		—		48		133		—		133
Provision for credit losses	134		1		135		374		15		389
Other (a)	—		—		—		13		1		14
Ending balance	$	890	$	7	$	897	$	890	$	7	$	897

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(a) Primarily represents amounts related to foreign currency translation adjustments.

FORD MOTOR CO 10-Q