Document:

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                                                                  EXHIBIT 4(f)57

                                                                  EXECUTION COPY

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                 CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1
                     $100,000,000 Class A Asset Backed Notes

                        ---------------------------------

                                    INDENTURE

                           Dated as of August 25, 2004

                        ---------------------------------

                               JPMORGAN CHASE BANK
                 as the Trust Collateral Agent/Indenture Trustee

                 CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1
                                  as the Issuer

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                                TABLE OF CONTENTS

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ARTICLE I Definitions and Incorporation by Reference................................................    2

         SECTION 1.1.     Definitions...............................................................    2

         SECTION 1.2.     Rules of Construction.....................................................    8

ARTICLE II The Notes................................................................................    9

         SECTION 2.1.     Form......................................................................    9

         SECTION 2.2.     Execution, Authentication and Delivery....................................    9

         SECTION 2.3.     Registration of Transfer and Exchange of Class A Notes....................   10

         SECTION 2.4.     Mutilated, Destroyed, Lost, or Stolen Notes...............................   13

         SECTION 2.5.     Persons Deemed Owners.....................................................   14

         SECTION 2.6.     Access to List of Noteholders' Names and Addresses........................   14

         SECTION 2.7.     Maintenance of Office or Agency...........................................   14

         SECTION 2.8.     Payment of Principal and Interest; Defaulted Interest.....................   15

         SECTION 2.9.     Release of Collateral.....................................................   15

ARTICLE III Covenants, Representations and Warranties...............................................   15

         SECTION 3.1.     Payment of Principal and Interest.........................................   15

         SECTION 3.2.     Maintenance of Office or Agency...........................................   16

         SECTION 3.3.     Money for Payments to be Held in Trust....................................   16

         SECTION 3.4.     Existence.................................................................   17

         SECTION 3.5.     Protection of Trust Property..............................................   18

         SECTION 3.6.     Opinions as to Trust Property.............................................   18

         SECTION 3.7.     Performance of Obligations; Servicing of Contracts........................   19

         SECTION 3.8.     Negative Covenants........................................................   20

         SECTION 3.9.     Annual Statement as to Compliance.........................................   20

         SECTION 3.10.    Issuer May Consolidate, Etc. Only on Certain Terms........................   21

         SECTION 3.11.    Successor or Transferee...................................................   23

         SECTION 3.12.    No Other Business.........................................................   23

         SECTION 3.13.    No Borrowing..............................................................   23

         SECTION 3.14.    Guarantees, Loans, Advances and Other Liabilities.........................   23

         SECTION 3.15.    Capital Expenditures......................................................   23

         SECTION 3.16.    Compliance with Laws......................................................   24
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         SECTION 3.17.    Restricted Payments.......................................................   24

         SECTION 3.18.    Notice of Indenture Events of Default.....................................   24

         SECTION 3.19.    Further Instruments and Acts..............................................   24

         SECTION 3.20.    Amendments of Sale and Servicing Agreement and Trust Agreement............   24

         SECTION 3.21.    Income Tax Characterization...............................................   24

         SECTION 3.22.    Perfection Representations, Warranties and Covenants......................   25

ARTICLE IV Satisfaction and Discharge...............................................................   25

         SECTION 4.1.     Satisfaction and Discharge of Indenture...................................   25

         SECTION 4.2.     Application of Trust Money................................................   26

         SECTION 4.3.     Repayment of Moneys Held by Paying Agent..................................   26

ARTICLE V Remedies..................................................................................   27

         SECTION 5.1.     Indenture Events of Default...............................................   27

         SECTION 5.2.     Rights Upon Indenture Event of Default....................................   28

         SECTION 5.3.     Collection of Indebtedness and Suits for Enforcement by Indenture
                          Trustee...................................................................   30

         SECTION 5.4.     Remedies..................................................................   32

         SECTION 5.5.     Optional Preservation of the Trust Property...............................   34

         SECTION 5.6.     [Reserved]................................................................   34

         SECTION 5.7.     Limitation of Suits.......................................................   34

         SECTION 5.8.     Unconditional Rights of Noteholders To Receive Principal and Interest.....   35

         SECTION 5.9.     Restoration of Rights and Remedies........................................   35

         SECTION 5.10.    Rights and Remedies Cumulative............................................   35

         SECTION 5.11.    Delay or Omission Not a Waiver............................................   35

         SECTION 5.12.    Control by the Controlling Party..........................................   36

         SECTION 5.13.    Undertaking for Costs.....................................................   36

         SECTION 5.14.    Waiver of Stay or Extension Laws..........................................   36

         SECTION 5.15.    Action on Class A Notes...................................................   36

         SECTION 5.16.    Performance and Enforcement of Certain Obligations........................   37

         SECTION 5.17.    Subrogation...............................................................   37
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ARTICLE VI The Indenture Trustee....................................................................   38

         SECTION 6.1.     Duties of Indenture Trustee...............................................   38

         SECTION 6.2.     Rights of Indenture Trustee...............................................   40

         SECTION 6.3.     Individual Rights of Indenture Trustee....................................   41

         SECTION 6.4.     Indenture Trustee's Disclaimer............................................   41

         SECTION 6.5.     Notice of Indenture Events of Default.....................................   42

         SECTION 6.6.     Reports by Indenture Trustee to Holders...................................   42

         SECTION 6.7.     Compensation..............................................................   42

         SECTION 6.8.     Replacement of Indenture Trustee..........................................   43

         SECTION 6.9.     Successor Indenture Trustee by Merger.....................................   44

         SECTION 6.10.    Appointment of Trust Collateral Agent.....................................   45

         The Issuer and the Indenture Trustee do hereby appoint JPMorgan Chase Bank to act as the
                          initial trust collateral agent on behalf of the Indenture Trustee and
                          JPMorgan Chase Bank hereby accepts such appointment.......................   45

         SECTION 6.11.    Appointment of Co-Indenture Trustee or Separate Indenture Trustee.........   45

         SECTION 6.12.    Eligibility...............................................................   46

         SECTION 6.13.    Trust Collateral Agent to Follow Indenture Trustee's Directions...........   47

         SECTION 6.14.    Representations and Warranties of the Indenture Trustee...................   47

         SECTION 6.15.    Waiver of Setoffs.........................................................   47

         SECTION 6.16.    Controlling Party.........................................................   48

         SECTION 6.17.    Disqualification of the Indenture Trustee.................................   48

         SECTION 6.18.    Authorization and Direction...............................................   48

         SECTION 6.19.    Action under the Intercreditor Agreement..................................   48

ARTICLE VII Noteholders' Lists and Reports..........................................................   48

         SECTION 7.1.     Issuer To Furnish To Indenture Trustee Names and Addresses of
                          Noteholders...............................................................   48

         SECTION 7.2.     Preservation of Information; Communications to Noteholders................   49

ARTICLE VIII Accounts, Disbursements and Releases...................................................   49
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         SECTION 8.1.     Collection of Money.......................................................   49

         SECTION 8.2.     Release of Trust Property.................................................   49

         SECTION 8.3.     Opinion of Counsel........................................................   49

ARTICLE IX Supplemental Indentures..................................................................   50

         SECTION 9.1.     Supplemental Indentures Without Consent of Noteholders....................   50

         SECTION 9.2.     Supplemental Indentures with Consent of Noteholders.......................   51

         SECTION 9.3.     Execution of Supplemental Indentures......................................   53

         SECTION 9.4.     Effect of Supplemental Indenture..........................................   53

         SECTION 9.5.     Reference in Class A Notes to Supplemental Indentures.....................   53

ARTICLE X Redemption of Notes.......................................................................   53

         SECTION 10.1.    Redemption................................................................   53

         SECTION 10.2.    Form of Redemption Notice.................................................   54

         SECTION 10.3.    Class A Notes Payable on Redemption Date..................................   55

ARTICLE XI Miscellaneous............................................................................   55

         SECTION 11.1.    Compliance Certificates and Opinions, etc.................................   55

         SECTION 11.2.    Form of Documents Delivered to Indenture Trustee..........................   56

         SECTION 11.3.    Acts of Noteholders.......................................................   57

         SECTION 11.4.    Notices, etc. to Indenture Trustee, Class A Insurer, Backup Insurer,
                          Issuer and Rating Agencies................................................   58

         SECTION 11.5.    Notices to Noteholders; Waiver............................................   59

         SECTION 11.6.    Alternate Payment and Notice Provisions...................................   59

         SECTION 11.7.    Effect of Headings and Table of Contents..................................   59

         SECTION 11.8.    Successors and Assigns....................................................   59

         SECTION 11.9.    Separability..............................................................   60

         SECTION 11.10.   Benefits of Indenture.....................................................   60

         SECTION 11.11.   Legal Holidays............................................................   60

         SECTION 11.12.   GOVERNING LAW.............................................................   60

         SECTION 11.13.   Counterparts..............................................................   60

         SECTION 11.14.   Recording of Indenture....................................................   60

         SECTION 11.15.   Trust Obligation..........................................................   61
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         SECTION 11.16.   No Petition...............................................................   61

         SECTION 11.17.   Inspection................................................................   61

         SECTION 11.18.   Maximum Interest Payable..................................................   61

         SECTION 11.19.   No Legal Title in Holders.................................................   62

         SECTION 11.20.   Third Party Beneficiary...................................................   62

         SECTION 11.21.   Control Rights............................................................   63
</TABLE>

EXHIBIT

      Exhibit A Form of Class A Note

SCHEDULE

      Schedule A Perfection Representations, Warranties and Covenants

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      INDENTURE dated as of August 25, 2004, between CREDIT ACCEPTANCE AUTO
DEALER LOAN TRUST 2004-1, a Delaware statutory trust (the "Issuer"), and
JPMORGAN CHASE BANK, a New York banking corporation, as trust collateral agent
(the "Trust Collateral Agent") and as indenture trustee (the "Indenture
Trustee").

      Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's $100,000,000 Class
A 2.53% Asset Backed Notes (the "Class A Notes"), the Class A Insurer and the
Backup Insurer:

                                 GRANTING CLAUSE

      The Issuer hereby grants to the Indenture Trustee for the benefit of
itself, the Class A Insurer, the Backup Insurer and the Class A Noteholders, as
their respective interests may appear, a first-priority perfected security
interest in all property of the Issuer, including all of the Issuer's right,
title and interest in and to the following collateral (the "Collateral") now
owned or hereafter acquired, which Collateral shall be held by the Trust
Collateral Agent on behalf of the Indenture Trustee, subject to the lien of this
Indenture:

      (i) all right, title, and interest of the Issuer in and to the Dealer
Loans listed on Schedule A to the Sale and Servicing Agreement, and listed on
any addendum to Schedule A delivered by the Seller during the Revolving Period;
and proceeds thereof;

      (ii) certain rights under the Dealer Agreements listed on Schedule A to
the Sale and Servicing Agreement, and listed on any addendum to Schedule A
delivered by the Seller during the Revolving Period, including Credit
Acceptance's right to service the Dealer Loans and Contracts and receive the
related servicing fee and receive reimbursement of certain recovery and
repossession expenses, in accordance with the terms of the Dealer Agreements
(other than the Excluded Dealer Agreement Rights);

      (iii) Collections (other than Dealer Collections) after the applicable
Cut-off Date;

      (iv) a security interest in each Contract listed on Schedule A to the Sale
and Servicing Agreement, and listed on any addendum to Schedule A delivered by
the Seller during the Revolving Period;

      (v) all records and documents relating to the Dealer Loans and the
Contracts;

      (vi) all security interests purporting to secure payment of the Dealer
Loans;

      (vii) all security interests purporting to secure payment of the Contracts
(including a security interest in each Financed Vehicle);

      (viii) all guarantees, insurance (including insurance insuring the
priority or perfection of any Contract) or other agreements or arrangements
securing the Contracts;

      (ix) all rights under the Contribution Agreement;

<PAGE>

      (x) the Collection Account, the Reserve Account, the Principal Collection
Account and the Note Distribution Account, amounts on deposit in those accounts
and Eligible Investments of amounts in deposit in those accounts;

      (xi) the Issuer's rights under the Sale and Servicing Agreement; and

      (xii) all proceeds of the foregoing.

      Such grant shall include all rights, powers and options (but none of the
obligations) of the Issuer, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of the Collateral and all other moneys payable thereunder, to give
and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring proceedings in the name
of the Issuer or otherwise and generally to do and receive anything that the
Issuer is or may be entitled to do or receive thereunder or with respect
thereto.

      The Indenture Trustee hereby acknowledges such grant, accepts the trusts
under this Indenture in accordance with the provisions of this Indenture and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the parties and the Class A
Noteholders, the Class A Insurer and the Backup Insurer, recognizing the
priorities of their respective interests, may be adequately and effectively
protected.

      The Indenture Trustee, solely in its capacity as the named secured party
or assignee of secured party on financing statements naming Credit Acceptance,
the Seller or the Issuer as debtor or seller, acknowledges that in that capacity
it is acting as a representative, within the meaning of Section 9-502(a)(2) of
the UCC, for itself, the Trust Collateral Agent, the Class A Noteholders, the
Class A Insurer, the Backup Insurer, the Issuer and the Seller, to the extent
and as their interests as secured parties with security interests in the
collateral indicated on such financing statements may be.

      It is the intention of the Issuer and the Indenture Trustee that this
grant constitutes a grant or assignment of a valid, first priority security
interest in the Issuer's rights in the Collateral, free and clear of all Liens
(other than the security interest granted herein) to the Indenture Trustee. This
Agreement shall be deemed to create a security interest and deemed to be a
security agreement with respect to the Collateral within the meaning of Article
1, Article 8 and Article 9 of the Uniform Commercial Code as in effect in the
States of New York and Michigan and under the law of all jurisdictions governing
the creation and perfection of security interests in the Collateral.

                                   ARTICLE I
                   Definitions and Incorporation by Reference

      SECTION 1.1 Definitions.

      (a)Except as otherwise specified herein, the following terms have the
respective meanings set forth below for all purposes of this Indenture.

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      (b) Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Sale and Servicing Agreement or the
Trust Agreement.

      "Act" has the meaning specified in Section 11.3(a).

      "Authorized Officer" means, with respect to the Issuer, any officer or
agent acting pursuant to a power of attorney of the Owner Trustee or, with
respect to the Servicer, any officer or agent of the Servicer, and who is
identified on the list of Authorized Officers delivered by each of the Owner
Trustee and the Servicer to the Indenture Trustee, the Backup Servicer, the
Class A Insurer and the Backup Insurer on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).

      "Class A Termination Date" means the date on which: (i) all amounts owing
to the Class A Noteholders and, as certified in writing by the relevant party to
the Owner Trustee, the Class A Insurer, the Indenture Trustee, the Trust
Collateral Agent, the Owner Trustee, the Backup Servicer and the Backup Insurer
under the Basic Documents are paid in full; and (ii) the Class A Note Insurance
Policy and the Backup Insurance Policy have expired in accordance with their
respective terms and have been returned to the Class A Insurer and the Backup
Insurer, as applicable, for cancellation.

      "Class A Notes" means the 2.53% Class A Asset Backed Notes of the Issuer,
substantially in the form of Exhibit A hereto.

      "Class A Note Rate" means 2.53% per annum (computed on the basis of a
360-day year of twelve 30-day months and assuming the Distribution Date is on
the 15th of each month).

      "Clearing Agency" means the Depository Trust Company or its successor,
which shall be an organization registered as a "clearing agency" pursuant to
Section 17A of the Securities Exchange Act of 1934, as amended.

      "Clearing Agency Participant" means the Depository Trust Company, and its
successors, each of which shall be a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.

      "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and treasury regulations promulgated thereunder.

      "Collateral" has the meaning set forth in Granting Clause.

      "Controlling Party" means, prior to the Class A Termination Date: (i) so
long as no Class A Insurer Default has occurred and is continuing, the Class A
Insurer; and (ii) after the occurrence and during the continuance of a Class A
Insurer Default, so long as no Backup Insurer Default has occurred and is
continuing, the Backup Insurer.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

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      "Excluded Dealer Agreement Rights" means, with respect to any Dealer
Agreement listed on Schedule A to the Sale and Servicing Agreement, or listed on
any addendum thereto, the rights of Credit Acceptance thereunder related to
loans made to the related Dealer which are not Dealer Loans owned by the Issuer,
including rights of set-off and rights of indemnification, related to such
loans.

      "Executive Officer" means, with respect to any corporation, the Chairman
of the Board, the Vice Chairman, Chief Executive Officer, Chief Financial
Officer, President, Executive Vice President, any Vice President, the Secretary,
Assistant Secretary, the Treasurer, Assistant Treasurer, or Controller of such
corporation; and with respect to any partnership, any general partner thereof.

      "Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; provided that the amount of such
indebtedness if not so assumed shall in no event be deemed to be greater than
the fair market value from time to time (as reasonably determined in good faith
by the Issuer) of the property subject to such lien; or (h) obligations of such
Person under any interest rate or currency exchange agreement.

      "Indenture" means this Indenture as amended and supplemented from time to
time.

      "Indenture Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Indenture Event of Default.

      "Indenture Event of Default" has the meaning given such term in Section
5.1 herein.

      "Indenture Trustee" means JPMorgan Chase Bank, a New York banking
corporation, not in its individual capacity but as trustee under this Indenture,
or any successor trustee under this Indenture.

      "Independent" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, the Originator, any other
obligor upon the Class A Notes, the Seller and any Affiliate of any of the
foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, the Originator, any such

                                     - 4 -
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other obligor, the Seller or any Affiliate of any of the foregoing Persons and
(c) is not connected with the Issuer, the Originator, any such other obligor,
the Seller or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.

      "Independent Certificate" means a certificate or opinion to be delivered
to the Indenture Trustee, the Class A Insurer and the Backup Insurer under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.1, prepared by an Independent appraiser or other
expert appointed by an Issuer Order and approved by the Indenture Trustee, and
prior to the Class A Termination Date, the Controlling Party, in the exercise of
reasonable care, which opinion or certificate shall state that the signer has
read the definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.

      "Issuer" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein, each other obligor on the Class A Notes.

      "Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee a copy of which shall be delivered to the
Class A Insurer and the Backup Insurer.

      "Issuer Secured Obligations" means all amounts and obligations which the
Issuer may at any time owe to or on behalf of the Class A Insurer, the Backup
Insurer and the Indenture Trustee for the benefit of the Indenture Trustee and
the Class A Noteholders under this Indenture, the Class A Notes or the other
Basic Documents.

      "Majority Noteholders" means the Holders of a majority by principal amount
of the outstanding Class A Notes.

      "Note" means a Class A Note.

      "Note Owner" means, with respect to any Note registered in the name of the
Clearing Agency or its nominee, the Person who is the beneficial owner of such
Class A Note, as reflected on the books of the Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).

      "Note Register" and "Note Registrar" mean the register maintained and the
registrar appointed pursuant to Section 2.3 hereof.

      "Noteholder", "Holder" or "Class A Noteholder" means the Person in whose
name a Class A Note shall be registered in the Note Register, except that,
solely for the purposes of giving any consent, waiver, request, or demand
pursuant to the Basic Documents, the interest evidenced by any Class A Note
registered in the name of the Seller, the Servicer, or any person controlling,
controlled by, or under common control with the Seller or the Servicer, shall
not be taken into account in determining whether the requisite percentage
necessary to effect any such consent, waiver, request, or demand shall have been
obtained.

                                     - 5 -
<PAGE>

      "Officer's Certificate" means a certificate signed by any Authorized
Officer of the Owner Trustee, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 hereof.

      "Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, or as otherwise
required by the Indenture Trustee or the Controlling Party, be employees of or
counsel to the Issuer and who shall be reasonably satisfactory to the Indenture
Trustee and the Controlling Party, and which shall comply with any applicable
requirements of Section 11.1 hereof, and shall be in form and substance
reasonably satisfactory to the Indenture Trustee and the Controlling Party.

      "Outstanding" means, as of the date of determination, all Class A Notes
theretofore authenticated and delivered under this Indenture except:

            (i) Class A Notes theretofore canceled by the Note Registrar or
      delivered to the Note Registrar for cancellation;

            (ii) Class A Notes or portions thereof the payment for which money
      in the necessary amount has been theretofore deposited with the Indenture
      Trustee or any Paying Agent in trust for the Holders of such Notes
      (provided, however, that if such Class A Notes are to be redeemed, notice
      of such redemption has been duly given pursuant to this Indenture); and

            (iii) Class A Notes in exchange for or in lieu of other Class A
      Notes which have been authenticated and delivered pursuant to this
      Indenture unless proof satisfactory to the Indenture Trustee is presented
      that any such Class A Notes are held by a bona fide purchaser;

provided, however, that (x) in determining whether the Holders of the requisite
Outstanding Amount of the Class A Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any Basic
Document, Class A Notes owned by the Issuer, the Servicer, any other obligor
upon the Class A Notes, the Seller or any Affiliate of any of the foregoing
Persons shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be fully protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Class A Notes that a Responsible Officer of the Indenture Trustee
either actually knows to be so owned or has received written notice thereof
shall be so disregarded; provided, further, however, that Class A Notes which
have been paid with proceeds of the Class A Note Insurance Policy or the Backup
Insurance Policy shall continue to remain outstanding until the Class A Insurer
or the Backup Insurer, as applicable, has been paid as subrogee hereunder or
reimbursed pursuant to the Insurance Agreement, and the Class A Insurer or the
Backup Insurer, as applicable, shall be deemed to be the Holder thereof to the
extent of any payments thereon made by the Class A Insurer or the Backup
Insurer, as applicable. Class A Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgees right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Class A Notes, the Seller or any Affiliate of any of the foregoing Persons and
(y) to the extent that the Indenture Trustee is a Class A Noteholder, Class

                                     - 6 -
<PAGE>

A Notes owned by the Indenture Trustee shall be disregarded for purposes of
Section 6.8(b) hereof.

      "Outstanding Amount" means the aggregate principal amount of all Class A
Notes Outstanding at the date of determination.

      "Paying Agent" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.12
and is authorized by the Issuer to make the payments to and distributions from
the Collection Account, the Note Distribution Account, the Reserve Account, the
Principal Distribution Account and the Certificate Distribution Account
including payment of principal of or interest on the Class A Notes on behalf of
the Issuer.

      "Predecessor Note" means, with respect to any particular Class A Note,
every previous Class A Note evidencing all or a portion of the same debt as that
evidenced by such particular Class A Note; and, for the purpose of this
definition, any Class A Note authenticated and delivered under Section 2.4 in
lieu of a mutilated, lost, destroyed or stolen Class A Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Class A Note.

      "Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.

      "Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days (or such shorter period as shall be
acceptable to such Rating Agency) prior notice thereof and that such Rating
Agency shall have notified the Seller, the Servicer, the Indenture Trustee, the
Owner Trustee, the Class A Insurer, the Backup Insurer and the Issuer that such
action will not result in a reduction or withdrawal of its then current rating
of the Class A Notes, without regard to the Class A Note Insurance Policy or the
Backup Insurance Policy.

      "Record Date" means, with respect to a Distribution Date, (i) if the Class
A Notes are held in book-entry form, the day immediately preceding such
Distribution Date; or (ii) if the Class A Notes are held in definitive form, the
last day of the calendar month preceding such Distribution Date; provided that
the Record Date with respect to the First Distribution Date shall be the Closing
Date.

      "Redemption Date" means, in the case of a redemption of the Class A Notes
pursuant to Section 10.1(a) hereof, the Distribution Date specified by the
Servicer or the Issuer pursuant to Section 10.1(a) hereof.

      "Redemption Price" means in the case of a redemption of the Class A Notes
pursuant to Section 10.1(a) hereof an amount equal to the unpaid principal
amount of the outstanding Class A Notes being redeemed plus accrued and unpaid
interest thereon to but excluding the Redemption Date plus all amounts due to
the Class A Insurer, the Backup Insurer, the Indenture Trustee, the Backup
Servicer and the Owner Trustee under the Basic Documents.

                                     - 7 -
<PAGE>

      "Related Security" means the property described in clauses (ii) through
(xii) of the Granting Clause.

      "Required Long-Term Debt Rating" shall be a rating on long-term unsecured
debt obligations of "Aa3" by Moody's and "AA-" by S&P (or other equivalent
rating by a nationally recognized rating agency), and any requirement that
long-term unsecured debt obligations have the "Required Long-Term Debt Rating"
shall mean that such long-term unsecured debt obligations have the foregoing
required rating.

      "Responsible Officer" means, with respect to the Indenture Trustee, the
Trust Collateral Agent, the Paying Agent or the Owner Trustee, any officer
within the Corporate Trust Office of the Indenture Trustee, the Trust Collateral
Agent, the Paying Agent, or the Owner Trustee, as the case may be, including any
Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary, Associate, Corporate Trust Officer or any other officer of the
Indenture Trustee, the Trust Collateral Agent, the Paying Agent, or the Owner
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.

      "Rule 144A" means Rule 144A of the Securities Act.

      "Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of August 25, 2004, among the Issuer, the Seller, Credit Acceptance
Corporation, in its individual capacity and as the Servicer, the Trust
Collateral Agent/Indenture Trustee and the Backup Servicer, as the same may be
amended or supplemented from time to time in accordance with its terms.

      "Subsidiary" means, with respect to any Person, any corporation or other
Person (a) of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person or (b) that is directly or indirectly controlled by such Person
within the meaning of control under Section 15 of the Securities Act.

      "Trust Collateral Agent" means, initially, JPMorgan Chase Bank, in its
capacity as collateral agent on behalf of the Indenture Trustee for the benefit
of the Class A Noteholders, the Class A Insurer and the Backup Insurer,
including its successors-in-interest, until and unless a successor Person shall
have become the Trust Collateral Agent pursuant to the Sale and Servicing
Agreement, and thereafter "Trust Collateral Agent" shall mean such successor
Person.

      "Trust Property" has the meaning set forth in the Trust Agreement.

      SECTION 1.2 Rules of Construction.

      Unless the context otherwise requires:

            (i) a term has the meaning assigned to it;

                                     - 8 -
<PAGE>

            (ii) an accounting term not otherwise defined has the meaning
      assigned to it in accordance with generally accepted accounting principles
      as in effect from time to time;

            (iii) "or" is not exclusive;

            (iv) "including" means including without limitation; and

            (v) words in the singular include the plural and words in the plural
      include the singular.

                                   ARTICLE II

                                    The Notes

        SECTION 2.1 Form.

The Class A Notes together with the Indenture Trustee's certificate of
authentication, shall be in definitive registered form in substantially the form
set forth in Exhibit A hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Class A Notes, as evidenced by
their execution of the Class A Notes. Any portion of the text of any Class A
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Class A Note.

        The Class A Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Class A
Notes, as evidenced by their execution of such Class A Notes.

        Each Class A Note shall be dated the date of its authentication. The
terms of the Class A Notes set forth in Exhibit A hereto are part of the terms
of this Indenture.

        SECTION 2.2 Execution, Authentication and Delivery.

The Class A Notes shall be executed on behalf of the Issuer by any of the
Authorized Officers of the Owner Trustee. The signature of any such Authorized
Officer on the Class A Notes may be manual or facsimile.

        Class A Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Class A Notes or did
not hold such offices at the date of such Class A Notes.

        The Indenture Trustee shall upon receipt of the Issuer Order
authenticate and deliver the Class A Notes for original issue in an aggregate
principal amount of $100,000,000.

                                     - 9 -
<PAGE>

The aggregate outstanding principal balance of the Class A Notes at any time may
not exceed such amount.

      Each Class A Note shall be dated the date of its authentication. The Class
A Notes shall be issuable as registered Class A Notes in the minimum
denomination of $100,000 and integral multiples of $1,000 thereafter.

      It is intended that the Class A Notes be registered so as to participate
in a book-entry system with the Clearing Agency as set forth herein. The Class A
Notes shall be initially issued in the form of a single fully-registered note
with a denomination equal to the original principal balance of the Class A
Notes. Upon initial issuance, the ownership of such Notes shall be registered in
the Note Register in the name of Cede & Co., or any successor thereto, as
nominee for the Clearing Agency.

      No Class A Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Class A
Note a certificate of authentication substantially in the form provided for
herein executed by the Indenture Trustee by the manual signature of one of its
Responsible Officers, and such certificate upon any Class A Note shall be
conclusive evidence, and the only evidence, that such Class A Note has been duly
authenticated and delivered hereunder.

      SECTION 2.3 Registration of Transfer and Exchange of Class A Notes.

      (a) The Note Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 2.7, a Note Register in which, subject to
such reasonable regulations as it may prescribe, the Indenture Trustee shall
provide for the registration of Notes and of transfers and exchanges of Class A
Notes as herein provided. The Indenture Trustee shall be the initial Note
Registrar. In the event that, subsequent to the Closing Date, the Indenture
Trustee notifies the Seller, the Class A Insurer and the Backup Insurer that it
is unable to act as Note Registrar, the Seller shall appoint another bank or
trust company, having an office or agency located in the Borough of Manhattan,
The City of New York, agreeing to act in accordance with the provisions of this
Indenture applicable to it, and otherwise acceptable to the Indenture Trustee
and, prior to the Class A Termination Date, the Controlling Party, to act as
successor Note Registrar under this Indenture. If at any time the Indenture
Trustee is not the Note Registrar, the Note Registrar shall make available to
the Indenture Trustee ten (10) days prior to each Distribution Date and at such
other times as the Indenture Trustee may reasonably request the names and
addresses of the Holders as they appear in the Note Register.

      No sale, pledge or other transfer of a Class A Note shall be made unless
such sale, pledge or other transfer is (A) pursuant to an effective registration
statement under the Securities Act, (B) for so long as the Class A Notes are
eligible for resale pursuant to Rule 144A to a Person the transferor reasonably
believes after due inquiry is a "qualified institutional buyer" as defined in
Rule 144A that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the transfer is being made in
reliance on Rule 144A, or (C) pursuant to another available exemption from the
registration requirements of the Securities Act, the Investment Company Act of
1940, as amended and any applicable state securities and blue sky laws or is
made in accordance with said Act and state laws. The Indenture

                                     - 10 -
<PAGE>

Trustee may require an opinion of counsel to be delivered to it in connection
with any transfer of the Class A Notes pursuant to clauses (A) or (C) above.

      Under no circumstances may an institutional "accredited investor" within
Regulation D of the Securities Act take delivery in the form of a beneficial
interest in a book-entry Class A Note if such purchaser is not a "qualified
institutional buyer" as defined under Rule 144A under the Securities Act.

      If definitive Class A Notes are issued, the Class A Notes may not be
transferred, directly or indirectly, to any Person unless (A) the transferee of
the Class A Note certifies in a certificate to the Issuer and the Indenture
Trustee that such Person is a "qualified institutional buyer" as defined in Rule
144A or (B) the transferee of the Class A Note delivers to the Indenture Trustee
and the Issuer an opinion of counsel that such transfer is permitted pursuant to
clause (A) or (C) above.

      All opinions of counsel required in connection with any transfer shall be
by counsel reasonably acceptable to the Indenture Trustee.

      The transferee of each Class A Note shall be deemed to represent and
warrant that, with respect to the source of funds to be used by such transferee
to acquire this Class A Note (the "Source") either (a) such Source is not an
"employee benefit plan" (within the meaning of Section 3(3) of ERISA), a "plan"
(within the meaning of Section 4975(e)(1) of the Code) or a plan that is subject
to any substantively similar provision of any federal, state or local law, or a
person using assets of any such plan, or (b) the acquisition and holding of the
Class A Notes by such Source will not constitute or result in a nonexempt
prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or
any substantively similar provision of any federal, state or local law.

      Neither the Issuer nor the Indenture Trustee is obligated to register the
Class A Notes under the Securities Act or any other securities law. Any transfer
in violation of the provisions of this Section 2.3 shall be void ab initio.

      (b) If an election is made to hold Class A Notes in book-entry form, the
Class A Notes shall be registered in the name of a nominee designated by the
Clearing Agency (and may be aggregated as to denominations with other Class A
Notes held by the Clearing Agency). With respect to Class A Notes held in
book-entry form:

            (i) the Note Registrar, the Class A Insurer, the Backup Insurer, the
  Trust Collateral Agent and the Indenture Trustee will be entitled to deal with
  the Clearing Agency for all purposes of this Indenture (including the payment
  of principal of and interest on the Class A Notes and the giving of
  instructions or directions hereunder) as the sole holder of the Class A Notes,
  and shall have no obligation to the Note Owners;

            (ii) the rights of Note Owners will be exercised only through the
  Clearing Agency and will be limited to those established by law and agreements
  between such Note Owners and the Clearing Agency and/or the Clearing Agency
  Participants pursuant to the Depository Agreement;

                                     - 11 -
<PAGE>

            (iii) whenever this Indenture or any of the Basic Documents requires
  or permits actions to be taken based upon instructions or directions of
  Holders of Class A Notes evidencing a specified percentage of the Class A Note
  Balance, the Clearing Agency will be deemed to represent such percentage only
  to the extent that it has received instructions to such effect from Note
  Owners and/or Clearing Agency Participants owning or representing,
  respectively, such required percentage of the beneficial interest in the Class
  A Notes and has delivered such instructions to the Indenture Trustee; and

            (iv) without the consent of the Seller and the Indenture Trustee, no
  such Class A Note may be transferred by the Clearing Agency except to a
  successor Clearing Agency that agrees to hold such Note for the account of the
  Note Owners or except upon the election of the Note Owner thereof or a
  subsequent transferee to hold such Class A Note in physical form.

      None of the Indenture Trustee, the Note Registrar, the Class A Insurer or
the Backup Insurer shall have any responsibility to monitor or restrict the
transfer of beneficial ownership in any Note an interest in which is
transferable through the facilities of the Clearing Agency.

      If (i)(A) the Issuer advises the Indenture Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Class A Notes as described in the
Depository Agreement and (B) the Issuer is unable to locate a qualified
successor, (ii) the Issuer at its option advises the Indenture Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency, or (iii) Note Owners representing beneficial interests in Class A Notes
aggregating not less than a majority of the Class A Note Balance advise the
Indenture Trustee and the Clearing Agency through the Clearing Agency
Participants in writing that the continuation of a book-entry system through the
Clearing Agency with respect to such class is no longer in the best interests of
the related Note Owners, then the Indenture Trustee shall notify all such Note
Owners, through the Clearing Agency, and the Class A Insurer and the Backup
Insurer of the occurrence of any such event and of the availability of
definitive Class A Notes to such Note Owners requesting the same. Upon surrender
to the Indenture Trustee of the related Class A Notes by the Clearing Agency
accompanied by registration instructions from the Clearing Agency, the Indenture
Trustee shall issue definitive Class A Notes and deliver such definitive Notes
in accordance with the instructions of the Clearing Agency. None of the Issuer,
the Note Registrar, the Class A Insurer, the Backup Insurer nor the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of definitive Class A Notes, the Indenture Trustee shall
recognize the Holders of the definitive Class A Notes as Noteholders hereunder.
The Indenture Trustee shall not be liable if the Seller is unable to locate a
qualified successor Clearing Agency.

      (c)In order to preserve the exemption for resales and transfers provided
by Rule 144A, the Issuer shall provide to any Holder of a Class A Note and any
prospective purchaser designated by such Holder, upon request of such Holder or
such prospective purchaser, such information required by Rule 144A as will
enable the resale of such Class A Note to be made pursuant to Rule 144A. The
Servicer and the Indenture Trustee shall cooperate

                                     - 12 -
<PAGE>

with the Issuer in providing the Issuer such information regarding the Class A
Notes, the Collateral and other matters regarding the Trust as the Issuer shall
reasonably request to meet its obligations under the preceding sentence.

      (d) Upon surrender for registration of transfer of any Class A Note at the
Corporate Trust Office, the Indenture Trustee shall, subject to Section 2.3(a),
authenticate, and deliver, in the name of the designated transferee or
transferees, one or more new Class A Notes in authorized denominations of a like
aggregate amount dated the date of authentication by the Indenture Trustee. At
the option of a Holder, Class A Notes may be exchanged for other Class A Notes
of authorized denominations of a like aggregate amount upon surrender of the
Class A Notes to be exchanged at the Corporate Trust Office.

      (e) Every Class A Note presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee and the Note Registrar duly executed
by the Holder or his attorney duly authorized in writing. Each Class A Note
surrendered for registration of transfer or exchange shall be cancelled and
subsequently disposed of by the Indenture Trustee in accordance with its
customary practice.

      (f)No service charge shall be made for any registration of transfer or
exchange of Class A Notes, but the Indenture Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Class A Notes.

      (g)Subject to Article IX hereof, the Class A Notes and this Indenture may
be amended or supplemented from time to time, prior to the Class A Termination
Date, with the consent of the Controlling Party, and in certain circumstances
the Backup Insurer, but without the consent of any of the Class A Noteholders,
to modify restrictions on and procedures for resale and other transfers of the
Class A Notes to reflect any change in applicable law or regulations (or the
interpretation thereof) or practices relating to the resale or transfer of
restricted securities generally.

      SECTION 2.4 Mutilated, Destroyed, Lost, or Stolen Notes.

If (a) any mutilated Class A Note shall be surrendered to the Note Registrar, or
if the Note Registrar shall receive evidence to its satisfaction of the
destruction, loss, or theft of any Class A Note and (b) there shall be delivered
to the Note Registrar, the Class A Insurer, the Backup Insurer, the Issuer and
the Indenture Trustee such security or indemnity (an unsecured indemnity
agreement of a Class A Noteholder with a net worth at least equal to
$200,000,000 containing terms reasonably satisfactory to the Indenture Trustee
and the Controlling Party being sufficient for such security or indemnity
requirement), as may be required by them to save each of them and the Issuer
harmless, then in the absence of notice that such Note shall have been acquired
by a bona fide purchaser, the Owner Trustee on behalf of the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost, or stolen Class A Note, a
new Class A Note of like tenor and denomination. In connection with the issuance
of any new Class A Note under this Section, the Indenture Trustee and the Note
Registrar may require the payment of a sum sufficient to cover any tax or other

                                     - 13 -
<PAGE>

governmental charge that may be imposed in connection therewith. The Indenture
Trustee may charge such Holder for its expenses (including without limitation
the fees and expenses of its counsel) in replacing a Class A Note. Any duplicate
Class A Note issued pursuant to this Section shall constitute conclusive
evidence of ownership of such Class A Note, as if originally issued, whether or
not the lost, stolen, or destroyed Class A Note shall be found at any time.

      SECTION 2.5 Persons Deemed Owners.

The Issuer, the Indenture Trustee, the Trust Collateral Agent, the Note
Registrar and any agent of the Issuer, the Indenture Trustee or the Note
Registrar may treat the Person in whose name any Class A Note shall be
registered as the owner of such Class A Note for the purpose of receiving
distributions pursuant to Section 5.08 of the Sale and Servicing Agreement and
Section 5.2 hereof and for all other purposes whatsoever, and neither the
Issuer, the Indenture Trustee, the Trust Collateral Agent, the Class A Insurer,
the Backup Insurer nor the Note Registrar nor any such agent shall be bound by
any notice to the contrary.

      SECTION 2.6 Access to List of Noteholders' Names and Addresses.

The Indenture Trustee shall furnish or cause to be furnished to the Servicer,
the Class A Insurer or the Backup Insurer, within 15 days after receipt by the
Indenture Trustee of a request therefor from the Servicer, the Class A Insurer
or the Backup Insurer in writing, a list, in such form as the Servicer, Class A
Insurer or the Backup Insurer may reasonably require, of the names and addresses
of the Class A Noteholders as of the most recent Record Date. If three or more
Class A Noteholders, or one or more Holders of Notes aggregating not less than
10% of the Class A Note Balance, apply in writing to the Indenture Trustee, and
such application states that the applicants desire to communicate with other
Noteholders with respect to their rights under this Indenture or under the Class
A Notes and such application shall be accompanied by a copy of the communication
that such applicants propose to transmit, then the Indenture Trustee shall,
within five Business Days after the receipt of such application, make available
to such Class A Noteholders access during normal business hours to the current
list of Class A Noteholders. Each Holder, by receiving and holding a Class A
Note, shall be deemed to have agreed to hold none of the Servicer, the Class A
Insurer, the Backup Insurer nor the Indenture Trustee accountable by reason of
the disclosure of its name and address, regardless of the source from which such
information was derived.

      SECTION 2.7 Maintenance of Office or Agency.

The Indenture Trustee shall maintain in New York, New York, an office or offices
or agency or agencies where Class A Notes may be surrendered for registration of
transfer or exchange and an office in New York, New York, where notices and
demands to or upon the Indenture Trustee in respect of the Class A Notes and
this Indenture may be served. The Indenture Trustee initially designates the
Corporate Trust Office as specified in this Indenture as its office for such
purposes. The Indenture Trustee shall give prompt written notice to the
Servicer, the Class A Insurer, the Backup Insurer and to Class A Noteholders of
any change in the location of the Note Register or any such office or agency.

                                     - 14 -
<PAGE>

      SECTION 2.8 Payment of Principal and Interest; Defaulted Interest.

      (a) The Class A Notes shall accrue interest as provided in the form of the
Class A Note set forth in Exhibit A hereto and such interest shall be due and
payable on each Distribution Date as specified therein. Any installment of
interest or principal, if any, payable on any Class A Note which is punctually
paid or duly provided for by the Issuer on the applicable Distribution Date or
on the Stated Final Maturity shall be paid as set forth in Section 5.09(a) of
the Sale and Servicing Agreement.

      (b) The principal of each Class A Note shall be payable in installments on
each Distribution Date as provided in the form of the Class A Note set forth in
Exhibit A hereto. Notwithstanding the foregoing, the entire unpaid principal
amount of the Class A Notes, and all accrued interest thereon, shall become due
and payable, if not previously paid, upon the acceleration thereof after the
occurrence of an Indenture Event of Default in the manner provided in Section
5.2. All principal payments on the Class A Notes shall be made as provided in
Section 5.2 and in Section 5.09(a) of the Sale and Servicing Agreement, as
applicable. Upon written notice from the Issuer, the Indenture Trustee shall
notify the Person in whose name a Class A Note is registered at the close of
business on the Record Date preceding the Distribution Date on which the Issuer
expects that the final installment of principal of and interest on such Class A
Note will be paid. Such notice shall be mailed or transmitted by facsimile prior
to such final Distribution Date and shall specify that such final installment
will be payable only upon presentation and surrender of such Class A Note and
shall specify the place where such Class A Note may be presented and surrendered
for payment of such installment. Notices in connection with redemptions of Class
A Notes shall be mailed to Noteholders as provided in Section 10.2.

      (c) If the Issuer defaults in a payment of interest on the Class A Notes,
such defaulted interest shall itself bear interest (to the extent lawful) at the
Class A Note Rate. Such defaulted interest (and such interest thereon) shall be
paid on subsequent Distribution Dates pursuant to Section 5.09 of the Sale and
Servicing Agreement, or as otherwise set forth below.

      SECTION 2.9 Release of Collateral.

The Indenture Trustee shall, on or after the Class A Termination Date, release
and shall cause the Trust Collateral Agent to release any remaining portion of
the Trust Property from the lien created by this Indenture and shall cause the
Trust Collateral Agent to deposit in the Collection Account any funds then on
deposit in any other Trust Account. The Indenture Trustee shall release property
from the lien created by this Indenture pursuant to this Section only upon
receipt by the Indenture Trustee, the Class A Insurer and the Backup Insurer of
an Issuer Request accompanied by an Officer's Certificate and an Opinion of
Counsel meeting the applicable requirements of Section 11.1.

                                  ARTICLE III

                    Covenants, Representations and Warranties

      SECTION 3.1 Payment of Principal and Interest.

                                     - 15 -
<PAGE>

The Issuer will duly and punctually pay the principal of and interest on the
Class A Notes in accordance with the terms of the Class A Notes and this
Indenture. Without limiting the foregoing and in accordance with the terms set
forth in Section 5.09(a) of the Sale and Servicing Agreement, the Issuer will
cause to be distributed to the Class A Noteholders all amounts on deposit in the
Note Distribution Account on each Distribution Date deposited therein pursuant
to the Sale and Servicing Agreement for the benefit of the Class A Notes, to the
Class A Noteholders. Amounts properly withheld under the Code by any Person from
a payment to any Class A Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to such Class A Noteholder for all
purposes of this Indenture.

      SECTION 3.2 Maintenance of Office or Agency.

For so long as the Indenture Trustee is the transfer agent, the Issuer will
maintain in New York, New York, an office or agency where Class A Notes may be
surrendered for registration of transfer or exchange, and an office in New York,
New York where notices and demands to or upon the Issuer in respect of the Class
A Notes and this Indenture may be served. The Issuer hereby initially appoints
the Indenture Trustee to serve as its agent for the foregoing purposes. The
Issuer will give prompt written notice to the Indenture Trustee, the Class A
Insurer and the Backup Insurer of the location, and of any change in the
location, of any such office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Indenture
Trustee or the Class A Insurer and the Backup Insurer with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.

      SECTION 3.3 Money for Payments to be Held in Trust.

On or before each Distribution Date and Redemption Date, the Issuer shall
deposit or cause to be deposited in the Note Distribution Account from the
Collection Account, a sum sufficient to pay the amounts then becoming due under
the Class A Notes, such sum to be held in trust for the benefit of the Persons
entitled thereto and (unless the Paying Agent is the Indenture Trustee) shall
promptly notify the Indenture Trustee of its action or failure so to act.

      The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee, the Class A Insurer and the
Backup Insurer an instrument in which such Paying Agent shall agree with the
Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
will:

            (i) hold all sums held by it for the payment of amounts due with
  respect to the Class A Notes in trust for the benefit of the Persons entitled
  thereto until such sums shall be paid to such Persons or otherwise disposed of
  as herein provided and pay such sums to such Persons as herein provided;

            (ii) give the Indenture Trustee, the Class A Insurer and the Backup
  Insurer written notice of any default by the Issuer of which a Responsible
  Officer has

                                     - 16 -
<PAGE>

      actual knowledge (or any other obligor upon the Class A Notes) in the
      making of any payment required to be made with respect to the Class A
      Notes;

            (iii) at any time during the continuance of any such default, upon
      the written request of the Indenture Trustee, or, prior to the Class A
      Termination Date, the Controlling Party, forthwith pay to the Indenture
      Trustee all sums so held in trust by such Paying Agent;

            (iv) immediately resign as a Paying Agent and forthwith pay to the
      Indenture Trustee all sums held by it in trust for the payment of Class A
      Notes if at any time it ceases to meet the standards required to be met by
      a Paying Agent at the time of its appointment; and

            (v) comply with all requirements of the Code with respect to the
      withholding from any payments made by it on any Class A Notes of any
      applicable withholding taxes imposed thereon and with respect to any
      applicable reporting requirements in connection therewith in each case, as
      instructed by the Issuer.

        The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such a payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

        Subject to applicable laws with respect to the escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Class A Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request, with the written consent
of the Controlling Party if the Class A Termination Date has not occurred; and
the Holder of such Class A Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so paid to the Issuer), and all liability of the Indenture Trustee
or such Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Issuer cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee shall also adopt and employ, at the expense of the Issuer,
any other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Class A Notes have
been called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).

        SECTION 3.4 Existence.

                                     - 17 -
<PAGE>

Except as otherwise permitted by the provisions of Section 3.10, the Issuer will
keep in full effect its existence, rights and franchises as a statutory trust
under the laws of the State of Delaware and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Class A Notes, the Collateral and each other instrument or
agreement included in the Trust Property.

        SECTION 3.5 Protection of Trust Property.

The Issuer intends the security interest granted pursuant to this Indenture in
favor of the Indenture Trustee, the Class A Noteholders, the Class A Insurer and
the Backup Insurer to be prior to all other liens in respect of the Trust
Property, and the Issuer shall take all actions necessary to obtain and
maintain, in favor of the Indenture Trustee, for the benefit of the Class A
Noteholders, the Class A Insurer and the Backup Insurer, a first lien on and a
first priority, perfected security interest in the Trust Property. The Issuer
will from time to time prepare (or shall cause to be prepared), execute, file
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:

            (i) grant more effectively all or any portion of the Trust Property;

            (ii) maintain or preserve the lien and security interest (and the
      priority thereof) in favor of the Indenture Trustee for the benefit of the
      Class A Noteholders, the Class A Insurer and the Backup Insurer created by
      this Indenture or carry out more effectively the purposes hereof;

            (iii) perfect, publish notice of or protect the validity of any
      grant made or to be made by this Indenture;

            (iv) enforce any of the Trust Property;

            (v) preserve and defend title to the Trust Property and the rights
      of the Indenture Trustee in such Trust Property against the claims of all
      persons and parties; and

            (vi) pay all taxes or assessments levied or assessed upon the Trust
      Property when due.

        The Issuer hereby designates and authorizes the Indenture Trustee its
agent and attorney-in-fact to execute, upon Issuer request, any financing
statement, continuation statement or other instrument required to be executed by
the Issuer pursuant to this Section.

        SECTION 3.6 Opinions as to Trust Property.

        (a)On the Closing Date, the Issuer shall furnish to the Indenture
Trustee, the Class A Insurer and the Backup Insurer an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to this Indenture with respect to the filing of any financing statements
and continuation statements, as are necessary to perfect and

                                     - 18 -
<PAGE>

make effective the first priority lien and security interest in favor of the
Indenture Trustee, created by this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.

      (b)Within 90 days after the beginning of each calendar year, beginning
with the first calendar year beginning more than three months after the Closing
Date, the Issuer shall furnish to the Indenture Trustee, the Class A Insurer and
the Backup Insurer an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and with respect to the filing of any financing statements and continuation
statements as are necessary to maintain the lien and security interest created
by this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and the filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until the 90th day to occur in the following
calendar year.

      SECTION 3.7 Performance of Obligations; Servicing of Contracts.

      (a)The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Property or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the Basic Documents or such other instrument or agreement.

      (b)The Issuer may contract with other Persons acceptable to the
Controlling Party or, if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Indenture Trustee, to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee and the Controlling Party in an
Officer's Certificate of the Issuer shall be deemed to be action taken by the
Issuer. Initially, the Servicer has agreed to assist the Issuer in performing
its duties under this Indenture.

      (c)The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Property, including, but not
limited to, preparing (or causing to be prepared) and filing (or causing to be
filed) all UCC financing statements and continuation statements required to be
filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.

      (d)Upon a Responsible Officer of the Owner Trustee having actual knowledge
or written notice thereof, the Issuer shall promptly notify the Indenture
Trustee, the Class A Insurer, the Backup Insurer and the Rating Agencies of the
occurrence of a Servicer Default in accordance with Section 11.4 hereof, and
shall specify in such notice the action, if

                                     - 19 -
<PAGE>

any, the Issuer is taking in respect of such default. If a Servicer Default
shall arise from the failure of the Servicer to perform any of its duties or
obligations under the Sale and Servicing Agreement with respect to the Dealer
Loans or Contracts, the Issuer shall take all reasonable steps available to it
to remedy such failure.

        (e)The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents, (x) prior to the Class A Termination Date without the prior
written consent of the Controlling Party, or (y) if the effect thereof would
adversely affect the Holders of the Class A Notes.

        SECTION 3.8 Negative Covenants.

So long as any Class A Notes are Outstanding, the Issuer shall not:

            (i) except as expressly permitted by this Indenture or the Basic
      Documents, sell, transfer, exchange or otherwise dispose of any of the
      properties or assets of the Issuer, including those included in the Trust
      Property, unless directed to do so by the Controlling Party;

            (ii) claim any credit on, or make any deduction from the principal
      or interest payable in respect of, the Class A Notes (other than amounts
      properly withheld from such payments under the Code) or assert any claim
      against any present or former Noteholder by reason of the payment of the
      taxes levied or assessed upon any part of the Trust Property; or

            (iii) (A) permit the validity or effectiveness of this Indenture to
      be impaired, or permit the lien in favor of the Indenture Trustee created
      by this Indenture to be amended, hypothecated, subordinated, terminated or
      discharged, or permit any Person to be released from any covenants or
      obligations with respect to the Class A Notes under this Indenture except
      as may be expressly permitted hereby, (B) permit any lien, charge, excise,
      claim, security interest, mortgage or other encumbrance (other than the
      lien of this Indenture) to be created on or extend to or otherwise arise
      upon or burden the Trust Property or any part thereof or any interest
      therein or the proceeds thereof (other than tax liens, mechanics' liens
      and other liens that arise by operation of law, in each case on a Financed
      Vehicle and arising solely as a result of an action or omission of the
      related Obligor), (C) permit the lien of this Indenture not to constitute
      a valid perfected first priority security interest in the Trust Property,
      (D) change its name, identity, state of organization or structure as a
      statutory trust in any manner that would, could or might make any
      financing statement or continuation statement filed with respect to it
      seriously misleading within the meaning of Section 9-507 of the UCC or (E)
      waive, amend, modify, supplement or terminate any Basic Document or any
      provision thereof, or fail to comply with the provisions of the Basic
      Documents, in each case, prior to the Class A Termination Date, without
      the prior written consent of the Controlling Party.

        SECTION 3.9 Annual Statement as to Compliance.

                                     - 20 -
<PAGE>

The Issuer will deliver to the Indenture Trustee, the Rating Agencies, the Class
A Insurer, the Backup Insurer and the Noteholders on or before April 30th of
each year beginning in the year 2005, an Officer's Certificate dated as of the
previous December 31st stating, as to the Authorized Officer signing such
Officer's Certificate, that

            (i) a review of the activities of the Issuer during the preceding
      12-month period (or, for the initial certificate, for such shorter period
      as may have elapsed from the initial issuance of the Class A Notes to such
      December 31st) and of performance under this Indenture has been made under
      such Authorized Officer's supervision; and

            (ii) to the best of such Authorized Officer's knowledge, based on
      such review, the Issuer has complied with all conditions and covenants
      under this Indenture throughout such year, or, if there has been a default
      in the compliance of any such condition or covenant, specifying each such
      default known to such Authorized Officer and the nature and status
      thereof.

        SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms.

        (a)The Issuer shall not consolidate or merge with or into any other
Person, unless

            (i) the Person (if other than the Issuer) formed by or surviving
      such consolidation or merger shall be a Person organized and existing
      under the laws of the United States of America or any State and shall
      expressly assume, by an indenture supplemental hereto, executed and
      delivered to the Indenture Trustee, in form satisfactory to the Indenture
      Trustee, and prior to the Class A Termination Date, the Controlling Party,
      the due and punctual payment of the principal of and interest on all Notes
      and the performance or observance of every agreement and covenant of this
      Indenture on the part of the Issuer to be performed or observed, all as
      provided herein;

            (ii) immediately after giving effect to such transaction, no Early
      Amortization Event, Indenture Default or Indenture Event of Default shall
      have occurred and be continuing;

            (iii) the Rating Agency Condition shall have been satisfied with
      respect to such transaction;

            (iv) the Issuer shall have received an Opinion of Counsel (and shall
      have delivered copies thereof to the Indenture Trustee, the Class A
      Insurer and the Backup Insurer) to the effect that such transaction will
      not have any material adverse tax consequence to the Trust, any Class A
      Noteholder, the Class A Insurer, the Backup Insurer or any
      Certificateholder;

            (v) any action as is necessary to maintain the Lien and security
      interest created by this Indenture shall have been taken;

                                     - 21 -
<PAGE>

            (vi) prior to the Class A Termination Date, the Issuer shall have
      given the Class A Insurer and the Backup Insurer written notice of such
      proposed consolidation or merger at least 30 Business Days prior to its
      proposed consummation, and the Controlling Party has given its prior
      written consent of such consolidation or merger; and

            (vii) the Issuer shall have delivered to the Indenture Trustee, the
      Class A Insurer and the Backup Insurer an Officer's Certificate and an
      Opinion of Counsel each stating that such consolidation or merger and such
      supplemental indenture comply with this Section 3.10(a) and that all
      conditions precedent herein provided for relating to such transaction have
      been complied with.

        (b) The Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the Trust Property, to any
Person, unless

            (i) the Person that acquires by conveyance or transfer the
      properties and assets of the Issuer the conveyance or transfer of which is
      hereby restricted shall (A) be a United States citizen or a Person
      organized and existing under the laws of the United States of America or
      any State, (B) expressly assume, by an indenture supplemental hereto,
      executed and delivered to the Indenture Trustee, in form satisfactory to
      the Indenture Trustee, and prior to the Class A Termination Date the
      Controlling Party, the due and punctual payment of the principal of and
      interest on all Class A Notes and the performance or observance of every
      agreement and covenant of this Indenture and each of the Basic Documents
      on the part of the Issuer to be performed or observed, all as provided
      herein, (C) expressly agree by means of such supplemental indenture that
      all right, title and interest so conveyed or transferred shall be subject
      and subordinate to the rights of Holders of the securities and (D) unless
      otherwise provided in such supplemental indenture, expressly agree to
      indemnify, defend and hold harmless the Issuer against and from any loss,
      liability or expense arising under or related to this Indenture and the
      Class A Notes;

            (ii) immediately after giving effect to such transaction, no Early
      Amortization Event, Indenture Default or Indenture Event of Default shall
      have occurred and be continuing;

            (iii) the Rating Agency Condition shall have been satisfied with
      respect to such transaction;

            (iv) the Issuer shall have received an Opinion of Counsel (and shall
      have delivered copies thereof to the Indenture Trustee, the Class A
      Insurer and the Backup Insurer) to the effect that such transaction will
      not have any material adverse tax consequence to the Trust, any Class A
      Noteholder, the Class A Insurer, the Backup Insurer or any Certificate
      holder;

            (v) any action as is necessary to maintain the Lien and security
      interest created by this Indenture shall have been taken;

                                     - 22 -
<PAGE>

            (vi) prior to the Class A Termination Date, the Issuer shall have
  given the Class A Insurer and the Backup Insurer written notice of such
  proposed action at least 30 Business Days prior to its proposed consummation,
  and the Controlling Party shall have given its prior written consent to such
  action; and

            (vii) the Issuer shall have delivered to the Indenture Trustee, the
  Class A Insurer and the Backup Insurer an Officer's Certificate and an Opinion
  of Counsel each stating that such conveyance or transfer and such supplemental
  indenture comply with this Section 3.10(b) and that all conditions precedent
  herein provided for relating to such transaction have been complied with.

      SECTION 3.11 Successor or Transferee.

      (a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.

      (b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.10 (b), Credit Acceptance Auto Dealer Loan Trust
2004-1 will be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Class A
Notes immediately upon the delivery of written notice from the Issuer to the
Indenture Trustee, the Class A Insurer and the Backup Insurer stating that
Credit Acceptance Auto Dealer Loan Trust 2004-1 is to be so released.

      SECTION 3.12 No Other Business.

The Issuer shall not engage in any business other than financing, purchasing,
owning, selling and managing the Contracts in the manner contemplated by this
Indenture and the Basic Documents and activities incidental thereto and any
other activities permitted under the Trust Agreement.

      SECTION 3.13 No Borrowing.

The Issuer shall not issue, incur, assume, guarantee or otherwise become liable,
directly or indirectly, for any Indebtedness except for: (i) the Class A Notes;
(ii) obligations owing from time to time to the Class A Insurer and the Backup
Insurer; and (iii) any other Indebtedness permitted by or arising under the
Basic Documents. The proceeds of the Class A Notes shall be used exclusively to
fund the Issuer's purchase of the Dealer Loans and the other assets specified in
the Sale and Servicing Agreement, to fund the Reserve Account and to pay the
Issuer's organizational, transactional and start-up expenses.

      SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities.

Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or

                                     - 23 -
<PAGE>

acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.

      SECTION 3.15 Capital Expenditures.

The Issuer shall not make any expenditure (by long-term or operating lease or
otherwise) for capital assets (either realty or personalty) except as
contemplated by the Basic Documents.

      SECTION 3.16 Compliance with Laws.

The Issuer shall comply with the requirements of all applicable laws, the
non-compliance with which would, individually or in the aggregate, materially
and adversely affect the ability of the Issuer to perform its obligations under
the Class A Notes, this Indenture or any Basic Document.

      SECTION 3.17 Restricted Payments.

The Issuer shall not, directly or indirectly, (i) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to the Owner Trustee or any owner of a
beneficial interest in the Issuer or otherwise with respect to any ownership or
equity interest or security in or of the Issuer or to the Servicer, (ii) redeem,
purchase, retire or otherwise acquire for value any such ownership or equity
interest or security or (iii) set aside or otherwise segregate any amounts for
any such purpose; provided, however, that the Issuer may make, or cause to be
made, distributions to the Servicer, the Owner Trustee, the Indenture Trustee,
the Trust Collateral Agent, the Class A Insurer, the Backup Insurer and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement and the Trust Agreement.
The Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
Basic Documents.

      SECTION 3.18 Notice of Indenture Events of Default.

Upon a Responsible Officer of the Owner Trustee having actual knowledge or
receipt of written notice thereof, the Issuer agrees to give the Indenture
Trustee, the Trust Collateral Agent, the Class A Insurer, the Backup Insurer and
the Rating Agency prompt written notice of each Indenture Event of Default
hereunder and each default on the part of the Servicer or the Seller of its
obligations under the Sale and Servicing Agreement.

      SECTION 3.19 Further Instruments and Acts.

Upon request of the Indenture Trustee or the Controlling Party, the Issuer will
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of this
Indenture.

      SECTION 3.20 Amendments of Sale and Servicing Agreement and Trust
Agreement.

The Issuer shall not agree to any amendment to Section 11.01 of the Sale and
Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate the
requirements thereunder that

                                     - 24 -
<PAGE>

the Indenture Trustee or the Holders of the Class A Notes consent to amendments
thereto as provided therein.

      SECTION 3.21 Income Tax Characterization.

For purposes of federal income, state and local income and franchise and any
other income taxes, the Issuer will, and each Class A Noteholder by such Class A
Noteholder's acceptance thereof agrees to, treat the Class A Notes as
indebtedness and hereby instructs the Issuer to treat the Class A Notes as
indebtedness for federal, state and other tax reporting purposes.

      SECTION 3.22 Perfection Representations, Warranties and Covenants.

The perfection representations, warranties and covenants made by the Issuer and
set forth on Schedule A hereto shall be a part of this Indenture for all
purposes.

                                   ARTICLE IV

                           Satisfaction and Discharge

      SECTION 4.1 Satisfaction and Discharge of Indenture.

This Indenture shall cease to be of further effect with respect to the Class A
Notes except as to: (i) rights of registration of transfer and exchange; (ii)
substitution of mutilated, destroyed, lost or stolen Class A Notes; (iii) rights
of Class A Noteholders to receive payments of principal thereof and interest
thereon; (iv) Sections 3.3, 3.4, 3.5, 3.7, 3.8, 3.10, 3.12, 3.13, 3.14, 3.15,
3.16, 3.17, 3.19, 3.20 and 3.21; (v) the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.7 and the obligations of the Indenture Trustee under Section
4.2); and (vi) the rights of Class A Noteholders, the Class A Insurer and the
Backup Insurer as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee, or the Trust Collateral Agent, payable to all or any
of them, and the Indenture Trustee, on written demand of and at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Class A Notes, when

            (A) either

                  (1) all Class A Notes theretofore authenticated and delivered
            (other than (i) Class A Notes that have been destroyed, lost or
            stolen and that have been replaced or paid as provided in Section
            2.4 and (ii) Class A Notes for whose payment money has theretofore
            been deposited in trust or segregated and held in trust by the
            Issuer and thereafter repaid to the Issuer or discharged from such
            trust, as provided in Section 3.3) have been delivered to the
            Indenture Trustee for cancellation; or

                  (2) all Class A Notes not theretofore delivered to the
            Indenture Trustee for cancellation

                        (i) have become due and payable,

                                     - 25 -
<PAGE>

                              (ii) will become due and payable at the Stated
                        Final Maturity within one year, or

                              (iii) are to be called for redemption within one
                        year under arrangements satisfactory to the Indenture
                        Trustee for the giving of notice of redemption by the
                        Indenture Trustee in the name, and at the expense, of
                        the Issuer,

and the Issuer, in the case of (i), (ii) or (iii) of this clause (2), has
irrevocably deposited or caused to be irrevocably deposited with the Trust
Collateral Agent cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Class A Notes not theretofore
delivered to the Indenture Trustee for cancellation when due to the Stated Final
Maturity or Redemption Date (if Class A Notes shall have been called for
redemption pursuant to Section 10.1(a)), as the case may be;

                  (B) the Issuer has paid or caused to be paid all Issuer
            Secured Obligations;

                  (C) the Issuer has delivered to the Indenture Trustee, the
            Class A Insurer and the Backup Insurer an Officer's Certificate, an
            Opinion of Counsel and if required by the Indenture Trustee or the
            Controlling Party an Independent Certificate from a firm of
            certified public accountants, each meeting the applicable
            requirements of Section 11.1(a) and each stating that all conditions
            precedent herein provided for relating to the satisfaction and
            discharge of this Indenture have been complied with; and

                  (D) upon the satisfaction and discharge of the Indenture
            pursuant to this Section 4.1, the Indenture Trustee shall deliver to
            the Owner Trustee, the Class A Insurer and the Backup Insurer a
            certificate of a Responsible Officer stating that the Class A
            Noteholders, the Class A Insurer, the Backup Insurer and the
            Indenture Trustee have been paid all amounts owed to them.

            SECTION 4.2. Application of Trust Money.

All moneys deposited with the Indenture Trustee pursuant to Section 4.1 hereof
shall be held in trust and applied by it, in accordance with the provisions of
the Class A Notes and this Indenture, to the payment, either directly or through
any Paying Agent, as the Indenture Trustee may determine, to the Holders of the
particular Class A Notes for the payment or redemption of which such moneys have
been deposited with the Indenture Trustee, of all sums due and to become due
thereon for principal and interest; but such moneys need not be segregated from
other funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.

            SECTION 4.3. Repayment of Moneys Held by Paying Agent.

In connection with the satisfaction and discharge of this Indenture with respect
to the Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions  of

                                     - 26 -
<PAGE>

this Indenture with respect to such Class A Notes shall, upon demand of the
Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.3 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.

                                    ARTICLE V

                                    Remedies

            SECTION 5.1. Indenture Events of Default.

"Indenture Event of Default", wherever used herein or in the other Basic
Documents, means any one of the following events (whatever the reason for such
Indenture Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental
body):

                  (i) default by the Issuer in the payment of any interest on
      the Class A Notes when the same becomes due and payable, and such default
      shall continue for a period of five (5) days or more (it being understood
      that any payment by the Class A Insurer under the Class A Note Insurance
      Policy or by the Backup Insurer under the Backup Insurance Policy shall
      not constitute payment by the Issuer); or

                  (ii) default by the Issuer in the payment of the principal of
      or any installment of the principal of the Class A Notes when the same
      becomes due and payable on the Stated Final Maturity (it being understood
      that any payment by the Class A Insurer under the Class A Note Insurance
      Policy or by the Backup Insurer under the Backup Insurance Policy shall
      not constitute payment by the Issuer); or

                  (iii) default in the observance or performance of any covenant
      or agreement of the Issuer made under this Indenture (other than a
      covenant or agreement, a default in the observance or performance of which
      is specifically dealt with elsewhere in this Section 5.1), or any
      representation or warranty of the Issuer made in this Indenture or in any
      certificate or other writing delivered pursuant to this Indenture or in
      connection with this Indenture proving to have been incorrect in any
      material respect as of the time when the same shall have been made, and
      such default shall continue or not be cured, or the circumstance or
      condition in respect of which such misrepresentation or warranty was
      incorrect shall not have been eliminated or otherwise cured, for a period
      of 30 days (or a longer period, not in excess of 60 days as may be
      reasonably necessary to remedy such default, if the default is capable of
      remedy within 60 days or less, and the Servicer, on behalf of the Issuer,
      delivers an officer's certificate to the Indenture Trustee to the effect
      that the Issuer has commenced, or will promptly commence and diligently
      pursue, all reasonable efforts to remedy the default) after there shall
      have been given to the Issuer by either Insurer, or if both a Class A
      Insurer Default and a Backup Insurer Default have occurred and are
      continuing, the Indenture Trustee at the direction of Class A Noteholders
      representing at least 25% of the outstanding Class A Note Balance, a
      written notice specifying such default or incorrect representation or
      warranty

                                     - 27 -
<PAGE>

      and requiring it to be remedied and stating that such notice is a "Notice
      of Default" pursuant to this Indenture; or

                  (iv) the filing of a decree or order for relief by a court
      having jurisdiction in the premises in respect of the Seller, the Issuer
      or any substantial part of the Trust Property in an involuntary case under
      any applicable Federal or state bankruptcy, insolvency or other similar
      law now or hereafter in effect, or appointing a receiver, liquidator,
      assignee, custodian, trustee, sequestrator or similar official of the
      Seller or the Issuer, as applicable, or for any substantial part of the
      Trust Property, or ordering the winding-up or liquidation of the Seller's
      affairs or the Issuer's affairs, as applicable, and such decree or order
      shall remain unstayed and in effect for a period of 60 consecutive days;
      or

                  (v) the commencement by the Seller or the Issuer of a
      voluntary case under any applicable federal or state bankruptcy,
      insolvency or other similar law now or hereafter in effect, or the consent
      by the Issuer to the entry of an order for relief in an involuntary case
      under any such law, or the consent by the Issuer to the appointment or
      taking possession by a receiver, liquidator, assignee, custodian, trustee,
      sequestrator or similar official of the Seller or Issuer, as applicable,
      or for any substantial part of the Trust Property, or the making by the
      Seller or Issuer, as applicable, of any general assignment for the benefit
      of creditors, or the failure by the Seller or Issuer, as applicable,
      generally to pay its debts as such debts become due, or the taking of
      action by the Issuer in furtherance of any of the foregoing; or

                  (vi) a draw is made on either the Class A Note Insurance
      Policy or the Backup Insurance Policy; or

                  (vii) cumulative Collections through the end of the related
      Collection Period, expressed as a percentage of the cumulative Forecasted
      Collections through the end of the related Collection Period, is less than
      65.0% for any three (3) consecutive Collection Periods; or

                  (viii) the Seller sells or otherwise transfers ownership of
      the Certificate except as permitted by the Basic Documents; or

                  (ix) the Seller, fails to observe or perform in any material
      respect any of its separateness or limited purpose covenants in the Basic
      Documents to which it is a party (after notice and after giving effect to
      any applicable grace periods set forth therein) or its organizational
      documents; or

                  (x) the Indenture Trustee ceases to have a valid and perfected
      first priority security interest in the Trust Property and such failure
      has not been remedied within ten (10) Business Days; or

                  (xi) any Transaction Document (in its entirety) ceases to be
      in full force and effect.

            SECTION 5.2. Rights Upon Indenture Event of Default.

                                     - 28 -
<PAGE>

            (a) If an Indenture Event of Default described in clause (iv) or (v)
of Section 5.1 shall have occurred, the entire unpaid principal balance of the
Class A Notes, all interest accrued and unpaid thereon and all other amounts
payable under this Indenture and the Basic Documents shall automatically become
immediately due and payable. If any other Indenture Event of Default shall have
occurred, the Indenture Trustee, if so requested in writing by: (x) the
Controlling Party, or (y) if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, shall
declare by written notice to the Issuer that the entire principal balance of the
Class A Notes, all interest accrued and unpaid thereon and all other amounts
payable under this Indenture and the other Basic Documents to be immediately due
and payable.

            (b) If an Indenture Event of Default occurs and the Class A Notes
have been accelerated, the Indenture Trustee may exercise any of the remedies
specified in Section 5.4(a). Payments in accordance with Section 5.2(a) hereof
following acceleration of the Class A Notes shall be applied by the Indenture
Trustee:

            FIRST: (x) pro rata, to the Servicer or the Backup Servicer, the
      Servicing Fee and any indemnification amounts owed to the Backup Servicer,
      and to the Trust Collateral Agent, the Indenture Trustee and the Owner
      Trustee, their related accrued and unpaid fees, indemnification amounts
      and expenses and (y) to any successor servicer, any unpaid Transition
      Expenses which may be due to it pursuant to the terms of the Sale and
      Servicing Agreement;

            SECOND: to Class A Noteholders for amounts due and unpaid on the
      Class A Notes for interest, ratably, without preference or priority of any
      kind, according to the amounts due and payable on the Class A Notes for
      interest;

            THIRD: to each Insurer, in accordance with the terms of the
      Insurance Agreement, its respective Premium due pursuant to the Insurance
      Agreement;

            FOURTH: to Class A Noteholders for amounts due and unpaid on the
      Class A Notes for principal, ratably, without preference or priority of
      any kind, according to the amounts due and payable on the Class A Notes
      for principal until the Class A Note Balance has been reduced to zero; and

            FIFTH: to each Insurer, in accordance with the terms of the
      Insurance Agreement, its respective Reimbursement Obligations.

            (c) At any time after declaration of acceleration of maturity has
been made in accordance with Section 5.2(a) hereof and before a judgment or
decree for payment of the money due has been obtained by the Indenture Trustee
as hereinafter in this Article V provided, the Controlling Party, or the
Majority Noteholders, as the case may be, by written notice to the Issuer and
the Indenture Trustee, may rescind and annul such declaration and its
consequences if:

                  (i) the Issuer has paid or deposited with the Indenture
      Trustee a sum sufficient to pay:

                                     - 29 -
<PAGE>

                  (A) all payments of principal of and interest on all Class A
            Notes and all other amounts that would then be due hereunder or upon
            such Class A Notes if the Indenture Event of Default giving rise to
            such acceleration had not occurred, which funds shall be deposited
            into the Note Distribution Account;

                  (B) all sums paid or advanced by the Indenture Trustee
            hereunder and the reasonable compensation, expenses, disbursements
            and advances of the Indenture Trustee and its agents and counsel,
            which funds shall be deposited into the Collection Account; and

                  (C) all sums (including any Premium) paid or advanced by or
            due to the Class A Insurer and the Backup Insurer, which funds shall
            be paid to the Class A Insurer or the Backup Insurer in accordance
            with the terms of the Insurance Agreement; and

                  (ii) all Indenture Events of Default, other than the
      nonpayment of the interest on or the principal of the Class A Notes that
      has become due solely by such acceleration, have been cured or waived as
      provided in Section 5.12.

            No such rescission shall affect any subsequent default or impair any
right consequent thereto.

            (d) In the event the Class A Notes have been accelerated in
accordance with Section 5.2(a) hereof, each Insurer shall have the right, but
not the obligation, to make payments under the Class A Note Insurance Policy or
Backup Insurance Policy, as applicable, or otherwise, of principal and interest
due on the Class A Notes, in whole or in part, on any date or dates following
such acceleration, as such Insurer, in its sole discretion, may elect.

            SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.

            (a) The Issuer hereby irrevocably and unconditionally appoints the
Indenture Trustee as the true and lawful attorney-in-fact of the Issuer, with
full power of substitution, to execute, acknowledge and deliver any notice,
document, certificate, paper, pleading or instrument and to do in the name of
the Indenture Trustee as well as in the name, place and stead of the Issuer such
acts, things and deeds for or on behalf of and in the name of the Issuer under
this Indenture (including specifically under Section 5.4) and under the Basic
Documents which the Issuer could or might do or which may be necessary,
desirable or convenient in the Indenture Trustee's sole discretion to effect the
purposes contemplated hereunder and under the Basic Documents and, without
limitation, following the occurrence of an Indenture Event of Default, acting at
the instruction or with the consent of the Controlling Party or, if both a Class
A Insurer Default and a Backup Insurer Default have occurred and are continuing,
the Majority Noteholders, in accordance with the terms of Article V hereof,
exercise full right, power and authority to take, or defer from taking, any and
all acts with respect to the administration, maintenance or disposition of the
Trust Property.

            (b) Notwithstanding anything to the contrary contained in this
Indenture (including, without limitation, Sections 5.4(a), 5.12, 5.13 and 5.16),
the Indenture Trustee, prior

                                     - 30 -
<PAGE>

to the Class A Termination Date, may with the prior written consent of the
Controlling Party or, if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, or shall, at
the direction of the Controlling Party or, if both a Class A Insurer Default and
a Backup Insurer Default have occurred and are continuing, the Majority
Noteholders, and thereafter may at its discretion, proceed to protect and
enforce its rights and the rights of the Class A Noteholders, the Class A
Insurer and the Backup Insurer by such appropriate proceedings as the Indenture
Trustee or the Controlling Party (or the Majority Noteholders, if applicable)
shall deem most effective to protect and enforce any such rights, whether for
specific performance of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Indenture Trustee by this Indenture or
by law.

            (c) In case there shall be pending, relative to the Issuer or any
other obligor upon the Class A Notes or any Person having or claiming an
ownership interest in the Trust Property, proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Issuer or its property or
such other obligor or Person, or in case of any other comparable judicial
proceedings relative to the Issuer or other obligor upon the Class A Notes, or
to the creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Class A Notes shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, at
the expense of the Seller by intervention in such proceedings or otherwise:

                  (i) to file and prove a claim or claims for the whole amount
      of principal and interest owing and unpaid in respect of the Class A Notes
      and to file such other papers or documents as may be necessary or
      advisable in order to have the claims of the Indenture Trustee (including
      any claim for reasonable compensation to the Indenture Trustee and each
      predecessor Indenture Trustee, and their respective agents, attorneys and
      counsel, and for reimbursement of all expenses and liabilities incurred,
      and all advances made, by the Indenture Trustee and each predecessor
      Indenture Trustee, except as a result of negligence, bad faith or willful
      misconduct), the Class A Insurer, the Backup Insurer and of the Class A
      Noteholders allowed in such proceedings;

                  (ii) unless prohibited by applicable law and regulations, to
      vote on behalf of the Holders of Class A Notes in any election of a
      trustee, a standby trustee or person performing similar functions in any
      such proceedings;

                  (iii) to collect and receive any moneys or other property
      payable or deliverable on any such claims and to distribute all amounts
      received with respect to the claims of the Class A Noteholders, the Class
      A Insurer, the Backup Insurer and the Indenture Trustee on their behalf;
      and

                                     - 31 -
<PAGE>

                  (iv) to file such proofs of claim and other papers or
      documents as may be necessary or advisable in order to have the claims of
      the Indenture Trustee, the Class A Insurer, the Backup Insurer or the
      Holders of Class A Notes allowed in any judicial proceedings relative to
      the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Class A Noteholders to
make payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Class A
Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence,
bad faith or willful misconduct.

            (d) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Class A Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Class A Notes or the rights of any
Holder thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any Class A Noteholder in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar person.

            (e) All rights of action and of asserting claims under this
Indenture or under any of the Class A Notes, may be enforced by the Indenture
Trustee without the possession of any of the Class A Notes or the production
thereof in any trial or other proceedings relative thereto, and any such action
or proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Class A Notes,
the Class A Insurer and the Backup Insurer.

            (f) In any proceedings brought by the Indenture Trustee (and also
any proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee shall be held to represent all the Holders of
the Class A Notes, and it shall not be necessary to make any Class A Noteholder
a party to any such proceedings.

            SECTION 5.4. Remedies.

            (a) If an Indenture Event of Default shall have occurred and be
continuing, the Controlling Party or the Indenture Trustee at the written
direction of the Controlling Party or, if both a Class A Insurer Default and
Backup Insurer Default have occurred and are continuing, the Majority
Noteholders may do any one or more of the following:

                  (i) institute Proceedings in its own name and as trustee of an
      express trust for the collection of all amounts then payable to the Class
      A Insurer and the Backup Insurer or on the Class A Notes or under this
      Indenture with respect thereto, whether by declaration or otherwise,
      enforce any judgment obtained, and collect from the Issuer and any other
      obligor upon such Class A Notes moneys adjudged due;

                                     - 32 -
<PAGE>

                  (ii) institute Proceedings from time to time for the complete
      or partial foreclosure of this Indenture with respect to the Trust
      Property;

                  (iii) exercise any remedies of a secured party under the UCC
      and take any other appropriate action to protect and enforce the rights
      and remedies of the Indenture Trustee, the Holders of the Class A Notes,
      the Class A Insurer and the Backup Insurer; and

                  (iv) direct the Indenture Trustee to sell the Trust Property
      or any portion thereof or rights or interest therein, at one or more
      public or private sales called and conducted in any manner permitted by
      law; provided, however, that the Indenture Trustee shall not, and shall
      not be directed by the Controlling Party or the Majority Noteholders, as
      the case may be, to, sell or otherwise liquidate the Trust Property
      following an Indenture Event of Default unless:

                  (A) the proceeds of such sale or liquidation distributable to
            the Class A Noteholders, together with amounts to be paid to the
            Insurers concurrently therewith, are anticipated to be sufficient to
            discharge in full all amounts then due and unpaid upon the Class A
            Notes for principal and interest due thereon, in the event such
            direction is from the Controlling Party; or

                  (B) in the event that both a Class A Insurer Default and a
            Backup Insurer Default have occurred and are continuing, the
            Indenture Trustee, if so directed by the Majority Holders in
            accordance with the terms of this Indenture, may not sell or
            otherwise liquidate the Trust Property following an Indenture Event
            of Default unless:

                        (I) such Indenture Event of Default is of the type
                  described in Section 5.1(iv) or (v),

                        (II) such Indenture Event of Default is of the type
                  described in any other clause of Section 5.1 and the Class A
                  Noteholders consent thereto in writing, or

                        (III) either (i) the proceeds of such sale or
                  liquidation would be in an amount sufficient to discharge in
                  full all amounts then due and unpaid upon such Class A Notes
                  for principal and interest or (ii) the Indenture Trustee
                  determines that the Trust Property will not continue to
                  provide sufficient funds for the payment of principal of and
                  interest on the Class A Notes as they would have become due if
                  they had not been declared due and payable (it being
                  understood that for purposes of making such a determination,
                  the Indenture Trustee may conclusively rely on an independent
                  auditor);

provided, however, that, subject to Section 6.1, the Indenture Trustee shall
have the right to decline to follow any such direction if it, being advised by
counsel, determines that the action so directed may not lawfully be taken, or if
it, in good faith shall, by a Responsible Officer, determine that the
proceedings so directed would be illegal or subject it to personal liability.

                                     - 33 -
<PAGE>

            (b) If the Indenture Trustee sells all or a portion of the Trust
Property, following an Indenture Event of Default, the Trust Collateral Agent
shall give Credit Acceptance at least ten (10) days' prior notice of such sale,
and Credit Acceptance may, but is not required to, make a bid for the portion,
or all, of the Trust Property being sold by the Indenture Trustee.

            SECTION 5.5. Optional Preservation of the Trust Property.

If the Class A Notes have been declared to be due and payable under Section 5.2
following an Indenture Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee may,
with the prior written consent of the Controlling Party or, if both a Class A
Insurer Default and a Backup Insurer Default have occurred and are continuing,
the Majority Noteholders, but need not unless directed in writing by the
Controlling Party or, if both a Class A Insurer Default and Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, maintain
possession of the Trust Property which is in its possession and elect to direct
the Trust Collateral Agent to maintain possession of the Trust Property which is
in the possession of the Trust Collateral Agent. It is the desire of the parties
hereto and the Class A Noteholders that there be at all times sufficient funds
for the payment of principal of and interest on the Class A Notes, and the
Controlling Party, or the Majority Noteholders, as the case may be, shall take
such desire into account when determining whether or not to direct the Indenture
Trustee or the Trust Collateral Agent, as applicable, to maintain possession of
the Trust Property. In determining whether to direct the Indenture Trustee or
the Trust Collateral Agent, as applicable, to obtain possession of the Trust
Property, the Controlling Party, or the Majority Noteholders, as the case may
be, may, but need not maintain and conclusively rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Property for such purpose.

            SECTION 5.6. [Reserved].

            SECTION 5.7. Limitation of Suits.

Subject to Section 5.8 and Section 6.8, no Holder of any Class A Note shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:

                  (i) such Holder has previously given written notice to the
      Indenture Trustee of a continuing Indenture Event of Default;

                  (ii) (A) the Indenture Event of Default arises from the
      Seller's or the Servicer's failure to remit payments under the Sale and
      Servicing Agreement when due or (B) the Majority Noteholders shall have
      made written request to the Indenture Trustee to institute such proceeding
      in respect of such Indenture Event of Default in its own name as Indenture
      Trustee hereunder;

                  (iii) such Holder or Holders have offered to the Indenture
      Trustee indemnity reasonably satisfactory to it against the costs,
      expenses and liabilities to be incurred in complying with such request;

                                     - 34 -
<PAGE>

                  (iv) the Indenture Trustee for 30 days after its receipt of
      such notice, request and offer of indemnity has failed to institute such
      proceedings;

                  (v) no direction inconsistent with such written request has
      been given to the Indenture Trustee during such 30-day period; and

                  (vi) the Controlling Party has given its prior written
      consent.

it being understood and intended that no one or more Holders of Class A Notes
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
Class A Noteholders.

            In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Class
A Notes, each representing less than a majority of the Outstanding Amount of the
Class A Notes, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.

            SECTION 5.8. Unconditional Rights of Noteholders To Receive
Principal and Interest.

Notwithstanding any other provisions in this Indenture, the Holder of any Class
A Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Class A Note on or
after the respective due dates thereof expressed in such Class A Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.

            SECTION 5.9. Restoration of Rights and Remedies.

If the Indenture Trustee, the Class A Insurer, the Backup Insurer or any Class A
Noteholder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Indenture Trustee, the Class A
Insurer, the Backup Insurer or such Class A Noteholder, then and in every such
case the Issuer, the Indenture Trustee, the Class A Insurer, the Backup Insurer
and the Class A Noteholders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee, the
Class A Insurer, the Backup Insurer and the Class A Noteholders shall continue
as though no such proceeding had been instituted.

            SECTION 5.10. Rights and Remedies Cumulative.

Except as provided in Section 5.7, no right or remedy herein conferred upon or
reserved to the Indenture Trustee, the Class A Insurer, the Backup Insurer or
the Class A Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the

                                     - 35 -
<PAGE>

extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

            SECTION 5.11. Delay or Omission Not a Waiver.

No delay or omission of the Indenture Trustee, the Class A Insurer, the Backup
Insurer or any Holder of any Class A Note to exercise any right or remedy
accruing upon any Indenture Default or Indenture Event of Default shall impair
any such right or remedy or constitute a waiver of any such Indenture Default or
Indenture Event of Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee, the Class A Insurer,
the Backup Insurer or to the Class A Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee, the
Class A Insurer, the Backup Insurer or by the Class A Noteholders, as the case
may be.

            SECTION 5.12. Control by the Controlling Party.

Prior to the Class A Termination Date, the Controlling Party, so long as both a
Class A Insurer Default and a Backup Insurer Default have not occurred and are
not continuing, shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee with
respect to the Class A Notes or exercising any trust or power conferred on the
Indenture Trustee;

provided, however, that, the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such direction;
and subject to Section 6.1, the Indenture Trustee shall have the right to
decline to follow any direction of the Controlling Party if the Indenture
Trustee being advised by counsel determines that the action so directed may not
lawfully be taken, or if the Indenture Trustee in good faith shall, by a
Responsible Officer, determine that the proceedings so directed would be illegal
or subject it to personal liability or be unduly prejudicial to the rights of
Class A Noteholders not parties to such direction.

            SECTION 5.13. Undertaking for Costs.

All parties to this Indenture agree, and each Holder of any Class A Note by such
Holder's acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Indenture Trustee for
any action taken, suffered or omitted by it as Indenture Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant.

            SECTION 5.14. Waiver of Stay or Extension Laws.

The Issuer covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the

                                     - 36 -
<PAGE>

covenants or the performance of this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

            SECTION 5.15. Action on Class A Notes.

The Indenture Trustee's right to seek and recover judgment on the Notes or under
this Indenture shall not be affected by the seeking, obtaining or application of
any other relief under or with respect to this Indenture. Neither the lien of
this Indenture nor any rights or remedies of the Indenture Trustee or the Class
A Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Trust Property or upon any of the assets of the Issuer.

            SECTION 5.16. Performance and Enforcement of Certain Obligations.

            (a) Promptly following a request from the Indenture Trustee or the
Controlling Party or, if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, to do so and
at the Issuer's expense, the Issuer agrees to take all such lawful action as the
Indenture Trustee or the Controlling Party, as the case may be, may request to
compel or secure the performance and observance by the Seller and the Servicer,
as applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement in accordance with the terms thereof, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee, or
prior to the Class A Termination Date, the Controlling Party, including the
transmission of notices of default on the part of the Seller or the Servicer
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by the Seller or the Servicer of each of their
obligations under the Sale and Servicing Agreement.

            (b) If an Indenture Event of Default has occurred, the Indenture
Trustee may, with the prior written consent of the Controlling Party or, if both
a Class A Insurer Default and a Backup Insurer Default have occurred and are
continuing, the Majority Noteholders, but need not unless directed in writing by
the Controlling Party or, if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Sale and Servicing Agreement,
including the right or power to take any action to compel or secure performance
or observance by the Seller or the Servicer of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement, and any right of the
Issuer to take such action shall be suspended.

            SECTION 5.17. Subrogation. Any and all proceeds of claims paid by
the Class A Insurer or the Backup Insurer under the Class A Note Insurance
Policy or the Backup Insurance Policy, as the case may be, and disbursed by the
Indenture Trustee or the Trust Collateral Agent shall not be considered payment
by the Issuer with respect to the Class A Notes,

                                     - 37 -
<PAGE>

and shall not discharge the obligations of the Issuer with respect thereto. The
Class A Insurer or the Backup Insurer, as the case may be, shall, to the extent
it makes any payment with respect to the Class A Notes, become subrogated to the
rights of the recipients of such payments to the extent of such payments.
Subject to and conditioned upon any payment with respect to the Class A Notes by
or on behalf of either the Class A Insurer or the Backup Insurer, each Class A
Noteholder shall be deemed, without further action, to have directed the
Indenture Trustee or the Trust Collateral Agent to assign to the Insurer which
made such payment all rights to the payment of interest or principal with
respect to the Class A Notes which are then due for payment to the extent of all
payments made by such Insurer and such Insurer may exercise any option, vote,
right, power or the like with respect to the Class A Notes to the extent that it
has made payment pursuant to the Class A Note Insurance Policy or the Backup
Insurance Policy, as the case may be. To evidence such subrogation, the Note
Registrar shall note such Insurer's rights as subrogee upon the Class A Note
Register upon receipt from such Insurer of proof of payment by the Insurer of
any Class A Interest Distributable Amount or Class A Principal Distributable
Amount.

                                   ARTICLE VI

                              The Indenture Trustee

            SECTION 6.1. Duties of Indenture Trustee.

            (a) If an Indenture Event of Default has occurred and is continuing,
the Indenture Trustee shall follow such instructions and directions as it may
receive pursuant to Section 5.2 hereof and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.

            (b) Except during the continuance of an Indenture Event of Default:

                  (i) the Indenture Trustee undertakes to perform such duties
      and only such duties as are specifically set forth in this Indenture and
      the Basic Documents and no implied covenants or obligations shall be read
      into this Indenture or the Basic Documents against the Indenture Trustee;
      and

                  (ii) in the absence of bad faith, the Indenture Trustee may
      conclusively rely, as to the truth of the statements and the correctness
      of the opinions expressed therein, upon certificates or opinions furnished
      to the Indenture Trustee and conforming to the requirements of this
      Indenture and the Basic Documents; however, the Indenture Trustee shall
      examine the certificates and opinions to determine whether or not they
      conform on their face to the requirements of this Indenture and the Basic
      Documents.

            (c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own bad faith or
willful misconduct, except that:

                  (i) this paragraph does not limit the effect of paragraph (b)
      of this Section;

                                     - 38 -
<PAGE>

                  (ii) the Indenture Trustee shall not be liable for any error
      of judgment made in good faith by a Responsible Officer of the Indenture
      Trustee unless it is proved that the Indenture Trustee was negligent in
      ascertaining the pertinent facts; and

                  (iii) the Indenture Trustee shall not be liable with respect
      to any action it takes or omits to take in good faith in accordance with a
      direction received by it pursuant to Section 5.12.

            (d) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture.

            (e) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur liability (financial
or otherwise) in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to
believe that repayment of such funds or indemnity satisfactory to it against
such risk or liability is not reasonably assured to it.

            (f) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section.

            (g) Without limiting the generality of this Section, the Indenture
Trustee shall have no duty (A) to see to any recording, filing or depositing of
this Indenture or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest in the Financed Vehicles,
or to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance on the Financed Vehicles or Obligors or to effect or maintain any such
insurance, (C) to see to the payment or discharge of any tax, assessment or
other governmental charge or any Lien or encumbrance of any kind owing with
respect to, assessed or levied against any part of the Trust, (D) to confirm or
verify the contents of any reports or certificates delivered to the Indenture
Trustee pursuant to this Indenture or the Sale and Servicing Agreement believed
by the Indenture Trustee to be genuine and to have been signed or presented by
the proper party or parties, or (E) to inspect the Financed Vehicles at any time
or ascertain or inquire as to the performance or observance of any of the
Issuer's, the Seller's or the Servicer's representations, warranties or
covenants or the Servicer's duties and obligations as Servicer and as custodian
of the original Certificates of Title of the Financed Vehicles under the Sale
and Servicing Agreement.

            (h) In no event shall JPMorgan Chase Bank, in any of its capacities
hereunder, be deemed to have assumed any duties of the Owner Trustee under the
Delaware Statutory Trust Act, common law, or the Trust Agreement.

            (i) The Indenture Trustee shall, upon reasonable prior written
notice to the Indenture Trustee by the Class A Insurer or the Backup Insurer,
permit any representative of the Class A Insurer or the Backup Insurer, during
the Indenture Trustee's normal business hours, at its offices, to examine all
books of account, records, reports and other papers of the Indenture Trustee
relating to the Class A Notes or the Collateral, to make copies and extracts
therefrom and

                                     - 39 -
<PAGE>

to discuss the Indenture Trustee's affairs and actions, as such affairs and
actions relate to the Indenture Trustee's duties with respect to the Class A
Notes or the Collateral, with the Indenture Trustee's officers and employees
responsible for carrying out the Indenture Trustee's duties with respect to the
Collateral or the Class A Notes. Any expenses incurred in connection with such
examination shall be payable by the Issuer to the Class A Insurer, the Backup
Insurer or the Indenture Trustee, as applicable, in accordance with Section
5.08(a) of the Sale and Servicing Agreement.

            (j) The Indenture Trustee shall, and agrees that it will hold any
proceeds of any claim under the Class A Note Insurance Policy or Backup
Insurance Policy in trust, solely for the use and benefit of the Class A
Noteholders.

            SECTION 6.2. Rights of Indenture Trustee.

            Except as otherwise provided in Section 6.1:

            (a) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate and/or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.

            (b) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and shall not be responsible for
the misconduct or negligence of any agent, attorney, custodian or nominee
appointed with due care.

            (c) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Indenture Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.

            (d) The Indenture Trustee shall not be deemed to have knowledge of
an Indenture Event of Default unless a Responsible Officer of the Indenture
Trustee has actual knowledge or has received written notice of such Indenture
Event of Default.

            (e) The Indenture Trustee may consult with counsel, and the written
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Class A Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the written advice or opinion
of such counsel.

            (f) The Indenture Trustee shall be under no obligation to exercise
any of the rights and powers vested in it by this Indenture or the other Basic
Documents, or to institute, conduct or defend any litigation under this
Indenture or in relation to this Indenture, at the request, order or direction
of any of the Holders of Class A Notes, pursuant to the provisions of this
Indenture, unless it shall have been offered security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities that may be
incurred therein or thereby; provided, however, that the Indenture Trustee
shall, upon the occurrence of an Indenture Event of Default

                                     - 40 -
<PAGE>

(that has not been cured), exercise the rights and powers vested in it by this
Indenture with the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs.

            (g) Except during the continuance of an Indenture Event of Default,
the Indenture Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Majority Noteholders or
the Controlling Party; provided, however, that if the payment within a
reasonable time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require indemnity reasonably satisfactory to the Indenture
Trustee against such cost, expense or liability as a condition to so proceeding;
the reasonable expense of every such examination shall be paid by the requesting
Holders or the instructing party, as the case may be, or, if paid by the
Indenture Trustee, shall be reimbursed by the requesting Holders or the
instructing party, as the case may be, upon demand.

            (h) In no event shall the Indenture Trustee be liable for any
indirect, consequential, punitive or special damages, regardless of the form of
action and whether or not any such damages were foreseeable or contemplated.

            (i) Delivery of any reports, information and documents to the
Indenture Trustee provided for herein is for informational purposes only (unless
otherwise expressly stated herein) and the Indenture Trustee's receipt of such
shall not constitute constructive knowledge of any information contained therein
or determinable from information contained therein, including the Issuer's
compliance with any of its representations, warranties or covenants hereunder
(as to which the Indenture Trustee is entitled to rely exclusively on Officers'
Certificates).

            (j) The Indenture Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.

            (k) In the event the Indenture Trustee is also acting in the
capacity of Paying Agent, transfer agent or Note Registrar, it shall be afforded
all of the rights, protections, immunities and indemnities afforded to the
Indenture Trustee hereunder in each of its capacities hereunder.

            (l) In no event shall the Indenture Trustee be liable for any act or
omission on the part of the Issuer, the Seller or the Servicer or any other
Person. The Indenture Trustee shall not be responsible for monitoring or
supervising the Issuer, the Seller or the Servicer.

            SECTION 6.3. Individual Rights of Indenture Trustee.

The Indenture Trustee in its individual or any other capacity may become the
owner or pledgee of Class A Notes and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Indenture Trustee.
Any Paying Agent, Note Registrar, co-registrar or

                                     - 41 -
<PAGE>

co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Section 6.15.

            SECTION 6.4. Indenture Trustee's Disclaimer.

The Indenture Trustee shall not be responsible for and makes no representation
as to the validity, sufficiency or adequacy of this Indenture, the Trust
Property or the Class A Notes, shall not be accountable for the Issuer's use of
the proceeds from the Class A Notes, and shall not be responsible for any
statement of the Issuer in the Indenture or in any document issued in connection
with the sale of the Class A Notes or in the Class A Notes other than, the
Indenture Trustee's certificate of authentication.

            SECTION 6.5. Notice of Indenture Events of Default.

If an Indenture Event of Default occurs and is continuing and if written notice
of the existence thereof has been delivered to a Responsible Officer of the
Indenture Trustee or a Responsible Officer of the Indenture Trustee has actual
knowledge thereof, the Indenture Trustee shall mail to the Class A Insurer, the
Backup Insurer, the Rating Agencies and each Class A Noteholder notice of the
Indenture Event of Default within five (5) Business Days after such knowledge or
notice occurs.

            SECTION 6.6. Reports by Indenture Trustee to Holders.

The Indenture Trustee shall on behalf of the Issuer deliver to each Class A
Noteholder such information as may be reasonably required to enable such Holder
to prepare its federal and state income tax returns. Such obligation shall be
satisfied if the Indenture Trustee provides such Class A Noteholder a form 1099.

            SECTION 6.7. Compensation.

            (a) The Issuer shall pay to the Indenture Trustee from time to time
compensation for its services as agreed in writing and in accordance with
Section 5.08(a) of the Sale and Servicing Agreement. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services, except any such
expense as may be attributable to its willful misconduct, negligence or bad
faith. Such expenses shall include securities transaction charges relating to
the investment of funds (net of investment earnings) on behalf of the Indenture
Trustee or the Trust Collateral Agent on deposit in the Trust Accounts (except
for the Certificate Distribution Account) and the reasonable compensation and
reasonable expenses, disbursements and advances of the Indenture Trustee's
counsel and of all persons not regularly in its employ; provided, however, that
the securities transaction charges referred to above shall, in the case of
certain Eligible Investments selected by the Servicer, be waived for a
particular investment in the event that any amounts are received by the Trust
Collateral Agent from a financial institution in connection with the purchase of
such Eligible Investments. The Issuer agrees to indemnify the Indenture Trustee
and Trust Collateral Agent as set forth in Section 6.05 of the Sale and
Servicing Agreement. The Indenture Trustee agrees that its recourse to the
Issuer, the Seller and the Trust Property shall be limited to the right to
receive

                                     - 42 -
<PAGE>

distributions in accordance with Section 5.08(a) of the Sale and Servicing
Agreement and Article V hereof and shall not be recourse to the assets of any
Class A Noteholder.

            (b) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture and the
earlier resignation or removal of the Indenture Trustee. When the Indenture
Trustee incurs expenses after the occurrence of an Indenture Event of Default
specified in Section 5.1(iv) or (v) with respect to the Issuer, the expenses are
intended to constitute expenses of administration under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
similar law. Notwithstanding anything else set forth in this Indenture or the
Basic Documents, the Indenture Trustee agrees that the obligations of the Issuer
to the Indenture Trustee hereunder and under the Basic Documents shall not be
recourse to the assets of any Class A Noteholder.

            SECTION 6.8. Replacement of Indenture Trustee.

            (a) The Indenture Trustee may resign at any time by so notifying the
Issuer, the Class A Insurer and the Backup Insurer in writing at least sixty
days prior and upon the appointment and assumption of its obligations by a
successor Indenture Trustee which shall be acceptable to the Controlling Party
if such succession occurs prior to the Class A Termination Date.

            (b) The Issuer, prior to the Class A Termination Date with the prior
written consent of the Controlling Party, may remove the Indenture Trustee by
written notice if:

                  (i) the Indenture Trustee fails to comply with Section 6.17
      hereof;

                  (ii) a court having jurisdiction in the premises in respect of
      the Indenture Trustee in an involuntary case or proceeding under federal
      or state banking or bankruptcy laws, as now or hereafter constituted, or
      any other applicable federal or state bankruptcy, insolvency or other
      similar law, shall have entered a decree or order granting relief or
      appointing a receiver, liquidator, assignee, custodian, trustee,
      conservator, sequestrator (or similar official) for the Indenture Trustee
      or for any substantial part of the Indenture Trustee's property, or
      ordering the winding-up or liquidation of the Indenture Trustee's affairs;

                  (iii) an involuntary case under the federal bankruptcy laws,
      as now or hereafter in effect, or another present or future federal or
      state bankruptcy, insolvency or similar law is commenced with respect to
      the Indenture Trustee and such case is not dismissed within 60 days;

                  (iv) the Indenture Trustee commences a voluntary case under
      any federal or state banking or bankruptcy laws, as now or hereafter
      constituted, or any other applicable federal or state bankruptcy,
      insolvency or other similar law, or consents to the appointment of or
      taking possession by a receiver, liquidator, assignee, custodian, trustee,
      conservator, sequestrator (or other similar official) for the Indenture
      Trustee or for any substantial part of the Indenture Trustee's property,
      or makes any assignment for the benefit of creditors or fails generally to
      pay its debts as such debts become due or takes any corporate action in
      furtherance of any of the foregoing;

                                     - 43 -
<PAGE>

                  (v) failure to comply with any material covenant hereunder; or

                  (vi) the Indenture Trustee otherwise becomes legally incapable
      of acting.

            (c) The Controlling Party may remove the Indenture Trustee for any
reason by 30 days' prior written notice.

            (d) If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), prior
to the Class A Termination Date the Controlling Party may appoint a successor
Indenture Trustee and if it fails to, the Issuer shall promptly appoint a
successor Indenture Trustee acceptable to the Controlling Party. After the Class
A Termination Date, the Issuer may appoint a successor Indenture Trustee without
the consent of the Controlling Party.

            A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights, powers
and duties of the retiring Indenture Trustee under this Indenture subject to
satisfaction of the Rating Agency Condition. The successor Indenture Trustee
shall mail a notice of its succession to Class A Noteholders, the Class A
Insurer, the Backup Insurer and the Rating Agencies. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

            If a successor Indenture Trustee that is, prior to the Class A
Termination Date, acceptable to the Controlling Party does not take office
within 60 days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee or the Controlling Party may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee that
meets the eligibility requirements set forth in Section 6.12 hereof.

            If the Indenture Trustee fails to comply with Section 6.15, any
Noteholder, prior to the Class A Termination Date with the prior written consent
of the Controlling Party, may petition any court of competent jurisdiction for
the removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee acceptable to the Controlling Party.

            Any resignation or removal of the Indenture Trustee and appointment
of a successor Indenture Trustee pursuant to any of the provisions of this
Section shall not become effective until acceptance of appointment by the
successor Indenture Trustee acceptable to the Controlling Party pursuant to this
Section 6.8 and payment of all fees and expenses owed to the outgoing Indenture
Trustee by the Servicer and the Issuer.

Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Servicer's obligations under Section 6.7 shall
continue for the benefit of the retiring Indenture Trustee.

                                     - 44 -
<PAGE>

            SECTION 6.9. Successor Indenture Trustee by Merger.

If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation, provided it meets the eligibility requirements of
Section 6.12, without any further act shall be the successor Indenture Trustee.
The Indenture Trustee shall provide the Rating Agencies, the Class A Insurer and
the Backup Insurer written notice of any such transaction.

            In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.

            SECTION 6.10. Appointment of Trust Collateral Agent.

The Issuer and the Indenture Trustee do hereby appoint JPMorgan Chase Bank to
act as the initial trust collateral agent on behalf of the Indenture Trustee and
JPMorgan Chase Bank hereby accepts such appointment.

            SECTION 6.11. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.

            (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust may at the time be located, the Issuer and the
Indenture Trustee acting jointly and at the expense of the Issuer, prior to the
Class A Termination Date with the consent of the Controlling Party, shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Class A Noteholders, the
Class A Insurer and the Backup Insurer, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Issuer and the Indenture Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 6.12 and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.8 hereof.

            (b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:

                  (i) all rights, powers, duties and obligations conferred or
      imposed upon the Indenture Trustee shall be conferred or imposed upon and
      exercised or

                                     - 45 -
<PAGE>

      performed by the Indenture Trustee and such separate trustee or co-trustee
      jointly (it being understood that such separate trustee or co-trustee is
      not authorized to act separately without the Indenture Trustee joining in
      such act), except to the extent that under any law of any jurisdiction in
      which any particular act or acts are to be performed the Indenture Trustee
      shall be incompetent or unqualified to perform such act or acts, in which
      event such rights, powers, duties and obligations (including the holding
      of title to the Trust or any portion thereof in any such jurisdiction)
      shall be exercised and performed singly by such separate trustee or
      co-trustee, but solely at the direction of the Indenture Trustee;

                  (ii) no trustee hereunder shall be personally liable by reason
      of any act or omission of any other trustee hereunder, including acts or
      omissions of predecessor or successor trustees; and

                  (iii) the Indenture Trustee may at any time accept the
      resignation of or remove any separate trustee or co-trustee.

            (c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.

            (d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, dissolve, become insolvent, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Indenture Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.

            SECTION 6.12. Eligibility.

The Indenture Trustee under this Indenture shall at all times be a corporation
or banking association acceptable to the Controlling Party having an office in
the same state as the location of the Corporate Trust Office as specified in
this Indenture; organized and doing business under the laws of such state or the
United States of America; authorized under such laws to exercise corporate trust
powers; having a combined capital and surplus of at least $100,000,000; having
long-term unsecured debt obligations which have at least the Required Long-Term
Debt Rating and subject to supervision or examination by federal or state
authorities. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined

                                     - 46 -
<PAGE>

capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Indenture Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Indenture Trustee shall
resign immediately.

            SECTION 6.13. Trust Collateral Agent to Follow Indenture Trustee's
Directions.

The Indenture Trustee hereby authorizes the Trust Collateral Agent to take such
action on its behalf, and to exercise such rights, remedies, powers and
privileges hereunder, as the Indenture Trustee may direct and as are
specifically authorized to be exercised by the Trust Collateral Agent by the
terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto.

            SECTION 6.14. Representations and Warranties of the Indenture
Trustee.

The Indenture Trustee represents and warrants to the Issuer as follows:

                  (i) The Indenture Trustee is a banking corporation, duly
      organized and validly existing under the laws of New York and is
      authorized and licensed to conduct and engage in a banking and trust
      business under such laws.

                  (ii) The Indenture Trustee has full corporate power,
      authority, and legal right to execute, deliver, and perform this
      Indenture, and has taken all necessary action to authorize the execution,
      delivery, and performance by it of this Indenture and the other Basic
      Documents to which it is a party.

                  (iii) Each of this Indenture, and the other Basic Documents to
      which it is a party, has been duly executed and delivered by the Indenture
      Trustee.

                  (iv) Each of this Indenture, and the other Basic Documents to
      which it is a party, is a legal, valid and binding obligation of the
      Indenture Trustee enforceable in accordance with its terms, subject to the
      effects of bankruptcy, insolvency, reorganization, or other similar laws
      affecting the enforcement of creditors' rights generally and to general
      principles of equity.

                  (v) The execution, delivery and performance of this Indenture,
      and each other Basic Document to which it is a party, by the Indenture
      Trustee will not constitute a violation, to the best of the Indenture
      Trustee's knowledge, with respect to any order or decree of any court or
      any order, regulation or demand of any federal, State, municipal or
      governmental agency binding on the Indenture Trustee, which violation
      might have consequences that would materially and adversely affect the
      performance of its duties under this Indenture.

                  (vi) The execution, delivery and performance of this
      Indenture, and each other Basic Document to which it is a party, by the
      Indenture Trustee do not require any approval or consent of any Person, do
      not conflict with the articles of incorporation or bylaws of the Indenture
      Trustee.

                                     - 47 -
<PAGE>

            SECTION 6.15. Waiver of Setoffs. Each of the Indenture Trustee and
the Trust Collateral Agent hereby expressly waives any and all rights of setoff
that the Indenture Trustee or the Trust Collateral Agent may otherwise at any
time have under applicable law with respect to any Trust Account and agrees that
amounts in the Trust Accounts shall at all times be held and applied solely in
accordance with the provisions hereof and the Sale and Servicing Agreement or
under Article V hereunder.

            SECTION 6.16. Controlling Party. Subject to the terms of Section
11.21 hereof and the definition of "Controlling Party," and unless otherwise
specifically set forth herein, the Indenture Trustee and the Trust Collateral
Agent shall comply with notices and instructions given by the Issuer prior to
the Class A Termination Date only if accompanied by the prior written consent of
the Controlling Party, except that if any Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee and the Trust Collateral Agent
shall act upon and comply with notices and instructions given by the Controlling
Party alone in the place and stead of the Issuer. On or after the Class A
Termination Date, any consent, control and voting rights of the Controlling
Party hereunder shall terminate.

            SECTION 6.17. Disqualification of the Indenture Trustee.

If the Indenture Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act of 1939, as amended, the Indenture Trustee
shall either eliminate such interest or resign to the extent in the manner
provided by and subject to the provisions of this Indenture.

            SECTION 6.18. Authorization and Direction.

The Issuer hereby authorizes and directs the Indenture Trustee to execute the
Basic Documents to which it is a party.

            SECTION 6.19. Action under the Intercreditor Agreement.

Before taking or omitting to take any action under the Intercreditor Agreement,
the Indenture Trustee may request and shall be entitled to receive direction
from the Controlling Party with respect to any action required to be taken by it
thereunder. The Indenture Trustee shall not be required to take any action or
omit to take any action in the absence of such consent.

                                   ARTICLE VII

                         Noteholders' Lists and Reports

            SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and
Addresses of Noteholders.

The Issuer will furnish or cause to be furnished to the Indenture Trustee (a)
not more than five days after each Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Holders as of such Record Date, (b) at such other times as the Indenture Trustee
may request in writing, within 30 days after receipt by the Issuer of any such
request, a list of similar form and content as of a date not more than 10 days
prior to

                                     - 48 -
<PAGE>

the time such list is furnished; provided, however, that so long as the
Indenture Trustee is the Note Registrar, no such list shall be required to be
furnished.

            SECTION 7.2. Preservation of Information; Communications to
Noteholders.

The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Indenture Trustee as provided in Section 7.1 and the names
and addresses of Holders received by the Indenture Trustee in its capacity as
Note Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in such Section 7.1 upon receipt of a new list so furnished.

                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

            SECTION 8.1. Collection of Money.

Except as otherwise expressly provided herein, the Indenture Trustee may demand
payment or delivery of, and shall receive and collect, directly and without
intervention or assistance of any fiscal agent or other intermediary, all money
and other property payable to or receivable by the Trust Collateral Agent
pursuant to the Sale and Servicing Agreement. The Indenture Trustee shall apply
all such money received by it, or cause the Trust Collateral Agent to apply all
money received by it as provided in this Indenture and the Sale and Servicing
Agreement. Except as otherwise expressly provided in this Indenture or in the
Sale and Servicing Agreement, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of the Trust
Property, the Indenture Trustee may at the expense of the Issuer take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings. Any such action
shall be without prejudice to any right to claim an Indenture Default or
Indenture Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.

            SECTION 8.2. Release of Trust Property.

Subject to the payment of its fees and expenses pursuant to Section 6.7, the
Indenture Trustee may after the Class A Termination Date, and when required by
the provisions of this Indenture shall, and shall cause the Trust Collateral
Agent to execute instruments to release property from the lien of this
Indenture, in a manner and under circumstances that are not inconsistent with
the provisions of this Indenture. No party relying upon an instrument executed
by the Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.

            SECTION 8.3. Opinion of Counsel.

The Indenture Trustee, the Class A Insurer and the Backup Insurer shall receive
at least seven days' written notice when requested by the Issuer to take any
action pursuant to Section 8.2, accompanied by copies of any instruments
involved, and the Indenture Trustee and the

                                     - 49 -
<PAGE>

Controlling Party shall also require as a condition to such action, an Opinion
of Counsel in form and substance satisfactory to the Indenture Trustee, and
prior to the Class A Termination Date, to the Controlling Party, stating the
legal effect of any such action, outlining the steps required to complete the
same, and concluding that all conditions precedent to the taking of such action
have been complied with and such action will not materially and adversely impair
the security for the Class A Notes or the rights of each of the Class A
Noteholders, the Class A Insurer and the Backup Insurer in contravention of the
provisions of this Indenture; provided, however, that such Opinion of Counsel
shall not be required to express an opinion as to the fair value of the Trust
Property. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.

                                   ARTICLE IX

                             Supplemental Indentures

            SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.

            (a) Without the consent of the Holders of any Class A Notes but,
prior to the Class A Termination Date, with the prior written consent of the
Controlling Party, and with prior notice to the Rating Agencies by the Issuer,
as evidenced to the Indenture Trustee, the Issuer and the Indenture Trustee,
when authorized by an Issuer Order, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Indenture Trustee, and prior to the Class A Termination Date, the Controlling
Party, for any of the purposes set forth in clauses (i)-(vi) below; provided,
however, if any party to this Indenture is unable to sign any amendment due to
its dissolution, winding up or comparable circumstances, then the consent of the
Noteholders and Certificate holders representing at least 51% of the total
current outstanding Class A Note Balance and at least 51% of the current total
Certificate Interest, respectively and the consent of the Controlling Party
shall be sufficient to amend this Agreement without such party's signature:

                  (i) to correct or amplify the description of any property at
      any time subject to the lien of this Indenture, or better to assure,
      convey and confirm unto the Indenture Trustee any property subject or
      required to be subjected to the lien of this Indenture, or to subject to
      the lien of this Indenture additional property;

                  (ii) to evidence the succession, in compliance with the
      applicable provisions hereof, of another person to the Issuer, and the
      assumption by any such successor of the covenants of the Issuer herein and
      in the Class A Notes contained;

                  (iii) to add to the covenants of the Issuer, for the benefit
      of the Holders of the Class A Notes, the Class A Insurer and the Backup
      Insurer, or to surrender any right or power herein conferred upon the
      Issuer;

                  (iv) to convey, transfer, assign, mortgage or pledge any
      property to or with the Trust Collateral Agent;

                                     - 50 -
<PAGE>

                  (v) to cure any ambiguity, to correct or supplement any
      provision herein or in any supplemental indenture which may be
      inconsistent with any other provision herein or in any supplemental
      indenture or to add any other provisions with respect to matters or
      questions arising under this Indenture or in any supplemental indenture;
      provided that such action shall not adversely affect the interests of the
      Holders of the Class A Notes; or

                  (vi) to evidence and provide for the acceptance of the
      appointment hereunder by a successor Indenture Trustee with respect to the
      Notes and to add to or change any of the provisions of this Indenture as
      shall be necessary to facilitate the administration of the trusts
      hereunder by more than one Indenture Trustee, pursuant to the requirements
      of Article VI.

            The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained provided that such
action shall not adversely affect the interests of the Holders of the Notes.

            (b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Class A
Notes but, prior to the Class A Termination Date with the prior written consent
of the Controlling Party, and with prior notice to the Rating Agency by the
Issuer, as evidenced to the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Class A Notes
under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder.

            (c) Notwithstanding anything in this Indenture to the contrary, the
Backup Insurer must consent to all amendments to this Indenture which have an
adverse effect on the Backup Insurer.

            SECTION 9.2. Supplemental Indentures with Consent of Noteholders.

The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies and with the consent of the
Controlling Party, or if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, with the consent of the Majority
Noteholders, enter into an indenture or indentures supplemental hereto for the
purpose of modifying in any manner the rights of the Holders of the Class A
Notes under this Indenture; provided, however, if any party to this Indenture is
unable to sign any amendment due to its dissolution, winding up or comparable
circumstances, then the consent of the Class A Noteholders representing at least
51% of the total current outstanding Class A Note Balance or the consent of the
Controlling Party shall be sufficient to amend this Agreement without such
party's signature; provided further, however, that, no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:

                                     - 51 -
<PAGE>

                  (i) change the time of payment of any installment of principal
      of or interest on any Class A Note, or reduce the principal amount
      thereof, the interest rate thereon or the Redemption Price with respect
      thereto, change the provision of this Indenture relating to the
      application of collections on, or the proceeds of the sale of, the Trust
      Property to payment of principal of or interest on the Class A Notes;

                  (ii) impair the right to institute suit for the enforcement of
      the provisions of this Indenture requiring the application of funds
      available therefor, as provided in Article V, to the payment of any such
      amount due on the Class A Notes on or after the respective due dates
      thereof (or, in the case of redemption, on or after the Redemption Date);

                  (iii) reduce the percentage of the Outstanding Amount of the
      Class A Notes, the consent of the Holders of which is required for any
      such supplemental indenture, or the consent of the Holders of which is
      required for any waiver of compliance with certain provisions of this
      Indenture or certain defaults hereunder and their consequences provided
      for in this Indenture;

                  (iv) modify or alter the provisions of the proviso to the
      definition of the term "Outstanding Amount";

                  (v) reduce the percentage of the Outstanding Amount of the
      Class A Notes required to direct the Indenture Trustee to direct the
      Issuer to sell or liquidate the Trust Property pursuant to Section 5.4;

                  (vi) modify any provision of this Section except to increase
      any percentage specified herein or to provide that certain additional
      provisions of this Indenture or the Basic Documents cannot be modified or
      waived without the consent of the Holder of each Outstanding Note affected
      thereby;

                  (vii) modify any of the provisions of this Indenture in such
      manner as to affect the calculation of the amount of any payment of
      interest or principal due on any Note on any Distribution Date (including
      the calculation of any of the individual components of such calculation)
      or to affect the rights of the Holders of Class A Notes to the benefit of
      any provisions for the mandatory redemption of the Class A Notes contained
      herein; or

                  (viii) permit the creation of any Lien ranking prior to or on
      a parity with the Lien of this Indenture with respect to any part of the
      Trust Property or, except as otherwise permitted or contemplated herein or
      in any of the Basic Documents, terminate the Lien of this Indenture on any
      property at any time subject hereto or deprive the Holder of any Note of
      the security provided by the Lien of this Indenture.

            The Issuer may determine whether or not any Class A Notes would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Class A Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.

                                     - 52 -
<PAGE>

            Notwithstanding anything in this Indenture to the contrary, the
Backup Insurer must consent to all amendments to this Indenture which have an
adverse effect on the Backup Insurer.

            Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Class A Insurer, the Backup Insurer and the Holders of the
Class A Notes to which such amendment or supplemental indenture relates a notice
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.

            SECTION 9.3. Execution of Supplemental Indentures.

In executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Class A Insurer, the Backup Insurer and
the Indenture Trustee shall be entitled to receive, and subject to Sections 6.1
and 6.2, shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.

            SECTION 9.4. Effect of Supplemental Indenture.

Upon the execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and amended in
accordance therewith with respect to the Class A Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Class A Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.

            SECTION 9.5. Reference in Class A Notes to Supplemental Indentures.

Class A Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Class A Notes so
modified as to conform, in the opinion of the Indenture Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.

                                    ARTICLE X

                               Redemption of Notes

                                     - 53 -
<PAGE>

            SECTION 10.1. Redemption.

            (a) The Class A Notes are subject to redemption in whole, but not in
part, at the direction of the Seller or the Servicer pursuant to Section
10.01(a) of the Sale and Servicing Agreement, on any Distribution Date on which
the Servicer or the Seller exercises its option to redeem the Trust Property
pursuant to Section 10.01(a) of the Sale and Servicing Agreement for a
redemption price equal to the Redemption Price; provided, however, that the
Indenture Trustee on behalf of the Issuer has received funds sufficient to pay
the Redemption Price. The Issuer shall furnish the Class A Insurer, the Backup
Insurer and the Rating Agencies notice of such redemption. If the Class A Notes
are to be redeemed pursuant to this Section, the Issuer shall furnish notice of
such election to the Class A Insurer, the Backup Insurer, the Trust Collateral
Agent and the Indenture Trustee not later than 45 days prior to the Redemption
Date and promptly upon giving such notice, the Issuer shall deposit or cause to
be deposited with the Indenture Trustee in the Note Distribution Account the
Redemption Price of the Class A Notes to be redeemed whereupon all such Class A
Notes shall be due and payable on the Redemption Date, together with other
amounts due and owing at such time under the Basic Documents, upon the
furnishing of a notice complying with Section 10.2 to each Holder of Notes, the
Class A Insurer and the Backup Insurer.

            (b) [Reserved]

            (c) If amounts are to be paid to Class A Noteholders pursuant to
Section 10.01(a), the Issuer shall, to the extent practicable, furnish notice of
such event to the Indenture Trustee, the Class A Insurer and the Backup Insurer
not later than 45 days prior to the Redemption Date whereupon all such amounts
shall be payable on the Redemption Date.

            SECTION 10.2. Form of Redemption Notice.

Notice of redemption under Section 10.1(a) shall be given by the Indenture
Trustee by facsimile or by first-class mail, postage prepaid, transmitted or
mailed prior to the applicable Redemption Date to each Holder of the Class A
Notes, as of the close of business on the Record Date preceding the applicable
Redemption Date, at such Holder's address appearing in the Note Register.

            All notices of redemption shall state:

                  (i) the Redemption Date;

                  (ii) the Redemption Price;

                  (iii) that the Record Date otherwise applicable to such
      Redemption Date is not applicable and that payments shall be made only
      upon presentation and surrender of such Class A Notes and the place where
      such Class A Notes are to be surrendered for payment of the Redemption
      Price (which shall be the office or agency of the Issuer to be maintained
      as provided in Section 2.7); and

                  (iv) that interest on the Class A Notes shall cease to accrue
      on the Redemption Date.

                                     - 54 -
<PAGE>

            Notice of redemption of the Class A Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Class A Note
shall not impair or affect the validity of the redemption of any other Note.

            SECTION 10.3. Class A Notes Payable on Redemption Date.

The Class A Notes to be redeemed shall, following notice of redemption as
required by Section 10.2 (in the case of redemption pursuant to Section
10.1(a)), on the Redemption Date become due and payable at the Redemption Price
and (unless the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on the Redemption Price for any period after the date to
which accrued interest is calculated for purposes of calculating the Redemption
Price.

                                   ARTICLE XI

                                  Miscellaneous

            SECTION 11.1. Compliance Certificates and Opinions, etc.

            (a) Upon any application or request by the Issuer or the Controlling
Party to the Indenture Trustee or the Trust Collateral Agent to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee, or the Trust Collateral Agent, as the case may be, and to the Class A
Insurer and the Backup Insurer, if such request is made by the Issuer, and if
such request is made by the Controlling Party, to the Insurer not then acting as
Controlling Party, an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with.

            Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

                  (i) a statement that each signatory of such certificate or
      opinion has read or has caused to be read such covenant or condition and
      the definitions herein relating thereto;

                  (ii) a statement that, in the opinion of each such signatory,
      such signatory has made such examination or investigation as is necessary
      to enable such signatory to express an informed opinion as to whether or
      not such covenant or condition has been complied with; and

                  (iii) a statement as to whether, in the opinion of each such
      signatory, such condition or covenant has been complied with.

            (b) Prior to the deposit of any Collateral or other property or
securities with the Trust Collateral Agent that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee, the Class A
Insurer, the Backup Insurer and the Trust Collateral Agent an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate (which may be based upon a

                                     - 55 -
<PAGE>

certification of the Seller or the Servicer) as to the fair value (within 90
days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.

            (c) Whenever the Issuer is required to furnish to the Indenture
Trustee, the Class A Insurer, the Backup Insurer and the Trust Collateral Agent
an Officer's Certificate certifying or stating the opinion of any signer thereof
as to the matters described in clause (b) above, the Issuer shall also deliver
to the Indenture Trustee, the Class A Insurer, the Backup Insurer and the Trust
Collateral Agent an Independent Certificate as to the same matters, if the fair
value to the Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (b) above and this clause (c), is 10%
or more of the Outstanding Amount of the Class A Notes, but such a certificate
need not be furnished with respect to any securities so deposited, if the fair
value thereof to the Issuer as set forth in the related Officer's Certificate is
less than $25,000.

            (d) Other than with respect to the release of any Purchased Loans,
whenever any property or securities are to be released from the Lien of this
Indenture, the Issuer shall also furnish to the Trust Collateral Agent, the
Class A Insurer and the Backup Insurer an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed to be
released and stating that in the opinion of such person the proposed release
will not impair the security under this Indenture in contravention of the
provisions hereof.

            (e) Whenever the Issuer is required to furnish to the Indenture
Trustee, the Class A Insurer and the Backup Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to the matters
described in clause (d) above, the Issuer shall also furnish to the Trust
Collateral Agent, the Class A Insurer and the Backup Insurer an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property other than Purchased Loans, or securities
released from the Lien of this Indenture since the commencement of the then
current calendar year, as set forth in the certificates required by clause (d)
above and this clause (e), equals 10% or more of the Outstanding Amount of the
Notes, but such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the related
Officer's Certificate is less than $25,000.

            (f) Notwithstanding Section 2.9 or any other provision of this
Section, the Issuer may, without delivering any Officer's Certificates or
Independent Certificates (A) collect, liquidate, sell or otherwise dispose of
Contracts as and to the extent required by the Basic Documents and (B) instruct
the Trust Collateral Agent to make cash payments out of the Trust Accounts as
and to the extent permitted or required by the Basic Documents.

            SECTION 11.2. Form of Documents Delivered to Indenture Trustee.

In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more

                                     - 56 -
<PAGE>

other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.

            Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.

            Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

            Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to conclusively rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.

            SECTION 11.3. Acts of Noteholders.

            (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by Class
A Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Class A Noteholders in person or by
agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Class A Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.

            (b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Indenture
Trustee.

                                     - 57 -
<PAGE>

            (c) The ownership of Class A Notes shall be proved by the Note
Register.

            (d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Class A Notes shall bind the Holder
of every Class A Note issued upon the registration thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Indenture Trustee or the Issuer in reliance thereon, whether or
not notation of such action is made upon such Class A Note.

            SECTION 11.4. Notices, etc. to Indenture Trustee, Class A Insurer,
Backup Insurer, Issuer and Rating Agencies.

Any request, demand, authorization, direction, notice, consent, waiver or Act of
Class A Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:

            (a) The Indenture Trustee by any Class A Noteholder, the Class A
Insurer, the Backup Insurer or by the Issuer shall be sufficient for every
purpose hereunder if personally delivered, delivered by overnight courier,
mailed certified mail, return receipt requested or by telecopy to: JPMorgan
Chase Bank, 4 New York Plaza, 6th Floor, New York, NY 10004, Attention:
Institutional Trust Services/Structured Finance, Telephone: (212) 623-5600,
Telecopy: (212) 623-5932 and shall be deemed to have been duly given upon
receipt to the Indenture Trustee at its principal Corporate Trust Office, or

            (b) The Issuer by the Indenture Trustee, the Class A Insurer, the
Backup Insurer or by any Class A Noteholder shall be sufficient for every
purpose hereunder if personally delivered, delivered by overnight courier,
mailed certified mail, return receipt requested or by telecopy to: Credit
Acceptance Corporation, Silver Triangle Building, 25505 West Twelve Mile Road,
Suite 3000, Southfield, Michigan 48034-8339, Attention: Wendy Rummler,
Telephone: (248) 353-2700 (ext. 217), Telecopy: (866) 249-3138. The Issuer shall
promptly transmit any notice received by it from the Class A Noteholders to the
Indenture Trustee, the Class A Insurer and the Backup Insurer.

            (c) Notices required to be given to the Class A Insurer by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, delivered by overnight courier, mailed certified mail,
return receipt requested to the following address: Radian Asset Assurance Inc.,
335 Madison Avenue, New York, New York 10017, Attention: Chief Risk Officer and
Chief Legal Officer; "Urgent Material Enclosed", and all reporting information
required to be provided to the Class A Insurer shall also be sent by electronic
mail to ABSRM@radian.biz.

            (d) Notices required to be given to the Backup Insurer by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, delivered by overnight courier, mailed certified mail,
return receipt requested to the following address: XL Capital Assurance Inc.,
Surveillance, 1221 Avenue of the Americas, New York, New York 10020.

            (e) Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, delivered by

                                     - 58 -
<PAGE>

overnight courier, or mailed certified mail, return receipt requested to the
following addresses: Moody's Investors Service, Inc., 99 Church Street, New
York, NY 10007; Standard & Poor's Rating Services, 55 Water Street, New York,
New York 10041.

or, in each case, to such other address as shall be designated by written notice
from the applicable notice party to the other parties.

            SECTION 11.5. Notices to Noteholders; Waiver.

Where this Indenture provides for notice to Class A Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class, postage prepaid to each Class A
Noteholder affected by such event, at his address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Class A Noteholders is given by mail, neither the failure to mail such notice
nor any defect in any notice so mailed to any particular Class A Noteholder
shall affect the sufficiency of such notice with respect to other Noteholders,
and any notice that is mailed in the manner herein provided shall conclusively
be presumed to have been duly given.

            Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.

            In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.

            Where this Indenture provides for notice to the Rating Agency,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Indenture
Default or Indenture Event of Default.

            SECTION 11.6. Alternate Payment and Notice Provisions.

Notwithstanding any provision of this Indenture or any of the Class A Notes to
the contrary, the Issuer may enter into any agreement with any Holder of a Class
A Note providing for a method of payment, or notice by the Indenture Trustee or
any Paying Agent to such Holder, that is different from the methods provided for
in this Indenture for such payments or notices, provided that such methods are
reasonable and consented to by the Indenture Trustee (which consent shall not be
unreasonably withheld). The Issuer will furnish to the Indenture Trustee, the
Class A Insurer and the Backup Insurer a copy of each such agreement and the
Indenture Trustee will cause payments to be made and notices to be given in
accordance with such agreements.

            SECTION 11.7. Effect of Headings and Table of Contents.

                                     - 59 -
<PAGE>

The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

            SECTION 11.8. Successors and Assigns.

All covenants and agreements in this Indenture and the Class A Notes by the
Issuer shall bind its successors and assigns, whether so expressed or not. All
agreements of the Indenture Trustee in this Indenture shall bind its successors.

            SECTION 11.9. Separability.

In case any provision in this Indenture or in the Class A Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

            SECTION 11.10. Benefits of Indenture.

Nothing in this Indenture or in the Class A Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Class A Noteholders, and any other party secured hereunder,
and any other person with an Ownership interest in any part of the Trust
Property, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

            SECTION 11.11. Legal Holidays.

In any case where the date on which any payment is due shall not be a Business
Day, then (notwithstanding any other provision of the Class A Notes or this
Indenture) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date an
which nominally due, and no interest shall accrue for the period from and after
any such nominal date.

            SECTION 11.12. GOVERNING LAW.

THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.

            SECTION 11.13. Counterparts.

This Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

            SECTION 11.14. Recording of Indenture.

                                     - 60 -
<PAGE>

If this Indenture is subject to recording in any appropriate public recording
offices, such recording is to be effected by the Issuer and at its expense
accompanied by an Opinion of Counsel (which may be counsel to the Indenture
Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to
the effect that such recording is necessary either for the protection of the
Class A Noteholders or any other person secured hereunder or for the enforcement
of any right or remedy granted to the Indenture Trustee under this Indenture.

            SECTION 11.15. Trust Obligation.

No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Seller, the Owner Trustee, the Trust Collateral
Agent or the Indenture Trustee on the Class A Notes or under this Indenture or
any certificate or other writing delivered in connection herewith or therewith,
against: (i) the Seller, the Indenture Trustee or the Trust Collateral Agent or
the Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Issuer, the Seller, the Servicer, the
Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer or of any
successor or assign of the Seller, the Servicer, the Indenture Trustee or the
Trust Collateral Agent or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

            SECTION 11.16. No Petition.

The Indenture Trustee, by entering into this Indenture, and each Class A
Noteholder, by accepting a Class A Note, hereby covenant and agree that they
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law.

            SECTION 11.17. Inspection.

The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee, the Class A Insurer or the Backup
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports, and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law or in connection with litigation, and except to the extent that
the Indenture

                                     - 61 -
<PAGE>

Trustee may reasonably determine that such disclosure is consistent with its
obligations hereunder and under the Basic Documents.

            SECTION 11.18. Maximum Interest Payable.

The Issuer, the Indenture Trustee and the Holders of the Class A Notes
specifically intend and agree to limit contractually the amount of interest
payable under this Indenture, the Class A Notes and all other instruments and
agreements related hereto and thereto to the maximum amount of interest lawfully
permitted to be charged under applicable law. Therefore, none of the terms of
this Indenture, the Class A Notes or any instrument pertaining to or relating to
or executed in connection with this Indenture or the Class A Notes shall ever be
construed to create a contract to pay interest (or amounts deemed to be interest
under applicable law) at a rate in excess of the maximum rate permitted to be
charged under applicable law, and neither the Issuer nor any other party liable
or to become liable hereunder, under the Class A Notes or under any other
instruments and agreements related hereto and thereto shall ever be liable for
interest in excess of the amount determined at such maximum rate, and the
provisions of this Section shall control over all other provisions of this
Indenture, the Class A Notes or any other instrument pertaining to or relating
to the transactions herein or therein contemplated. If any amount of interest
taken or received by the Indenture Trustee or any Holder of a Class A Note shall
be in excess of said maximum amount of interest which, under applicable law,
could lawfully have been collected by the Indenture Trustee or such Holder
incident to such transactions, then such excess shall be deemed to have been the
result of a mathematical error by all parties hereto and shall be automatically
applied to the reduction of the principal amount owing under the Class A Notes
or if such excessive interest exceeds the unpaid principal balance of the Class
A Notes, such excess shall be refunded promptly by the Person receiving such
amount to the party paying such amount. All amounts paid or agreed to be paid in
connection with such transactions which would under applicable law be deemed
"interest" shall, to the extent permitted by such applicable law, be amortized,
prorated, allocated and spread throughout the stated term of the Indenture.
"Applicable law" as used in this paragraph means that law in effect from time to
time which permits the charging and collection of the highest permissible
lawful, nonusurious rate of interest on the transactions herein contemplated
including laws of each State which may be held to be applicable and of the
United States of America, and "maximum rate" as used in this paragraph means,
with respect to each of the Class A Notes, the maximum lawful, nonusurious rates
of interest (if any) which under applicable law may be charged to the Issuer
from time to time with respect to such Class A Notes.

            SECTION 11.19. No Legal Title in Holders.

No Holder of a Class A Note shall have legal title to any part of the Trust
Property. No transfer, by operation of law or otherwise, of any Note or other
right, title and interest of any Holder of a Class A Note in and to the Trust
Property or hereunder shall operate to terminate this Indenture or the trusts
hereunder or entitle any successor or transferee of such Holder to an accounting
or to the transfer to it of legal title to any part of the Trust Property.

            SECTION 11.20. Third Party Beneficiary.

                                     - 62 -
<PAGE>

The parties hereto acknowledge and agree that the Class A Insurer, the Backup
Insurer and the Class A Noteholders are each an express third party beneficiary
of this Indenture.

            SECTION 11.21. Control Rights.

So long as any Class A Note is outstanding, the Controlling Party shall have the
power to exercise the voting, consent and control rights granted to the Class A
Noteholders, except as set forth in Sections 9.1 and 9.2 hereof; provided,
however, that after the occurrence and during the continuance of a Class A
Insurer Default, all voting, consent or control rights of the Class A Insurer
shall be suspended and the Backup Insurer shall be the Controlling Party. Upon
the cure of a Class A Insurer Default, such voting, consent and control rights
shall be reinstated and the Backup Insurer shall no longer be the Controlling
Party. If the Backup Insurer is the Controlling Party, after the occurrence and
during the continuance of a Backup Insurer Default, any voting, consent or
control rights granted to the Backup Insurer shall be suspended. Upon the cure
of any such Backup Insurer Default, the Backup Insurer's voting, consent and
control rights shall be reinstated.

                      [THIS SPACE LEFT INTENTIONALLY BLANK]

                                      -63-

<PAGE>

            IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, hereunto duly
authorized, all as of the day and year first above written.

                                             CREDIT ACCEPTANCE AUTO DEALER LOAN
                                             TRUST 2004-1

                                             By: Wachovia Bank of Delaware,
                                             National Association, not in its
                                             individual capacity but solely as
                                             Owner Trustee,

                                             By: _______________________________
                                                 Name:
                                                 Title:

                                             JPMORGAN  CHASE  BANK,  not in its
                                             individual  capacity  but  solely
                                             as Indenture Trustee,

                                             By: _______________________________
                                                 Name:
                                                 Title:

                           [Indenture Signature Page]

<PAGE>

                                                                       EXHIBIT A

                              FORM OF CLASS A NOTE

                   SEE ATTACHED PAGES FOR CERTAIN DEFINITIONS

            UNLESS THIS CLASS A NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CLASS A NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

            THIS CLASS A NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE APPLICABLE
SECURITIES LAWS OF ANY STATE. ACCORDINGLY, TRANSFER OF THIS CLASS A NOTE IS
SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE INDENTURE. BY ITS ACCEPTANCE OF
THIS CLASS A NOTE THE HOLDER OF THIS CLASS A NOTE IS DEEMED TO REPRESENT TO THE
SELLER AND THE INDENTURE TRUSTEE THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS
OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR
OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS).

            NO SALE, PLEDGE OR OTHER TRANSFER OF A CLASS A NOTE SHALL BE MADE
UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE CLASS A
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO
A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (C) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AND IN EACH OF THE
FOREGOING CASES, IS MADE IN ACCORDANCE WITH SAID ACT AND THE APPLICABLE STATE
SECURITIES AND BLUE SKY LAWS. THE INDENTURE TRUSTEE MAY REQUIRE AN OPINION OF
COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY TRANSFER OF THE NOTES
PURSUANT TO CLAUSES (A) OR (C) ABOVE. ALL OPINIONS OF COUNSEL

                                      A-1

<PAGE>

REQUIRED IN CONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY
ACCEPTABLE TO THE INDENTURE TRUSTEE.

            EACH TRANSFEREE OF THIS CLASS A NOTE IS DEEMED TO REPRESENT AND
WARRANT THAT, WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY SUCH TRANSFEREE
TO ACQUIRE THIS CLASS A NOTE (THE "SOURCE") EITHER (A) SUCH SOURCE IS NOT AN
"EMPLOYEE BENEFIT PLAN" (WITHIN THE MEANING OF SECTION 3(3) OF ERISA), A "PLAN"
(WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE CODE) OR A PLAN THAT IS SUBJECT
TO ANY SUBSTANTIALLY SIMILAR PROVISION OF ANY FEDERAL, STATE OR LOCAL LAW, OR A
PERSON USING ASSETS OF ANY SUCH PLAN, OR (B) THE ACQUISITION AND HOLDING OF THIS
CLASS A NOTE BY SUCH SOURCE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA, SECTION 4975 OF THE CODE OR
ANY SUBSTANTIALLY SIMILAR PROVISION OF ANY FEDERAL, STATE OR LOCAL LAW.

                                      A-2

<PAGE>

REGISTERED

                                                                 CUSIP 22530MAB0

No. A-1

            THE PRINCIPAL OF THIS CLASS A NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A NOTE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                 CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1

                        2.53% CLASS A ASSET BACKED NOTES

            Credit Acceptance Auto Dealer Loan Trust 2004-1, a statutory trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of ONE HUNDRED MILLION DOLLARS
($100,000,000) payable on each Distribution Date in an amount equal to the
aggregate amount, if any, payable from the Note Distribution Account in respect
of principal on the Class A Notes pursuant to Section 3.1 of the Indenture and
Section 5.09 of the Sale and Servicing Agreement until the Class A Note Balance
is reduced to zero; provided, however, that the entire unpaid principal amount
of this Class A Note shall be due and payable on August 17, 2009 (the "Stated
Final Maturity"). The Issuer will pay interest on this Class A Note at the rate
per annum shown above (the "Class A Note Rate"), which shall be due and payable
on each Distribution Date until the principal of this Class A Note is paid, on
the principal amount of this Class A Note outstanding on the last day of the
immediately preceding Collection Period. Interest on this Class A Note will
accrue for each Distribution Date from the preceding Distribution Date to (or,
in the case of the initial Distribution Date, from the Closing Date) but
excluding the current Distribution Date. Interest will be computed on the basis
of a 360-day year and twelve thirty day months.

            This Class A Note is one of a duly authorized issue of notes of the
Issuer, designated as its 2.53% Class A Asset Backed Notes (the "Class A
Notes"), issued under an Indenture dated as of August 25, 2004 (such indenture,
as supplemented or amended, is herein called the "Indenture"), between the
Issuer and JPMorgan Chase Bank, as indenture trustee (the "Indenture Trustee",
which term includes any successor Indenture Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Class A Notes. The Class A
Notes are subject to all terms of the Indenture and the Sale and Servicing
Agreement. All terms used in this Class A Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.

            The Class A Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.

                                      A-3

<PAGE>

            On each Distribution Date, Holders of the Class A Notes will be
entitled to the Class A Interest Distributable Amount and its Class A Principal
Distributable Amount in accordance with the terms of the Indenture.
"Distribution Date" means the fifteenth day of each month, or, if any such date
is not a Business Day, the next succeeding Business Day, commencing September
15, 2004.

            The Class A Notes are entitled to the benefits of the Class A Note
Insurance Policy issued by Radian Asset Assurance Inc. (the "Class A Insurer")
and the Backup Insurance Policy issued by XL Capital Assurance Inc. (the "Backup
Insurer"). The Class A Insurer is obligated to pay in accordance with the terms
of the Class A Note Insurance Policy and the Backup Insurer is obligated to pay
in accordance with the terms of the Backup Insurance Policy as described in the
"Statements of Insurance" attached hereto.

            As described above, the entire unpaid principal amount of this Class
A Note shall be due and payable on the earlier of the Stated Final Maturity and
the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Class A
Notes shall be due and payable if an Indenture Event of Default shall have
occurred and be continuing, and the Class A Notes have been accelerated subject
to the terms of the Indenture.

            All principal payments on the Class A Notes shall be made pro rata
to the Class A Noteholders entitled thereto.

            Upon written notice from the Issuer, the Indenture Trustee shall
notify the Person in whose name a Class A Note is registered at the close of
business on the Record Date preceding the Distribution Date on which the Issuer
expects that the final installment of principal of and interest on such Class A
Note will be paid. Such notice shall be mailed or transmitted by facsimile prior
to such final Distribution Date and shall specify that such final installment
will be payable only upon presentation and surrender of such Class A Note and
shall specify the place where such Class A Note may be presented and surrendered
for payment of such installment. Notices in connection with purchases of Class A
Notes shall be mailed to Class A Noteholders as provided in the Indenture.

            Distributions required to be made to Class A Noteholders on any
Distribution Date shall be made to each Class A Noteholder of record on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if (i) such Class A Noteholder shall have provided to the
Note Registrar appropriate written instructions at least ten (10) Business Days
prior to such Distribution Date and such Holder's Notes in the aggregate
evidence a denomination of not less than $100,000 and integral multiples of
$1,000 or (ii) such Class A Noteholder is the Seller, or an Affiliate thereof,
or, if not, by check mailed to such Class A Noteholder at the address of such
holder appearing in the Note Register.

            The Issuer shall pay interest on overdue installments of interest on
the Class A Notes at the Class A Note Rate to the extent lawful.

                                      A-4

<PAGE>

            As provided in the Indenture, the Class A Notes may be redeemed
pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the
option of the Servicer or the Seller, on any Distribution Date on or after the
date on which the Class A Note Balance is less than or equal to 15% of the
initial Class A Note Balance.

            As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A Note may be registered on the Note
Register upon surrender of this Class A Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, (i)
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee and the Note Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Class A Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Class A Note, but the Indenture Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any such transfer or exchange of the Class A Notes.

            Each Noteholder, by acceptance of a Class A Note covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Trust Collateral Agent under the Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Seller, the Servicer, the Indenture Trustee or the Trust
Collateral Agent or the Owner Trustee, (ii) any owner of a beneficial interest
in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Issuer, the Seller, the Servicer, the Indenture Trustee or
the Trust Collateral Agent or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Seller, the Servicer, the
Owner Trustee or the Indenture Trustee or the Trust Collateral Agent or of any
successor or assign of the Seller, the Servicer, the Indenture Trustee, the
Owner Trustee in its individual capacity, or the Trust Collateral Agent except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.

            Each Class A Noteholder, by acceptance of a Class A Note, covenants
and agrees that by accepting the benefits of the Indenture that such Class A
Noteholder will not at any time institute against the Seller or the Issuer or
join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings, under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Class A Notes, the Indenture
or the Basic Documents. In addition, each Class A Noteholder, by acceptance of a
Class A Note, agrees to treat the Class A Notes as indebtedness of the Issuer.

            Prior to the due presentment for registration of transfer of this
Class A Note, the Issuer, the Indenture Trustee, the Class A Insurer, the Backup
Insurer and the Note Registrar and any agent of the Issuer, the Indenture
Trustee, the Class A Insurer, the Backup Insurer and the

                                       A-5

<PAGE>

Note Registrar may treat the Person in whose name this Class A Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Class A Note be overdue, and neither the Issuer, the Indenture Trustee, the
Note Registrar, the Class A Insurer, the Backup Insurer nor any such agent shall
be bound by notice to the contrary.

            The term "Issuer" as used in this Class A Note includes any
successor to the Issuer under the Indenture.

            The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee, the Class A Insurer, the Backup Insurer and the Holders of Class A
Notes under the Indenture.

            The Class A Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

            This Class A Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.

            No reference herein to the Indenture and no provision of this Class
A Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Class A Note at the times, place, and rate, and in the coin or currency
herein prescribed.

            Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Basic Documents, neither Wachovia Bank of
Delaware, National Association in its individual capacity, any owner of a
beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Class A Note or the Indenture, it being expressly understood that said
covenants, obligations and indemnifications have been made by the Owner Trustee
for the sole purposes of binding the interests of the Owner Trustee in the
assets of the Issuer. The Holder of this Class A Note by the acceptance hereof
agrees that except as expressly provided in the Indenture or the Basic
Documents, in the case of an Indenture Event of Default, the Holder shall have
no claim against any of the foregoing for any deficiency, loss or claim
therefrom; provided, however, that nothing contained herein shall be taken to
prevent recourse to, and enforcement against, the assets of the Issuer for any
and all liabilities, obligations and undertakings contained in the Indenture or
in this Class A Note.

            The principal of and interest on this Class A Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Class A Note shall be applied first to interest
due and payable on this Class A Note as provided above and then to the unpaid
principal of this Class A Note.

                                      A-6

<PAGE>

            Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Class A
Note shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                       A-7

<PAGE>

            IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.

                                             CREDIT ACCEPTANCE AUTO DEALER LOAN
                                             TRUST 2004-1

                                             By:  WACHOVIA BANK OF DELAWARE,
                                                  NATIONAL ASSOCIATION, not in
                                                  its individual capacity but
                                                  solely as Owner Trustee under
                                                  the Trust Agreement

                                                  By: __________________________
                                                      Name:
                                                      Title:

Dated: __________________________

                                      A-8

<PAGE>

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the Class A Notes designated above and referred to in
the within-mentioned Indenture.

Date:                                        JPMORGAN CHASE BANK, not in its
                                             individual capacity but solely as
                                             Indenture Trustee,

                                             by: _______________________________
                                             Authorized Signatory

                                      A-9
<PAGE>

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
                         (name and address of assignee)

the within Class A Note and all rights thereunder, and hereby irrevocably
constitutes and appoints, attorney, to transfer said Class A Note on the books
kept for registration thereof, with full power of substitution in the premises.

Dated: _________________________________     ________________________________(1)

------------------
(1)   NOTE: The signature to this assignment must correspond with the name of
      the registered owner as it appears on the face of the within Class A Note
      in every particular, without alteration, enlargement or any change
      whatsoever.

                                      A-10

<PAGE>

                             STATEMENT OF INSURANCE

                         [Class A Note Insurance Policy]

                                      A-11

<PAGE>

                             STATEMENT OF INSURANCE

                            [Backup Insurance Policy]

                                      A-12

<PAGE>

                                                                      SCHEDULE A
                                                                    to Indenture

              PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

      In addition to the representations, warranties and covenants contained in
the Indenture, the Issuer hereby represents, warrants, and covenants to the
Trust, the Trust Collateral Agent and the Indenture Trustee as follows on the
Closing Date and on each Distribution Date on which the Trust purchases Dealer
Loans, in each case only with respect to the Collateral pledged to the Indenture
Trustee on the Closing Date or the relevant Distribution Date:

                                     GENERAL

1. The Indenture creates a valid and continuing security interest (as defined in
UCC Section 9-102) in the Collateral in favor of the Indenture Trustee, which
security interest is prior to all other Liens, and is enforceable as such as
against creditors of and purchasers from and assignees of the Trust.

2. Each Contract constitutes "tangible chattel paper" or a "payment intangible",
within the meaning of UCC Section 9-102. Each Dealer Loan constitutes a "payment
intangible" or a "general intangible" within the meaning of UCC Section 9-102.

3. Each Dealer Agreement constitutes either a "general intangible" or "tangible
chattel paper" within the meaning of UCC Section 9-102.

4. The Trust has taken or will take all steps necessary actions with respect to
the Dealer Loans to perfect its security interest in the Dealer Loans and in the
property securing the Dealer Loans.

                                    CREATION

1. The Trust owns and has good and marketable title to the Collateral, free and
clear of any Lien, claim or encumbrance of any Person, excepting only liens for
taxes, assessments or similar governmental charges or levies incurred in the
ordinary course of business that are not yet due and payable or as to which any
applicable grace period shall not have expired, or that are being contested in
good faith by proper proceedings and for which adequate reserves have been
established, but only so long as foreclosure with respect to such a lien is not
imminent and the use and value of the property to which the Lien attaches is not
impaired during the pendency of such proceeding.

                                   PERFECTION

1. The Trust has caused or will have caused, within ten days after the effective
date of the Indenture, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Collateral granted to the
Indenture Trustee under the Indenture.

                                      A-1

<PAGE>

2. With respect to Collateral that constitutes tangible chattel paper, such
tangible chattel paper is in the possession of the Servicer, in its capacity as
custodian for the Trust and the Trust Collateral Agent, and the Trust Collateral
Agent has received a written acknowledgment from the Servicer, in its capacity
as custodian, that it is holding such tangible chattel paper solely on its
behalf and for the benefit of the Trust Collateral Agent, the Seller, the Trust
and the relevant Dealer(s). All financing statements filed or to be filed
against the Trust in favor of the Indenture Trustee in connection with this
Indenture describing the Trust Property contain a statement to the following
effect: "A purchase of or security interest in any collateral described in this
financing statement will violate the rights of the Secured Party."

                                    PRIORITY

1. Other than the security interest granted to the Indenture Trustee pursuant to
this Indenture, the Trust has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Trust Property. None of the
Originator, the Servicer nor the Seller has authorized the filing of, or is
aware of any financing statements against either the Seller, the Originator or
the Trust that includes a description of the Collateral and proceeds related
thereto other than any financing statement: (i) relating to the sale of the
Originator Property by the Originator to the Seller under the Contribution
Agreement; (ii) relating to the security interest granted to the Trust under the
Sale and Servicing Agreement; (iii) relating to the security interest granted to
the Indenture Trustee under the Indenture; or (iv) that has been terminated or
amended to reflect a release of the Collateral.

2. Neither the Seller, the Originator nor the Trust is aware of any judgment,
ERISA or tax lien filings against either the Seller, the Originator or the
Trust.

3. None of the tangible chattel paper that constitutes or evidences the
Contracts or the Dealer Agreements has any marks or notations indicating that it
has been pledged, assigned or otherwise conveyed to any Person other than the
Originator, the Servicer, the Seller, the Trust, a collection agent or the
Indenture Trustee.

                     SURVIVAL OF PERFECTION REPRESENTATIONS

1. Notwithstanding any other provision of the Agreement, the Contribution
Agreement, the Indenture or any other Basic Document, the Perfection
Representations, Warranties and Covenants contained in this Schedule shall be
continuing, and remain in full force and effect (notwithstanding any replacement
of the Servicer or termination of Servicer's rights to act as such) until such
time as all obligations under the Sale and Servicing Agreement, Contribution
Agreement and the Indenture have been finally and fully paid and performed.

                                    NO WAIVER

1. The parties hereto: (i) shall not, without obtaining a confirmation of the
then-current ratings of the Class A Notes (without giving effect to the Class A
Note Insurance Policy or the Backup Insurance Policy), waive any of the
Perfection Representations, Warranties or Covenants; (ii) shall provide the
Rating Agencies with prompt written notice of any breach of the Perfection
Representations, Warranties or Covenants, and shall not, without obtaining a
confirmation of the then-current rating of the Class A Notes (without giving
effect to the Class A

                                      A-2

<PAGE>

Note Insurance Policy or the Backup Insurance Policy) as determined after any
adjustment or withdrawal of the ratings following notice of such breach, waive a
breach of any of the Perfection Representations, Warranties or Covenants.

                                      A-3<PAGE>

                                                                  EXHIBIT 4(f)58

                                                                  EXECUTION COPY

                 CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1
                           CLASS A ASSET BACKED NOTES

                CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1,
                                  as the Issuer

                      CREDIT ACCEPTANCE FUNDING LLC 2004-1,
                                  as the Seller

                         CREDIT ACCEPTANCE CORPORATION,
                 as the Servicer and in its individual capacity

                              JPMORGAN CHASE BANK,
                 as the Trust Collateral Agent/Indenture Trustee

                     SYSTEMS & SERVICES TECHNOLOGIES, INC.,
                             as the Backup Servicer

                          SALE AND SERVICING AGREEMENT
                           Dated as of August 25, 2004

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
<S>                                                                                                      <C>
ARTICLE I DEFINITIONS .................................................................................    1

   SECTION 1.01. Definitions ..........................................................................    1
   SECTION 1.02. Usage of Terms .......................................................................   23
   SECTION 1.03. Closing Date and Record Date .........................................................   23
   SECTION 1.04. Section References ...................................................................   23
   SECTION 1.05. Compliance Certificates ..............................................................   24
   SECTION 1.06. Directions ...........................................................................   24

ARTICLE II CONVEYANCE OF SELLER PROPERTY; FURTHER ENCUMBRANCE THEREOF .................................   24

   SECTION 2.01. Sale of the Initial Seller Property to the Trust .....................................   24
   SECTION 2.02. Revolving Period; Principal Collection Account .......................................   25
   SECTION 2.03. Title to Trust Property ..............................................................   28

ARTICLE III THE DEALER LOANS AND THE CONTRACTS ........................................................   29

   SECTION 3.01. Representations and Warranties of Seller with respect to the Seller Property .........   29
   SECTION 3.02. Payment Upon Breach ..................................................................   31
   SECTION 3.03. Custody of Dealer Agreements and Contract Files ......................................   33

ARTICLE IV ADMINISTRATION AND SERVICING OF DEALER LOANS AND CONTRACTS .................................   36

   SECTION 4.01. Appointment; Duties of Servicer ......................................................   36
   SECTION 4.02. Collection and Application of Payments on the Dealer Loans and Contracts .............   38
   SECTION 4.03. Realization Upon Contracts ...........................................................   39
   SECTION 4.04. Physical Damage Insurance ............................................................   39
   SECTION 4.05. Maintenance of Security Interests in Financed Vehicles ...............................   39
   SECTION 4.06. Covenants of Servicer ................................................................   39
   SECTION 4.07. Payments in Respect of Contracts Upon Breach .........................................   44
   SECTION 4.08. Servicer Fee .........................................................................   45
   SECTION 4.09. Servicer's Certificate ...............................................................   45
   SECTION 4.10. Annual Statement as to Compliance; Notice of Default .................................   47
   SECTION 4.11. Annual Independent Certified Public Accountant's Report ..............................   48
   SECTION 4.12. Access to Certain Documentation and Information Regarding Dealer Loans and Contracts .   49
   SECTION 4.13. Servicer Expenses ....................................................................   49
   SECTION 4.14. Servicer Not to Resign as Servicer ...................................................   49
   SECTION 4.15. The Backup Servicer ..................................................................   50
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                          <C>
   SECTION 4.16. Fidelity Bond ...........................................................................   51

ARTICLE V TRUST ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS ................   51

   SECTION 5.01. Establishment of Trust Accounts .........................................................   51
   SECTION 5.02. Collections; Allocation .................................................................   54
   SECTION 5.03. Certain Reimbursements to the Servicer ..................................................   54
   SECTION 5.04. Additional Deposits .....................................................................   55
   SECTION 5.05. Reserve Account .........................................................................   55
   SECTION 5.06. Payments under the Class A Note Insurance Policy ........................................   56
   SECTION 5.07. Payments under the Backup Insurance Policy ..............................................   58
   SECTION 5.08. Transfers and Distributions .............................................................   60
   SECTION 5.09. Distributions from the Class A Note Distribution Account ................................   62
   SECTION 5.10. Certificate Distribution Account ........................................................   63
   SECTION 5.11. Statements to Certificateholders and Noteholders ........................................   64

ARTICLE VI THE SELLER AND THE ISSUER .....................................................................   65

   SECTION 6.01. Representations and Warranties of the Seller ............................................   65
   SECTION 6.02. Limitation on Liability of Seller and Others ............................................   69
   SECTION 6.03. Seller May Own Notes ....................................................................   69
   SECTION 6.04. Additional Covenants of the Seller ......................................................   70
   SECTION 6.05. Indemnities of the Issuer ...............................................................   70

ARTICLE VII THE SERVICER .................................................................................   72

   SECTION 7.01. Representations of Servicer .............................................................   72
   SECTION 7.02. Indemnities of Servicer .................................................................   74
   SECTION 7.03. Merger or Consolidation of, or Assumption of the Obligations of, Servicer; Resignation ..   76
   SECTION 7.04. Limitation on Liability of Servicer and Others ..........................................   77
   SECTION 7.05. Delegation of Duties ....................................................................   77
   SECTION 7.06. Certification Upon Satisfaction .........................................................   77

ARTICLE VIII DEFAULT .....................................................................................   78

   SECTION 8.01. Servicer Defaults .......................................................................   78
   SECTION 8.02. Appointment of Successor ................................................................   80
   SECTION 8.03. Notification to Class A Noteholders and Certificateholders ..............................   81
   SECTION 8.04. Waiver of Past Defaults .................................................................   81

ARTICLE IX THE TRUST COLLATERAL AGENT ....................................................................   82

   SECTION 9.01. Duties of the Trust Collateral Agent ....................................................   82
   SECTION 9.02. Rights of the Trust Collateral Agent ....................................................   83
   SECTION 9.03. Individual Rights of Trust Collateral Agent .............................................   85
   SECTION 9.04. Reports by Trust Collateral Agent to Holders ............................................   85
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                                       <C>
   SECTION 9.05. Compensation .........................................................................   85
   SECTION 9.06. Eligibility ..........................................................................   86
   SECTION 9.07. Trust Collateral Agent's Disclaimer ..................................................   86
   SECTION 9.08. Limitation on Liability ..............................................................   86
   SECTION 9.09. Reliance Upon Documents ..............................................................   87
   SECTION 9.10. Successor Trust Collateral Agent .....................................................   87
   SECTION 9.11. Representations and Warranties of the Trust Collateral Agent .........................   90
   SECTION 9.12. Waiver of Setoffs ....................................................................   90

ARTICLE X TERMINATION .................................................................................   91

   SECTION 10.01. Optional Purchase ...................................................................   91

ARTICLE XI MISCELLANEOUS PROVISIONS ...................................................................   91

   SECTION 11.01. Amendment ...........................................................................   91
   SECTION 11.02. Protection of Title to Trust ........................................................   93
   SECTION 11.03. Limitation on Rights of Class A Noteholders .........................................   95
   SECTION 11.04. Governing Law .......................................................................   96
   SECTION 11.05. Notices .............................................................................   96
   SECTION 11.06. Severability of Provisions ..........................................................   97
   SECTION 11.07. Assignment ..........................................................................   97
   SECTION 11.08. Further Assurances ..................................................................   97
   SECTION 11.09. No Waiver; Cumulative Remedies ......................................................   97
   SECTION 11.10. Third-Party Beneficiaries ...........................................................   98
   SECTION 11.11. Actions by Noteholders ..............................................................   98
   SECTION 11.12. Corporate Obligation ................................................................   98
   SECTION 11.13. Covenant Not to File a Bankruptcy Petition ..........................................   98
   SECTION 11.14. Controlling Party ...................................................................   99
</TABLE>

EXHIBITS

Exhibit A Reserved
Exhibit B Form of Servicer's Certificate
Exhibit C Investor Certification
Exhibit D Form of Dealer Agreement
Exhibit E Form of Servicer's Acknowledgment
Exhibit F Form of Contracts
Exhibit G Collection Guidelines
Exhibit H Credit Guidelines
Exhibit I Covenant Compliance Report

                                      iii
<PAGE>

SCHEDULES

Schedule A      Dealer Loans, Dealer Agreements and Contracts
Schedule B      Forecasted Collections
Schedule C      Perfection Representations, Warranties and Covenants
Schedule D      Financial Covenants and Related Definitions

                                       iv
<PAGE>

            This Sale and Servicing Agreement, dated as of August 25, 2004,
among CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1 (the "Issuer" or the
"Trust"), CREDIT ACCEPTANCE FUNDING LLC 2004-1, a Delaware limited liability
company, as Seller (the "Seller"), CREDIT ACCEPTANCE CORPORATION, a Michigan
corporation, in its individual capacity ("Credit Acceptance") and as Servicer
(the "Servicer"), JPMORGAN CHASE BANK, a New York banking corporation, in its
capacity as Trust Collateral Agent and Indenture Trustee (the "Trust Collateral
Agent" and the "Indenture Trustee"), and SYSTEMS & SERVICES TECHNOLOGIES, INC.,
a Delaware corporation, as Backup Servicer (the "Backup Servicer").

            WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

            SECTION 1.01. Definitions.

Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings. Terms used herein
but not defined herein shall have the meaning given such terms in the Indenture.

            "Adjusted Collateral Amount" means, on any Distribution Date, during
the Revolving Period, an amount equal to the sum of: (i) the Collateral Amount;
and (ii) the amount on deposit in the Principal Collection Account.

            "Advance Rate" means, on any Distribution Date, the ratio, expressed
as a percentage, where the numerator is equal to the Class A Note Balance and
the denominator is equal to the Collateral Amount.

            "Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. A Person shall not be deemed to be an
Affiliate of any person solely because such other Person has the contractual
right or obligation to manage such Person unless such other Person controls such
Person through equity ownership or otherwise.

            "Agreement" means this Sale and Servicing Agreement, as the same may
be amended or supplemented from time to time.

            "Aggregate Outstanding Eligible Loan Balance" means, on any date of
determination, the sum of the Outstanding Balances of all Eligible Loans on such
day.

<PAGE>

            "Aggregate Outstanding Net Eligible Loan Balance" means, on any date
of determination, the Aggregate Outstanding Eligible Loan Balance less the
related Loan Loss Reserves at the end of the most recent Collection Period.

            "Amortization Period" means the period of time beginning on the
earlier of (i) the close of business on the February 2005 Distribution Date, and
(ii) the automatic occurrence or declaration of an Early Amortization Event
pursuant to Section 2.02 hereof.

            "Amortization Period Additional Contract Collateral Amount" has the
meaning assigned to such term in Section 3.02(d)(i) hereof.

            "Amortization Period Additional Loan Collateral Amount" has the
meaning assigned to such term in Section 3.02(d)(i) hereof.

            "Amortization Period Payment Obligations" has the meaning assigned
to such term in Section 3.02(d)(ii) hereof.

            "Applicable Law" means, for any Person, all existing and future
applicable laws, rules, regulations (including proposed, temporary and final
income tax regulations), statutes, treaties, codes, ordinances, permits,
certificates, orders and licenses of and interpretations by any Governmental
Authority, and applicable judgments, decrees, injunctions, writs, orders, or
line action of any Court, arbitrator or other administrative, judicial, or
quasi-judicial tribunal or agency of competent jurisdiction.

            "Automatic Amortization Event" has the meaning assigned to such term
in Section 2.02(b) hereof.

            "Available Funds" means, with respect to any Distribution Date: (i)
all Collections (other than Dealer Collections and Repossession Expenses)
received by the Servicer, the Seller or the Originator during the related
Collection Period, (ii) all Purchase Amounts paid by the Seller, the Servicer or
the Originator and any amounts paid by the Originator in respect of the Limited
Repurchase Option during the related Collection Period, (iii) all investment
earnings and interest on amounts on deposit in the Reserve Account, the
Principal Collection Account and the Collection Account during the related
Collection Period, (iv) any amounts remaining in the Principal Collection
Account after the conclusion of the Revolving Period, and (v) on any
Distribution Date, any amounts on deposit in the Reserve Account in excess of
the Reserve Account Requirement, after giving effect to all deposits to and
withdrawals from the Reserve Account on such Distribution Date.

            "Backup Insurance Policy" means the note guaranty insurance policy
issued by the Backup Insurer to the Trust Collateral Agent for the benefit of
the Class A Noteholders with respect to the Class A Notes.

            "Backup Insurer" means XL Capital Assurance Inc., a New York
corporation.

            "Backup Insurer Default" means: (i) failure by the Backup Insurer to
make a payment required under the Backup Insurance Policy in accordance with its
terms; (ii) the occurrence of an involuntary insolvency event with respect to
the Backup Insurer which remains

                                       2
<PAGE>

unstayed for 60 consecutive days; (iii) consent by the Backup Insurer to the
appointment of a conservator or receiver or liquidator or other similar official
in any insolvency, readjustment of debt, marshaling of assets and liabilities,
rehabilitation or similar proceedings of or relating to the Backup Insurer or of
or relating to all or substantially all of its property; or (iv) the Backup
Insurer admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of or otherwise voluntarily
commences a case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar statute, makes an assignment for the benefit of
its creditors, or voluntarily suspends payments of its obligations.

            "Backup Insurer Preference Amount" has the meaning set forth in
Section 5.07(c)(i) hereof.

            "Backup Insurer Premium" has the meaning given such term in the
Insurance Agreement.

            "Backup Insurer Premium Letter" means the premium letter, dated the
date hereof, among the Backup Insurer, the Servicer, the Issuer and the Trust
Collateral Agent.

            "Backup Insurer Reimbursement Obligations" means any overdue Backup
Insurer Premium amounts payable pursuant to the Insurance Agreement, and any
payments made on the Backup Insurance Policy, and any other amounts owing to the
Backup Insurer under the Insurance Agreement, the Backup Insurer Premium Letter
or any other Basic Document, in each case, together with interest thereon at the
Prime Rate (as defined in the Insurance Agreement) plus 2.0%.

            "Backup Servicer" means SST.

            "Backup Servicing Agreement" means the Backup Servicing Agreement
dated as of the date hereof, among the Backup Servicer, the Class A Insurer, the
Backup Insurer, Credit Acceptance, the Seller, the Issuer and the Trust
Collateral Agent.

            "Backup Servicing Fee" means, as to each Distribution Date, $4,000;
provided, however, that if the Backup Servicer becomes the successor Servicer,
such fee shall no longer be paid.

            "Bankruptcy Code" means the United States Bankruptcy Reform Act of
1978 (11 U.S.C. Section 101, et seq.), as amended from time to time.

            "Basic Documents" means this Agreement, the Certificate of Trust (as
defined in the Trust Agreement), the Trust Agreement, the Backup Servicing
Agreement, the Indenture, the Contribution Agreement, the Insurance Agreement,
the Initial Purchaser Agreement, the Intercreditor Agreement, the Class A
Insurer Premium Letter, the Backup Insurer Premium Letter, the Class A Notes and
all other documents and certificates delivered in connection therewith.

            "Benefit Plan" has the meaning given such term in the Trust
Agreement.

                                       3
<PAGE>

            "Business Day" means any day other than a Saturday or a Sunday on
which banking institutions are not required or authorized to be closed in New
York, New York or Detroit, Michigan (or, if the Backup Servicer has become the
successor Servicer, Missouri or Indiana).

            "Capped Backup Servicer and Trustee Fees and Expenses" means, with
respect to any Distribution Date, in respect of fees, indemnification amounts
and expenses due to the Backup Servicer in its capacity as Backup Servicer, the
Owner Trustee, the Indenture Trustee and the Trust Collateral Agent: (i) prior
to the occurrence of an Indenture Event of Default, an amount not to exceed
$15,000 for any Distribution Date, in the aggregate; and (ii) after the
occurrence of an Indenture Event of Default, but prior to the acceleration of
the Class A Notes, (A) to the Backup Servicer, the Indenture Trustee and the
Trust Collateral Agent, an amount not to exceed $20,850 for any Distribution
Date, in the aggregate; and (B) to the Owner Trustee, an amount not to exceed
$5,000 for any Distribution Date.

            "Capped Servicing Fee" means, with respect to the Servicing Fee
payable to the Backup Servicer if it has become Servicer and any Distribution
Date, an amount equal to the product of 10.00% and Collections for the related
Collection Period.

            "Certificate" has the meaning given such term in the Trust
Agreement.

            "Certificate Distribution Account" has the meaning assigned to such
term in Section 5.01(a)(iii) hereof.

            "Certificateholder" has the meaning given such term in the Trust
Agreement.

            "Certificate Interest" means the allocable percentage interest of a
Certificate held by a Certificateholder.

            "Certificate of Title" means, with respect to any Financed Vehicle,
the certificate of title or other documentary evidence of ownership of such
Financed Vehicle as issued by the department, agency or official of the
jurisdiction (whether in paper or electronic form) in which such Financed
Vehicle is titled, responsible for accepting applications for, and maintaining
records regarding, certificates of title and liens thereon.

            "Certificate Register" and "Certificate Registrar" means the
register mentioned and the registrar appointed pursuant to Section 3.4 of the
Trust Agreement.

            "Class A Insurer" means Radian Asset Assurance Inc., a New York
stock insurance company.

            "Class A Insurer Default" means: (i) failure by the Class A Insurer
to make a payment required under the Class A Note Insurance Policy in accordance
with its terms; (ii) the occurrence of an involuntary insolvency event with
respect to the Class A Insurer which remains unstayed for 60 consecutive days;
(iii) consent by the Class A Insurer to the appointment of a conservator or
receiver or liquidator or other similar official in any insolvency, readjustment
of debt, marshaling of assets and liabilities, rehabilitation or similar
proceedings of or relating to the Class A Insurer or of or relating to all or
substantially all of its property; (iv) the Backup Insurer

                                       4
<PAGE>

makes a payment under the Backup Insurance Policy in accordance with its terms;
or (v) the Class A Insurer admits in writing its inability to pay its debts
generally as they become due, files a petition to take advantage of or otherwise
voluntarily commences a case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar statute, makes an assignment for the
benefit of its creditors, or voluntarily suspends payments of its obligations.

            "Class A Insurer Interest Shortfall Payment" has the meaning set
forth in Section 5.06(a)(iii) hereof.

            "Class A Insurer Preference Payment" has the meaning set forth in
Section 5.06(c)(i) hereof.

            "Class A Insurer Premium" has the meaning given such term in the
Insurance Agreement.

            "Class A Insurer Premium Letter" means the premium letter, dated the
date hereof, among the Class A Insurer, the Servicer, the Issuer and the Trust
Collateral Agent.

            "Class A Insurer Premium Supplement" has the meaning set forth in
the Class A Insurer Premium Letter.

            "Class A Insurer Principal Payment" has the meaning set forth in
Section 5.06(a)(iii) hereof.

            "Class A Insurer Reimbursement Obligations" means any overdue Class
A Insurer Premium and Class A Insurer Premium Supplement amounts payable
pursuant to the Insurance Agreement, and any payments made on the Class A Note
Insurance Policy, and any other amounts owing to the Class A Insurer under the
Insurance Agreement, the Class A Insurer Premium Letter or any other Basic
Document, in each case, together with interest thereon at the Prime Rate (as
defined in the Insurance Agreement) plus 2.0%.

            "Class A Interest Carryover Shortfall" means, as of the close of
business on any Distribution Date, the excess of the Class A Interest
Distributable Amount for such Distribution Date plus any outstanding Class A
Interest Carryover Shortfall from the preceding Distribution Date plus interest
on such outstanding Class A Interest Carryover Shortfall, to the extent
permitted by law, at the Class A Note Rate from and including such preceding
Distribution Date to but excluding the current Distribution Date, over the
amount in respect of interest on the Class A Notes that was actually deposited
in the Class A Note Distribution Account on such current Distribution Date.

            "Class A Interest Distributable Amount" means, with respect to any
Distribution Date, interest accrued from and including the preceding
Distribution Date (or, in the case of the first Distribution Date, from the
Closing Date) to, but excluding, the current Distribution Date, at the Class A
Note Rate on the Class A Note Balance immediately prior to such Distribution
Date.

            "Class A Note Balance" equals, initially, $100,000,000 and
thereafter equals the initial Class A Note Balance reduced by all amounts
allocable to principal previously distributed to Class A Noteholders.

                                       5
<PAGE>

            "Class A Note Distribution Account" means the Class A Note
Distribution Account established and maintained pursuant to Section 5.01(a)(ii)
hereof.

            "Class A Note Insurance Policy" means the note guaranty insurance
policy issued by the Class A Insurer to the Trust Collateral Agent for the
benefit of the Class A Noteholders and the Backup Insurer with respect to the
Class A Notes.

            "Class A Principal Distributable Amount" means, for any Distribution
Date (A) during the Revolving Period, $0; and (B) during the Amortization
Period, an amount equal to the lesser of: (i) Available Funds remaining after
payment of the amounts set forth in clauses (i) through (vi) of Section 5.08(a)
hereto; and (ii) the Class A Note Balance; provided, however, on the Stated
Final Maturity, the Class A Principal Distributable Amount will equal the Class
A Note Balance.

            "Closing Date" means August 25, 2004.

            "Collateral Amount" means, on any Distribution Date, an amount equal
to the Aggregate Outstanding Net Eligible Loan Balance (less the aggregate of
the Overconcentration Loan Amounts and the aggregate of the Dealer Loan Excess
Advance Amounts, if any), after giving effect to all purchases of Dealer Loans
on such date. Solely for purposes of calculating the "Collateral Amount", the
determination of whether a Dealer Loan is an "Eligible Loan" shall be made as if
such Dealer Loan were transferred on the date of such calculation.

            "Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a)(i) hereof.

            "Collection Guidelines" means, with respect to Credit Acceptance,
the policies and procedures of the Servicer in effect on the Closing Date
relating to the collection of amounts due on the Contracts and the Dealer Loans
and as amended from time to time in accordance with the Basic Documents, and
with respect to the Backup Servicer, as successor Servicer, the servicing
policies and procedures set forth in the Backup Servicing Agreement.

            "Collection Period" means, with respect to each Distribution Date,
the preceding calendar month. Any amount stated "as of the close of business on
the last day of a Collection Period" shall give effect to all collections,
charge-offs, reserve adjustments and other account activity during such
Collection Period.

            "Collections" means, with respect to any Collection Period, all
payments (including Income Collections, Principal Collections, Dealer
Collections, Recoveries, credit-related insurance proceeds and proceeds of the
Related Security and, so long as Credit Acceptance is the Servicer, excluding
certain recovery and repossession expenses, in accordance with the terms of the
Dealer Agreements) received by the Servicer, the Originator, the Issuer or the
Seller on or after the Cut-off Date in respect of the Dealer Loans and Contracts
in the form of cash, checks, wire transfers or other form of payment in
accordance with the Dealer Loans, the Dealer Agreements and the Contracts.

            "Comerica Credit Agreement" means that certain Third Amended and
Restated Credit Acceptance Corporation Credit Agreement, dated as of June 9,
2004, with Comerica

                                       6
<PAGE>

Bank, as administrative agent and collateral agent, and Banc of America
Securities, LLC, as sole lead arranger and sole book manager.

            "Computer Tape" means a computer tape or diskette (or other means of
electronic transmission acceptable to the Backup Servicer and the Controlling
Party) in a readable format acceptable to the Backup Servicer and the
Controlling Party.

            "Continued Errors" has the meaning set forth in Section 4.09(b)(iv)
hereof.

            "Contract" means any retail installment sales contract, in
substantially one of the forms attached hereto as Exhibit F, relating to the
sale of a new or used automobile, light-duty truck, minivan or sport utility
vehicle originated by a Dealer and in which Credit Acceptance shall have been
granted a security interest and shall have acquired certain other ownership
rights under the related Dealer Agreement to secure the related Dealer's
obligation to repay one or more related Dealer Loans.

            "Contract Buy-Back Rate" means on any date of determination, a
fraction, expressed as a percentage, the numerator of which is the Class A Note
Balance as of the last day of the preceding Collection Period and the
denominator of which is the Outstanding Balance of all Eligible Contracts as of
the last day of the preceding Collection Period.

            "Contract File" means with respect to each Contract, the physical
and/or electronic files in which Credit Acceptance maintains the fully executed
original counterpart (for UCC purposes) of the Contract (to the extent required
in accordance with Section 3.03 of this Agreement), either a standard assurance
in the form commonly used in the industry relating to the provision of a
certificate of title or other evidence of lien, the original instruments
modifying the terms and conditions of such Contract and the original
endorsements or assignments of such Contract.

            "Contribution Agreement" means the Contribution Agreement dated as
of even date herewith, relating to the contribution by Credit Acceptance to the
Seller of the Contributed Property, as defined therein.

            "Corporate Trust Office" has the meaning given such term in the
Trust Agreement.

            "Credit Acceptance" means Credit Acceptance Corporation, a Michigan
corporation.

            "Credit Guidelines" means the policies and procedures of Credit
Acceptance, relating to the extension of credit to automobile, light-duty truck,
minivan and/or sport utility dealers in respect of retail installment contracts
for the sale of automobiles, light-duty trucks, minivans and/or sport utility
vehicles including, without limitation, the policies and procedures for
determining the creditworthiness of Dealers and relating to the extension of
credit to such Dealers and the maintenance of installment sale contracts, as in
effect on the Cut-off Date and as amended from time to time in accordance with
the Basic Documents, attached hereto as Exhibit H.

                                       7
<PAGE>

            "Cut-off Date" means, (i) with respect to Dealer Loans and related
collateral to be transferred to the Issuer on the Closing Date, the close of
business on June 30, 2004, and (ii) with respect to Dealer Loans and related
collateral purchased by the Issuer on each Distribution Date during the
Revolving Period, the close of business on the last day of the immediately
preceding Collection Period.

            "Dealer" means any new or used automobile, light-duty truck, minivan
and/or sport utility vehicle dealer who has entered into a Dealer Agreement with
Credit Acceptance.

            "Dealer Agreement" means, each Dealer Agreement between the
Originator and the related Dealer substantially in the form of Exhibit D
attached hereto; provided, however, that the term "Dealer Agreement" shall, for
the purposes of this Agreement, include only those Dealer Agreements identified
from time to time on Schedule A hereto, as amended or supplemented from time to
time in accordance herewith.

            "Dealer Collections" means, with respect to any Collection Period,
the Collections received by the Servicer during such Collection Period which
pursuant to the terms of any Dealer Agreement, are required to be remitted to
the applicable Dealer.

            "Dealer Concentration Limit" means, with respect to any Dealer, an
amount equal to: (A) with respect to the Closing Date, 2.5% of the Aggregate
Outstanding Net Eligible Loan Balance as of the initial Cut-off Date and (B)
with respect to each Distribution Date during the Revolving Period on which
Dealer Loans are purchased by the Issuer, 2.5% of the Aggregate Outstanding Net
Eligible Loan Balance as of such Distribution Date, after giving effect to all
Collections received during the related Collection Period and the purchase of
Dealer Loans on such Distribution Date; provided, that for the ten largest
Dealers (measured by the Aggregate Outstanding Net Eligible Loan Balance of each
such Dealer), such limit shall be equal to 18.0% of the Aggregate Outstanding
Net Eligible Loan Balance of all Dealer Loans on the initial Cut-off Date or
each Distribution Date during the Revolving Period on which Dealer Loans are
purchased by the Issuer, as the case may be.

            "Dealer Loan" means a group of advances made by the Originator to a
Dealer in respect of an identified group of Contracts, all of which secure
repayment thereof; provided, however, that the term "Dealer Loan" shall, for the
purposes of this Agreement, include only those Dealer Loans identified from time
to time on Schedule A hereto, as amended or supplemented from time to time in
accordance with the terms of this Agreement.

            "Dealer Loan Excess Advance Amount" means, with respect to any
Eligible Loan on any Distribution Date, the amount by which the Net Loan Balance
of such Eligible Loan, on the date it was originated, exceeds 70% of the
Outstanding Balance of the related Eligible Contracts on their dates of
origination.

            "Defaulted Contract" means each Contract for which the amounts due
thereunder should be charged off in accordance with the Servicer's accounting
policies in effect from time to time. A Contract shall become a Defaulted
Contract on the day on which the amounts due under such Contract are recorded as
charged off on the Servicer's master file of Contracts, but, in any event, shall
be deemed a Defaulted Contract no later than the earlier of (x) the day it

                                       8
<PAGE>

becomes 90 days delinquent, based on the date the last payment thereon was
received by the Servicer and (y) the day on which an auction check is posted to
the relevant account.

            "Delivery" when used with respect to property forming a part of a
Trust Account means:

            (a) with respect to bankers' acceptances, commercial paper,
      negotiable certificates of deposit and other obligations that constitute
      "instruments" within the meaning of Section 9-102(a)(47) of the UCC and
      are susceptible of physical delivery, transfer thereof by physical
      delivery to the Trust Collateral Agent indorsed to, or registered in the
      name of, the Trust Collateral Agent or its nominee or indorsed in blank,
      and, with respect to a certificated security (as defined in Section 8-102
      of the UCC) transfer thereof (i) by delivery of such certificated security
      to the Trust Collateral Agent or by delivery of such certificated security
      to a securities intermediary indorsed to, or registered in the name of,
      the Trust Collateral Agent or its nominee or indorsed in blank to a
      securities intermediary (as defined in Section 8-102(a)(14) of the UCC)
      and the making by such securities intermediary of entries on its books and
      records identifying such certificated securities as belonging to the Trust
      Collateral Agent and the sending by such securities intermediary of a
      confirmation of the purchase of such certificated security by the Trust
      Collateral Agent, or (ii) by delivery thereof to a "clearing corporation"
      (as defined in Section 8-102(a)(5) of the UCC) and the making by such
      clearing corporation of appropriate entries on its books reducing the
      appropriate securities account of the originator and increasing the
      appropriate securities account of a securities intermediary by the amount
      of such certificated security, the identification by the clearing
      corporation of the certificated securities for the sole and exclusive
      account of the securities intermediary, the maintenance of such
      certificated securities by such clearing corporation or its nominee
      subject to the clearing corporation's exclusive control, the sending of a
      confirmation by the securities intermediary of the purchase by the Trust
      Collateral Agent of such securities and the making by such securities
      intermediary of entries on its books and records identifying such
      certificated securities as belonging to the Trust Collateral Agent (all of
      the foregoing, "Physical Property"), and, in any event, any such Physical
      Property in registered form shall be registered in the name of the Trust
      Collateral Agent or its nominee or endorsed in blank; and such additional
      or alternative procedures as may hereafter become appropriate to effect
      the complete transfer of ownership of any such Eligible Investment to the
      Trust Collateral Agent, consistent with changes in applicable law or
      regulations or the interpretation thereof;

            (b) with respect to any security issued by the U.S. Treasury, the
      Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
      Association that is a book-entry security held through the Federal Reserve
      System pursuant to Federal book-entry regulations, the following
      procedures, all in accordance with applicable law, including applicable
      federal regulations and Articles 8 and 9 of the UCC: book-entry
      registration of such Eligible Investment to an appropriate book-entry
      account maintained with a Federal Reserve Bank by a securities
      intermediary which is also a "depositary" pursuant to applicable federal
      regulations and issuance by such securities intermediary of a deposit
      advice or other written confirmation of such book-entry registration to
      the Trust

                                       9
<PAGE>

      Collateral Agent of the purchase by the Trust Collateral Agent of such
      book-entry securities; the making by such securities intermediary of
      entries in its books and records identifying such book-entry security held
      through the Federal Reserve System pursuant to Federal book-entry
      regulations as belonging to the Trust Collateral Agent and indicating that
      such securities intermediary holds such Eligible Investment solely as
      agent for the Trust Collateral Agent; and such additional or alternative
      procedures as may hereafter become appropriate to effect complete transfer
      of ownership of any such Eligible Investment to the Trust Collateral
      Agent, consistent with changes in applicable law or regulations or the
      interpretation thereof; and

            (c) with respect to any Eligible Investment that is an
      uncertificated security under Article 8 of the UCC and that is not
      governed by clause (b) above, registration on the books and records of the
      issuer thereof in the name of the Trust Collateral Agent or its nominee or
      the securities intermediary, the sending of a confirmation by the
      securities intermediary of the purchase by the Trust Collateral Agent or
      its nominee of such uncertificated security, and the making by such
      securities intermediary of entries on its books and records identifying
      such uncertificated certificates as belonging to the Trust Collateral
      Agent.

            In furtherance of the foregoing, any Eligible Investments held by
the Trust Collateral Agent through a securities intermediary shall be held only
pursuant to a control agreement entered into among the Seller, the Trust
Collateral Agent and the securities intermediary, pursuant to which the
securities intermediary agrees to credit all financial assets (as defined in
Section 8-102(a)(9) of the UCC) purchased (as defined in Section 1-201(32) of
the UCC) at the direction of the Trust Collateral Agent to the securities
account maintained by the securities intermediary for the benefit of the Trust
Collateral Agent and agrees to comply with entitlement orders (as defined in
Section 8-102(a)(8) of the UCC) of the Trust Collateral Agent without the
further consent of the Seller and pursuant to which the securities intermediary
waives any prior lien on all financial assets credited to such securities
account to which it might otherwise be entitled. Such control agreement shall
initially be governed by New York law and the Trust Collateral Agent shall not
amend the initial control agreement or enter into a control agreement with a
successor securities intermediary which in either event provides that the laws
of a state other than New York shall govern, without first obtaining a
continuation of perfection and priority opinion under the laws of such new state
which is, acceptable to the Controlling Party.

            "Determination Date" means the fifth Business Day prior to the
related Distribution Date.

            "Discretionary Amortization Event" has the meaning assigned to such
term in Section 2.02(c) hereof.

            "Distribution Date" means, for each Collection Period, the 15th day
of the following month, or if the 15th day is not a Business Day, the next
following Business Day, commencing with the First Distribution Date.

                                       10
<PAGE>

            "Early Amortization Event" means, collectively, Automatic
Amortization Events and Discretionary Amortization Events.

            "Eligible Account" shall mean a non-interest bearing segregated
trust account or accounts maintained with an institution whose deposits are
insured by the FDIC, the unsecured and uncollateralized long term debt
obligations of which institution shall be rated "AA-" or higher by S&P and "Aa3"
or higher by Moody's and in the highest short term rating category by the Rating
Agencies, and which is (i) a federal savings and loan association duly
organized, validly existing and in good standing under the federal banking laws,
(ii) an institution duly organized, validly existing and in good standing under
the applicable banking laws of any state, (iii) a national banking association
duly organized, validly existing and in good standing under the federal banking
laws, (iv) a principal subsidiary of a bank holding company, or (v) approved in
writing by the Controlling Party, and, as confirmed in writing by the Rating
Agencies, will not result in the downgrade of the ratings of the Class A Notes,
without regard to the Class A Note Insurance Policy or the Backup Insurance
Policy.

            "Eligible Contract" means each Contract which at the time of its
pledge by the applicable Dealer to the Originator satisfied the requirements for
a "Qualifying Receivable" set forth in the related Dealer Agreement; provided,
however, that a Contract that has become subject to the payment of a Purchase
Amount in accordance with Section 3.02 hereof or Section 4.07 hereof (regardless
of whether such Purchase Amount is actually paid) shall not constitute an
"Eligible Contract".

            "Eligible Dealer Agreement" means each Dealer Agreement:

            (a) which was originated by the Originator in compliance with all
      applicable requirements of law and which complies with all applicable
      requirements of law;

            (b) with respect to which all material consents, licenses, approvals
      or authorizations of, or registrations or declarations with, any
      Governmental Authority required to be obtained, effected or given by the
      Seller, by the Originator or by the Servicer in connection with the
      origination of such Dealer Agreement or the execution, delivery and
      performance by the Seller, by the Originator or by the Servicer of such
      Dealer Agreement have been duly obtained, effected or given and are in
      full force and effect;

            (c) as to which at the time of the sale of rights thereunder to the
      Trust, the Seller will have good and marketable title thereto, free and
      clear of all Liens;

            (d) the Originator's rights under which have been the subject of a
      valid grant by the Originator of a first priority perfected security
      interest in such rights and in the proceeds thereof in favor of the
      Seller;

            (e) which will at all times be the legal, valid and binding
      obligation of the Dealer party thereto (it being understood that recourse
      for such payment obligation shall be limited to the extent set forth in
      the Dealer Agreement), enforceable against such Dealer in accordance with
      its terms, except as such enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or other similar laws,
      now

                                       11
<PAGE>

      or hereafter in effect, affecting the enforcement of creditors' rights in
      general and except as such enforceability may be limited by general
      principles of equity (whether considered in a suit at law or in equity);

            (f) which constitutes either a "general intangible" or "tangible
      chattel paper" under and as defined in Article 9 of the UCC;

            (g) which, at the time of the sale of the rights to payment
      thereunder to the Trust, no rights to payment thereunder have been waived
      or modified;

            (h) which is not subject to any right of rescission, setoff,
      counterclaim or other defense (including the defense of usury), other than
      defenses arising out of applicable bankruptcy, insolvency, reorganization,
      moratorium or other similar laws affecting the enforcement of creditors'
      rights in general;

            (i) as to which the Originator, the Servicer and the Seller have
      satisfied all obligations to be fulfilled at the time the rights to
      payment thereunder are transferred to the Trust;

            (j) as to which the related Dealer has not asserted that such
      agreement is void or unenforceable;

            (k) as to which the related Dealer is not an Affiliate of an
      executive of Credit Acceptance or an Affiliate of Credit Acceptance;

            (l) as to which the related Dealer is located in the United States;

            (m) as to which the related Dealer is not bankrupt or insolvent; and

            (n) as to which none of the Originator, the Servicer nor the Seller
      has done anything, at the time of its sale to the Trust, to impair the
      rights of the Trust therein.

            "Eligible Investments" mean any one or more of the following types
of investments which mature no later than the Business Day preceding each
Distribution Date:

            (i) direct obligations of, and obligations fully guaranteed as to
      timely payment by, the United States of America;

            (ii) demand deposits, time deposits or certificates of deposit of
      any depository institution (including any Affiliate of the Seller, the
      Servicer, the Trust Collateral Agent, the Indenture Trustee or the Owner
      Trustee) or trust company incorporated under the laws of the United States
      of America or any state thereof or the District of Columbia (or any
      domestic branch of a foreign bank) and subject to supervision and
      examination by Federal or state banking or depository institution
      authorities (including depository receipts issued by any such institution
      or trust company as custodian with respect to any obligation referred to
      in clause (i) above or a portion of such obligation for the benefit of the
      holders of such depository receipts); provided, however, that at the time
      of the investment or contractual commitment to invest therein (which shall
      be deemed to be

                                       12
<PAGE>

      made again each time funds are reinvested following each Distribution
      Date), the commercial paper or other short-term senior unsecured debt
      obligations (other than such obligations the rating of which is based on
      the credit of a Person other than such depository institution or trust
      company) of such depository institution or trust company shall have a
      credit rating from Standard & Poor's of at least A-1+ and from Moody's of
      Prime-1;

            (iii) repurchase obligations with respect to any security that is a
      direct obligation of, or fully guaranteed by, the United States of America
      or any agency or instrumentality thereof the obligations of which are
      backed by the full faith and credit of the United States of America, in
      either case entered into with a depository institution or trust company
      (acting as principal) referred to in clause (ii) above;

            (iv) commercial paper (including commercial paper of any affiliate
      of the Seller, the Servicer, the Trust Collateral Agent, the Indenture
      Trustee or the Owner Trustee) having, at the time of the investment or
      contractual commitment to invest therein, a rating from Standard & Poor's
      of at least A-1+ and from Moody's of Prime-1;

            (v) investments in money market funds (including funds for which the
      Seller, the Servicer, the Trust Collateral Agent, the Indenture Trustee or
      Owner Trustee or any of their respective Affiliates is investment manager
      or advisor) having a rating from Standard & Poor's of AAA-m or AAAm-G and
      from Moody's of Aaa;

            (vi) bankers' acceptances issued by any depository institution or
      trust company referred to in clause (ii) above; and

            (vii) any other demand or time deposit, obligation, security or
      investment as may be acceptable, so long as both a Class A Insurer Default
      and Backup Insurer Default are not continuing, to the Controlling Party
      and, as confirmed in writing by the Rating Agencies, will not result in
      the downgrade of the ratings of the Class A Notes, without regard to the
      Class A Note Insurance Policy or the Backup Insurance Policy.

            Any of the foregoing Eligible Investments may be purchased from, by
or through the Owner Trustee, the Indenture Trustee or the Trust Collateral
Agent or any of their respective Affiliates.

            "Eligible Loan" means each Dealer Loan, at the time of its transfer
to the Seller under the Contribution Agreement:

            (a) which has arisen under a Dealer Agreement that, on the day the
      Dealer Loan was created, qualified as an Eligible Dealer Agreement;

            (b) which was created in compliance with all applicable requirements
      of law and pursuant to an Eligible Dealer Agreement which complies with
      all applicable requirements of law;

            (c) with respect to which all material consents, licenses, approvals
      or authorizations of, or registrations or declarations with, any
      Governmental Authority

                                       13
<PAGE>

      required to be obtained, effected or given by the Originator, in
      connection with the creation of such Dealer Loan or the execution,
      delivery and performance by the Originator, of the related Eligible Dealer
      Agreement have been duly obtained, effected or given and are in full force
      and effect;

            (d) as to which at the time of the sale of such Dealer Loan to the
      Trust, the Seller will have good and marketable title thereto, free and
      clear of all Liens;

            (e) as to which a valid first priority perfected security interest
      in such Dealer Loan, related security and in the Proceeds thereof has been
      granted by the Originator in favor of the Seller, by the Seller in favor
      of the Issuer and by the Issuer in favor of the Indenture Trustee;

            (f) which will at all times be the legal, valid and binding payment
      obligation of the Obligor thereof (it being understood that recourse for
      such payment obligation shall be limited to the extent set forth in the
      Dealer Agreement), enforceable against such Obligor in accordance with its
      terms, except as such enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or other similar laws,
      now or hereafter in effect, affecting the enforcement of creditors' rights
      in general and except as such enforceability may be limited by general
      principles of equity (whether considered in a suit at law or in equity);

            (g) which constitutes a "general intangible" under and as defined in
      Article 9 of the UCC;

            (h) which is denominated and payable in United States dollars;

            (i) which, at the time of its sale to the Trust, has not been waived
      or modified;

            (j) which is not subject to any right of rescission (subject to the
      rights of the related Dealer to repay the outstanding balance thereof and
      terminate the related Dealer Agreement), setoff, counterclaim or other
      defense (including the defense of usury), other than defenses arising out
      of applicable bankruptcy, insolvency, reorganization, moratorium or other
      similar laws affecting the enforcement of creditors' rights in general;

            (k) as to which the Originator, the Servicer and the Seller have
      satisfied all obligations to be fulfilled at the time it is pledged to the
      Trust;

            (l) as to which the related Dealer has not asserted that the related
      Dealer Agreement is void or unenforceable;

            (m) as to which the related Dealer is not bankrupt or insolvent;

            (n) as to which none of the Originator, the Servicer nor the Seller
      has done anything, at the time of its sale to the Trust and subsequent
      pledge to the Indenture Trustee, to impair the rights of the Trust or the
      Indenture Trustee, as the case may be;

                                       14
<PAGE>

            (o) has not become subject to the payment of a Purchase Amount in
      accordance with Section 3.02 hereof or Section 4.07 hereof (regardless of
      whether such Purchase Amount is actually paid); and

            (p) the proceeds of which were used to finance the purchases of new
      or used automobiles and/or light-duty trucks and related products.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

            "ERISA Affiliate" means Credit Acceptance and each entity, whether
or not incorporated, which is affiliated with Credit Acceptance pursuant to
Section 414(b), (c), (m) or (o) of the Code.

            "Errors" has the meaning set forth in Section 4.09(a)(iv) hereof.

            "Final Score" means the final output from the Originator's
proprietary credit scoring process, which, when divided by 1,000, represents the
Originator's expectations of the ultimate collection rate on a contract at
inception.

            "Financed Vehicle" means, with respect to a Contract, any new or
used automobile, light-duty truck, minivan or sport utility vehicle, together
with all accessories thereto, securing the related Obligor's indebtedness
thereunder.

            "Financial Covenants" means the financial covenants of the Servicer
set forth on Schedule D hereto.

            "First Distribution Date" means September 15, 2004.

            "Forecasted Collections" means the expected amount of collections to
be received with respect to the Contracts each month as determined by Credit
Acceptance in accordance with its forecasting model, set forth on Schedule B
hereto.

            "GAAP" means generally accepted accounting principles as in effect
from time to time in the United States.

            "Governmental Authority" means any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over such Person.

            "Income Collections" means, with respect to any Collection Period,
all Collections received in respect of any servicing fee or finance charge as
stated in, and determined in accordance with, each respective Dealer Agreement.

                                       15
<PAGE>

            "Incomplete Contract" means any Contract the original of which is
not contained in the related Contract File as of the date for the verification
thereof set forth in Section 3.03(d) hereof.

            "Indenture" means the Indenture dated as of the date hereof, between
the Issuer and JPMorgan Chase Bank, as Indenture Trustee, as the same may be
amended and supplemented from time to time.

            "Independent" means a Person, who (1) is in fact independent of the
Seller and any of its Affiliates, (2) does not have any direct financial
interest or any material indirect financial interest in the Seller or in any
Affiliate of the Seller, and (3) is not connected with the Seller or Affiliate
as an officer, employee, promoter, underwriter, trustee, partner, director, or
person performing similar functions.

            "Independent Accountants" means a firm registered with the Public
Company Accounting Oversight Board that is Independent and is acceptable to the
Controlling Party.

            "Ineligible Contract" means each contract other than an Eligible
Contract.

            "Ineligible Loan" means each Dealer Loan other than an Eligible
Loan.

            "Initial Purchaser Agreement" means the Initial Purchaser Agreement
dated August 17, 2004, by and among the Issuer, Credit Acceptance, the Seller
and Wachovia Capital Markets, LLC as the Initial Purchaser.

            "Initial Reserve Amount" means an amount equal to 1.0% of the
Aggregate Outstanding Net Eligible Loan Balance as of the initial Cut-off Date.

            "Initial Seller Property" has the meaning given to such term in
Section 2.01(a) hereof.

            "Insolvency Proceeds" means the proceeds, after all payments and
reserves from the sale of the assets of the Trust upon the dissolution of the
Trust because of an insolvency of the Seller.

            "Insurance Agreement" means the Insurance and Reimbursement
Agreement dated as of the date hereof, among the Class A Insurer, the Backup
Insurer, the Servicer, the Seller and the Issuer.

            "Insurance Premium" means the Class A Insurer Insurance Premium and
the Backup Insurer Insurance Premium.

            "Insurer Default" means a Class A Insurer Default or a Backup
Insurer Default, as the case may be.

            "Insurers" means the Class A Insurer and the Backup Insurer.

                                       16
<PAGE>

            "Intercreditor Agreement" means the Intercreditor Agreement dated as
of the date hereof among Credit Acceptance, CAC Warehouse Funding Corporation
II, Credit Acceptance Funding LLC 2003-1, Credit Acceptance Auto Dealer Loan
Trust 2003-1, the Seller, the Issuer, Wachovia Capital Markets, LLC, as agent,
JPMorgan Chase Bank, as indenture trustee and trust collateral agent under the
Indenture and under an indenture dated as of June 27, 2003 between JPMorgan
Chase Bank and Credit Acceptance Auto Dealer Loan Trust 2003-1, Comerica Bank,
and each other Person who becomes a party thereto after the date thereof.

            "Issuer" or "Trust" means Credit Acceptance Auto Dealer Loan Trust
2004-1, a Delaware statutory trust.

            "Late Fees" means if the Backup Servicer has become the successor
Servicer, any late fees collected with respect to any Contract in accordance
with the Collection Guidelines.

            "Lien" means with respect to a Dealer Loan, Dealer Agreement or
Contract or other property any security interest, lien, charge, pledge, equity,
or encumbrance of any kind (other than tax liens, mechanics' liens, liens of
collection attorneys or agents collecting the property subject to such tax or
mechanics' lien, and any liens which attach thereto by operation of law).

            "Limited Repurchase Option" means the one-time purchase option of
Credit Acceptance in accordance with Section 10.01(c) hereof.

            "Loan Loss Reserve" means the loan loss reserve, calculated in
accordance with Credit Acceptance's periodic analysis of the performance of each
Dealer, maintained against the Dealer Loans of such Dealer, consistent with the
Servicer's historic practices as such practices may be modified in order to
comply with generally accepted accounting principles in effect from time to
time.

            "Maximum Advance Rate" means 75.0%.

            "Minimum Collateral Amount" means on any Distribution Date during
the Revolving Period, an amount equal to the Class A Note Balance divided by the
Maximum Advance Rate.

            "Moody's" means Moody's Investors Service, Inc., and its successor
and assigns.

            "Multiemployer Plan" means a multiemployer plan (within the meaning
of Section 400 1(a)(3) of ERISA) in respect of which an ERISA Affiliate makes
contributions or has liability.

            "Net Loan Balance" means, with respect to any Dealer Loan, the
excess of the related Outstanding Balance over the related Loan Loss Reserve.

            "Obligor" means, with respect to any Contract, the person or persons
obligated to make payments with respect to such Contract, including any
guarantor thereof.

                                       17

<PAGE>

            "Officer's Certificate" means a certificate signed by the chairman
of the board, the vice chairman, the president, the chief accounting officer,
any executive vice president, any vice president, the treasurer, any assistant
treasurer, the secretary, any assistant secretary or the controller of the
Seller or the Servicer, as appropriate.

            "Opinion of Counsel" means one or more written opinions of counsel
who may, except as otherwise expressly provided in this Agreement or as
otherwise required by the Trust Collateral Agent or the Controlling Party, be
employees of or counsel to the Issuer and who shall be reasonably satisfactory
to the Trust Collateral Agent and the Controlling Party, and which shall comply
with any applicable requirements of Section 11.1 of the Indenture, and shall be
in form and substance reasonably satisfactory to the Trust Collateral Agent and
the Controlling Party.

            "Optional Purchase" means the optional purchase of the Trust
Property as set forth in Section 10.01 hereof.

            "Original Advance Rate" means, with respect to any Dealer, the
ratio, expressed as a percentage, where the numerator is equal to the sum of the
Outstanding Balance of all Eligible Loans of such Dealer on the dates such
Eligible Loans were originated and the denominator is equal to the sum of the
Outstanding Balance of all Eligible Contracts related to such Dealer on their
dates of origination.

            "Original Certificate Interest" means the percentage interest in the
Trust represented by the Certificate(s) initially authenticated and delivered by
the Owner Trustee and which is 100%.

            "Originator" means Credit Acceptance.

            "Outstanding Balance" means (i) with respect to any Contract on any
date of determination, all amounts owing under such Contract (whether considered
principal or as finance charges), on such date of determination which shall be
deemed to have been created at the end of the day on the date of processing of
such Contract and which shall be greater than or equal to zero; and (ii) with
respect to any Dealer Loan on any date of determination, the aggregate amount
advanced under such Dealer Loan, less all Collections applied through such date
of determination in accordance with the related Dealer Agreement to reduce the
balance of such Dealer Loan plus or minus any adjustments to such Dealer Loan
balance for other amounts owed by such Dealer to Credit Acceptance under the
related Dealer Agreement which Credit Acceptance is entitled to make thereunder.

            "Overconcentration Loan Amount" means, with respect to any Dealer,
the amount by which the Net Loan Balance of such Dealer's Eligible Loans, as of
the Closing Date or any Distribution Date during the Revolving Period on which
the Issuer purchases one or more Dealer Loans, as the case may be, exceeds the
Dealer Concentration Limit.

            "Owner Trustee" means Wachovia Bank of Delaware, National
Association, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement, its successors in interest or any successor Owner Trustee
under the Trust Agreement.

                                       18
<PAGE>

            "Owner Trustee's Fees" means (i) for the year commencing with the
Closing Date, $3,000, payable by the Issuer in advance to the Owner Trustee on
the Closing Date and (ii) thereafter, an amount equal to $250 on each
Distribution Date, payable by the Issuer to the Owner Trustee until the Class A
Notes are paid in full, in each case, plus reasonable out of pocket expenses not
to exceed $50,000 annually incurred by the Owner Trustee in fulfilling its
duties under the Basic Documents.

            "Person" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, limited liability company, or government or any agency or
political subdivision thereof.

            "Permitted Incomplete Contracts" means (a) with respect to the 120th
day after the Closing Date and the 120th day after each Distribution Date during
the Revolving Period, 2.0% of the aggregate number of Contract Files required to
be reviewed by each such date in accordance with Section 3.03(d)(i) hereof, and
(b) with respect to the 180th day after the Closing Date and the 180th day after
each Distribution Date during the Revolving Period, 2.0% of the aggregate number
of Contract Files required to be reviewed by each such date in accordance with
Section 3.03(d)(ii) hereof.

            "Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.

            "Preference Amount" shall have the meaning given such term in
Section 5.06(c)(i) hereof.

            "Principal Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a)(i) hereof.

            "Principal Collections" means, with respect to any Collection
Period, all Collections which are not Income Collections or Dealer Collections.

            "Principal Deficiency" means, on any Distribution Date other than
the Stated Final Maturity, the amount by which the Class A Note Balance (after
taking into account all distributions of principal to be made from Available
Funds on such Distribution Date plus amounts on deposit in the Reserve Account
available for the payment of principal) exceeds the Outstanding Balance of all
Eligible Contracts, other than Defaulted Contracts, as of the last day of the
related Collection Period.

            "Private Placement Memorandum" means the Private Placement
Memorandum dated August 17, 2004, relating to the private placement of the Class
A Notes.

            "Proceeds" means, with respect to any portion of the Trust Property,
all "proceeds", as such term is defined in Article 9 of the UCC, including
whatever is receivable or received when such portion of Trust Property is sold,
liquidated, foreclosed, exchanged, or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes all rights to payment with
respect to any insurance relating thereto.

            "Program" has the meaning set forth in Section 4.11(a) hereof.

                                       19

<PAGE>

            "Purchase Amount" means:

            (i) with respect to an Ineligible Loan (or Dealer Loan with respect
to which the payment of a Purchase Amount is required), an amount equal to the
product of: (A) the Net Loan Balance related to such Ineligible Loan (or Dealer
Loan with respect to which the payment of a Purchase Amount is required) as of
the last day of the preceding Collection Period; and (B) the Advance Rate in
effect on the Distribution Date during such preceding Collection Period;

            (ii) with respect to any Ineligible Contract (other than any
Incomplete Contract), the product of: (A) the Outstanding Balance of such
Ineligible Contract; and (B) the Contract Buy-Back Rate;

            (iii) with respect to a Contract for which payment is required to be
made in accordance with Section 3.02(b)(i)(B) hereof and with respect to each
review period described in Section 3.03(d)(ii) and (iii) hereof, the product of:
(A) the Outstanding Balance as of the last day of the preceding Collection
Period of all Incomplete Contracts for any such review period, divided by the
aggregate number of Contracts required to be reviewed by the end of such review
period, (B) the difference between (I) the total number of Incomplete Contracts
for such review period, and (II) the number of Permitted Incomplete Contracts
for such review period, and (C) the Contract Buy-Back Rate; and

            (iv) with respect to a Contract for which payment is required to be
made at the request of the Controlling Party in accordance with Section
3.02(b)(ii), the product of (A) the Outstanding Balance of the Contracts with
respect to which the Controlling Party has required payment and (B) the Contract
Buy-Back Rate,

            in each case, payable in the manner set forth in Section 5.04
hereof.

            "Purchased Loan" means a Dealer Loan with respect to which payment
is required to be made by the Seller, the Servicer or Credit Acceptance in
accordance with Section 3.02 or Section 4.07 hereof or Section 6.1 of the
Contribution Agreement, as applicable.

            "Rating Agencies" means, collectively Moody's, S&P and any other
nationally recognized statistical rating agency requested by the Seller or an
Affiliate thereof to rate any of the Class A Notes.

            "Records" means the Dealer Agreements, Contracts, Contract Files and
all other documents, books, records and other information (including, without
limitation, computer programs, tapes, discs, punch cards, data processing
software and related contracts, records and other media for storage of
information) maintained with respect to the Dealer Loans and the Contracts and
the related Obligors.

            "Recoveries" means all amounts, if any, received in respect of the
Trust Property by the Servicer, the Seller, the Issuer or the Originator with
respect to Defaulted Contracts.

            "Reimbursement Obligations" means the Class A Insurer Reimbursement
Obligations and the Backup Insurer Reimbursement Obligations.

                                       20

<PAGE>

            "Reliening Expenses" means any expenses incurred by the Backup
Servicer, if it has become the successor Servicer, in accordance with Sections
3.03(h)(ii) and 4.05 hereof, in connection with the retitling or reliening of
the Financed Vehicles.

            "Repossession Expenses" means, for any Collection Period, any
expenses payable pursuant to the terms of this Agreement, incurred by the Backup
Servicer, if it has become the successor Servicer, in connection with the
liquidation or repossession of any Financed Vehicle, in an aggregate amount not
to exceed the cash proceeds received by the Backup Servicer, if it has become
the successor Servicer from the disposition of such Financed Vehicles during the
related Collection Period.

            "Reserve Account" means the account established and maintained
pursuant to Section 5.01(a)(iv) hereof.

            "Reserve Account Requirement" means, with respect to any
Distribution Date, an amount equal to the lesser of: (A) 2.0% of the original
Class A Note Balance; and (B) the Class A Note Balance on such Distribution
Date, before giving effect to the payment of principal on such Distribution
Date.

            "Revolving Period" means the period beginning on the Closing Date
and terminating on the earlier of: (i) the close of business on February 15,
2005; and (ii) the automatic occurrence or declaration of an Early Amortization
Event.

            "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.

            "Securities" means the Class A Notes and the Certificates.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Seller" means Credit Acceptance Funding LLC 2004-1 and any
permitted successor thereto (in the same capacity).

            "Seller Property" means, collectively, the Initial Seller Property
and the Subsequent Seller Property.

            "Servicer" means Credit Acceptance, as the Servicer of the Dealer
Loans and the Contracts, and each successor to Credit Acceptance (in the same
capacity) appointed pursuant to Section 7.03 or 8.02 hereof.

            "Servicer Certificate" means a certificate substantially in the form
of Exhibit B hereto completed and executed by the Servicer by the chairman of
the board, the vice chairman, the president, any vice president, the treasurer,
any assistant treasurer, the chief accounting officer, the chief financial
officer, the secretary, any assistant secretary, the controller, or any
assistant controller of the Servicer pursuant to Section 4.09 hereof.

            "Servicer Default" is as defined in Section 8.01 hereof.

                                       21
<PAGE>

            "Servicer Expenses" means any expenses incurred by the Backup
Servicer, if it has become the successor Servicer hereunder, other than
Repossession Expenses, Reliening Expenses or Transition Expenses.

            "Servicer's Data Date" has the meaning set forth in Section 4.09(b)
hereof.

            "Servicer's Data File" has the meaning set forth in Section 4.09(b)
hereof.

            "Servicing Fee" means, for each Distribution Date, a fee payable to
the Servicer for services rendered during the related Collection Period, equal
to: (i) so long as Credit Acceptance is the Servicer, the product of (A) 6.00%
and (B) the total Collections for the related Collection Period, and (ii) if the
Backup Servicer is the Servicer, the sum of: (1) the greatest of: (a) the
product of 10.0% and total Collections for the related Collection Period; (b)
actual costs incurred by the Backup Servicer as successor Servicer; and (c) the
product of (x) $30.00 and (y) the aggregate number of Contracts serviced by it
during the related Collection Period, plus (2) without duplication, Late Fees
and Servicer Expenses; provided, however, with respect to each Distribution Date
on which the Backup Servicer is the Servicer, the Servicing Fee shall be at
least equal to $5,000.

            "SST" means Systems & Services Technologies, Inc., a Delaware
corporation.

            "State" means any state or commonwealth of the United States of
America, or the District of Columbia.

            "Stated Final Maturity" means, with respect to the Class A Notes,
August 17, 2009.

            "Subsequent Seller Property" has the meaning given to such term in
Section 2.02(a) hereof.

            "Subsequent Seller Property Purchase Price" means, as to the
Subsequent Seller Property purchased by the Trust on any Distribution Date
during the Revolving Period, an amount equal to the Aggregate Outstanding Net
Eligible Loan Balance of the Dealer Loans transferred to the Trust on such
Distribution Date, in the form of cash and/or capital contribution.

            "Transaction Parties" means, collectively, the Originator, the
Servicer, the Seller and the Issuer.

            "Transition Expenses" means, if the Backup Servicer has become the
successor Servicer, the sum of: (i) reasonable costs and expenses incurred by
the Backup Servicer in connection with its assumption of the servicing
obligations hereunder, related to travel, Obligor welcome letters, freight and
file shipping plus (ii) a boarding fee equal to the sum of: (A) the product of
$7.50 and the number of Contracts to be serviced with respect to the first
10,000 Contracts to be serviced; and (B) the product of $6.00 and the number of
Contracts in excess of 10,000 to be serviced with respect to any additional
Contracts to be serviced; provided, however, that the boarding fee shall not be
less than $50,000.

                                       22
<PAGE>

            "Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

            "Trust Accounts" means the Collection Account, the Principal
Collection Account, the Class A Note Distribution Account and the Reserve
Account.

            "Trust Agreement" means the Amended and Restated Trust Agreement
dated as of the date hereof, between the Seller and the Owner Trustee, as the
same may be amended and supplemented from time to time.

            "Trust Property" means the assets conveyed to the Trust pursuant to
Sections 2.01 and 2.02 hereof.

            "UCC" means the Uniform Commercial Code as in effect in the
respective jurisdiction, and with respect to the definition of "Delivery"
hereunder, refers to the UCC as adopted by the State of New York.

            "Weighted Average Original Advance Rate" means, with respect to each
Distribution Date during the Revolving Period, the ratio, expressed as a
percentage, where the numerator is equal to the aggregate for all Dealers of the
product of: (i) the Original Advance Rate of each Dealer; and (ii) the aggregate
outstanding Net Loan Balance of all Eligible Loans for such Dealer and the
denominator is equal to the Aggregate Outstanding Net Eligible Loan Balance.

            SECTION 1.02. Usage of Terms.

With respect to all terms in this Agreement, the singular includes the plural
and the plural the singular; words importing any gender include the other
gender; references to "writing" include printing, typing, lithography, and other
means of reproducing words in a visible form; references to agreements and other
contractual instruments include all subsequent amendments thereto or changes
therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; and the term "including" means "including without
limitation."

            SECTION 1.03. Closing Date and Record Date.

All references to the Record Date prior to the first Distribution Date in the
life of the Trust shall be to the Closing Date.

            SECTION 1.04. Section References.

All section references shall be to Sections in this Agreement (unless otherwise
provided).

                                       23
<PAGE>

            SECTION 1.05. Compliance Certificates.

Upon any application or request by the Seller or the Servicer to the Trust
Collateral Agent to take any action under any provision herein, the Seller or
the Servicer (as the case may be) shall furnish to the Trust Collateral Agent,
the Class A Insurer and the Backup Insurer an Officer's Certificate stating that
all conditions precedent, if any, provided for herein relating to the proposed
action have been complied with, except that in the case of any other such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate need be furnished.

            Every certificate with respect to compliance with a condition or
covenant provided herein shall include a statement that each individual signing
such certificate has read such covenant or condition and the definitions herein
relating thereto.

            SECTION 1.06. Directions.

            Unless otherwise specified herein, any directions required to be
given hereunder by the Controlling Party shall, in the case of the occurrence
and continuance of both a Class A Insurer Default and a Backup Insurer Default,
be made by the Majority Noteholders.

                                   ARTICLE II

           CONVEYANCE OF SELLER PROPERTY; FURTHER ENCUMBRANCE THEREOF

            SECTION 2.01. Sale of the Initial Seller Property to the Trust.

            (a) In consideration of the Trust's delivery to, or upon the order
of, the Seller on the Closing Date of the net proceeds from the sale of the
Class A Notes and the other amounts to be distributed from time to time to the
Seller in accordance with the terms of this Agreement, the Seller does hereby
convey, assign, sell and transfer without recourse, except as set forth herein,
to the Trust all of its right, title and interest in and to: (i) the Dealer
Loans listed on Schedule A hereto delivered to the Servicer, the Class A
Insurer, the Backup Insurer, the Backup Servicer and the Trust Collateral Agent
on the Closing Date; (ii) all rights under the Dealer Agreements related thereto
(other than the Excluded Dealer Agreement Rights), including Credit Acceptance's
right to service the Dealer Loans and the related Contracts and receive the
related servicing fee and receive reimbursement of certain recovery and
repossession expenses, in accordance with the terms of the Dealer Agreements;
(iii) Collections (other than Dealer Collections) after the applicable Cut-off
Date; (iv) a security interest in each Contract securing each Dealer Loan; (v)
all records and documents relating to the Dealer Loans and the Contracts; (vi)
all security interests purporting to secure payment of the Dealer Loans; (vii)
all security interests purporting to secure payment of each Contract (including
a security interest in each Financed Vehicle); (viii) all guarantees, insurance
(including insurance insuring the priority or perfection of any Contract) or
other agreements or arrangements securing the Contracts; (ix) the Seller's
rights under the Contribution Agreement; and (x) all Proceeds of the foregoing
(the "Initial Seller Property").

                                       24
<PAGE>

            (b) Such sale shall be effective as of the Closing Date with respect
to the Initial Seller Property.

            (c) In consideration of the sale of the Initial Seller Property, the
Trust shall (i) pay or cause to be paid to the Seller on the Closing Date a
purchase price equal to the Aggregate Outstanding Net Eligible Loan Balance of
the Dealer Loans transferred to the Trust on the Closing Date, in the form of
cash (to the extent of the net proceeds from the sale of the Class A Notes) and
capital contribution and (ii) deliver the Certificates to the Seller. The Seller
directs that the Initial Reserve Amount be deposited in the Reserve Account from
such purchase price.

            (d) For the avoidance of doubt, the term "Initial Seller Property"
with respect to any Dealer Loan includes all rights arising after the Closing
Date under such Dealer Loans which rights are attributable to advances made
under such Dealer Loans as the result of Contracts being added after the Closing
Date to the identifiable group of Contracts to which such Dealer Loan relates.

            SECTION 2.02. Revolving Period; Principal Collection Account.

            (a) On each Distribution Date during the Revolving Period, the
Issuer shall receive Available Funds after the payment of all amounts due and
payable in Section 5.08(a)(i) through (v) and shall be required to use those
amounts and any amounts on deposit in the Principal Collection Account to
purchase additional Dealer Loans and all collateral related thereto from the
Seller until the Collateral Amount equals the Minimum Collateral Amount. If on
any Distribution Date during the Revolving Period there are not sufficient
Eligible Dealer Loans for purchase by the Issuer to cause the Collateral Amount
to equal the Minimum Collateral Amount, an amount necessary to cause the
Adjusted Collateral Amount to equal the Minimum Collateral Amount will remain on
deposit in the Principal Collection Account. Subject to the foregoing, and in
consideration of the payment of the Subsequent Seller Property Purchase Price,
the Seller agrees to convey, assign, sell and transfer without recourse, except
as set forth in this Agreement, to the Trust all of its right, title and
interest in and to: (i) the Dealer Loans listed on the schedule delivered to the
Class A Insurer, the Backup Insurer, the Servicer and the Trust Collateral Agent
on each Distribution Date during the Revolving Period; (ii) rights under the
Dealer Agreements related thereto (other than the Excluded Dealer Agreement
Rights), including Credit Acceptance's right to service the Dealer Loans and the
related Contracts and receive the related servicing fee and receive
reimbursement of certain recovery and repossession expenses, in accordance with
the terms of the Dealer Agreements; (iii) Collections (other than Dealer
Collections) after the applicable Cut-off Date; (iv) a security interest in each
Contract securing each Dealer Loan; (v) all records and documents relating to
the Dealer Loans and the Contracts; (vi) all security interests purporting to
secure payment of the Dealer Loans; (vii) all security interests purporting to
secure payment of each Contract (including a security interest in each Financed
Vehicle); (viii) all guarantees, insurance (including insurance insuring the
priority or perfection of any Contract) or other agreements or arrangements
securing the Contracts; (ix) the Seller's rights under the Contribution
Agreement; and (x) all Proceeds of the foregoing (the "Subsequent Seller
Property").

      On each Distribution Date during the Revolving Period on which the Issuer
purchases Subsequent Seller Property, the Issuer shall deliver to the Servicer,
the Backup Servicer, the

                                       25
<PAGE>

Trust Collateral Agent, the Class A Insurer and the Backup Insurer a supplement
to Schedule A hereto listing the additional Dealer Loans purchased on such
Distribution Date, and the Dealer Agreements and Contracts related thereto.

      For the avoidance of doubt, the term "Subsequent Seller Property" with
respect to any Dealer Loan includes all rights arising after the end of the
Revolving Period under such Dealer Loans which rights are attributable to
advances made under such Dealer Loans as the result of Contracts being added
after the last day of the last full Collection Period during the Revolving
Period to the identifiable group of Contracts to which such Dealer Loan relates.

            (b) The occurrence of any one of the following events shall
constitute an "Automatic Amortization Event":

                  (i) there is a draw on the Reserve Account;

                  (ii) a Servicer Default occurs;

                  (iii) an Indenture Event of Default occurs;

                  (iv) on any Distribution Date, after giving effect to all
      purchases of Dealer Loans on such date, the Adjusted Collateral Amount is
      less than the Minimum Collateral Amount, and such deficiency continues for
      two (2) or more Business Days;

                  (v) cumulative Collections through the end of the related
      Collection Period, expressed as a percentage of the cumulative Forecasted
      Collections through the end of the related Collection Period, is less than
      90.0% for any two (2) consecutive Collection Periods;

                  (vi) on any Distribution Date, after giving effect to the
      purchase of additional Dealer Loans on such date, the amount on deposit in
      the Principal Collection Account is greater than 5.0% of the Adjusted
      Collateral Amount, and such excess continues for two (2) or more Business
      Days; or

                  (vii) on any Distribution Date, the Weighted Average Original
      Advance Rate exceeds 49.0%.

            (c) The occurrence of any one of the following events shall
constitute a "Discretionary Amortization Event" only if after any applicable
grace or cure period either the Controlling Party, or if both a Class A Insurer
Default and a Backup Insurer Default have occurred and are continuing, the
Indenture Trustee, at the direction of the Majority Noteholders, upon written
notice to the Issuer, the Servicer, the Backup Servicer and the Trust Collateral
Agent, declares that an Early Amortization Event has occurred:

                  (i) the Issuer fails to make a payment or deposit when
      required under this Agreement or within any applicable grace or cure
      period;

                  (ii) the Issuer fails to observe or perform in any material
      respect any of its covenants or agreements set forth in this Agreement and
      that failure continues

                                       26
<PAGE>

      unremedied for 30 days after written notice of such failure to the Issuer
      by either Insurer, or if both a Class A Insurer Default and a Backup
      Insurer Default have occurred and are continuing, the Indenture Trustee,
      at the direction of Majority Noteholders;

                  (iii) any representation or warranty made by the Issuer in
      this Agreement or in any certificate or document that the Issuer is
      required to deliver to the Indenture Trustee is incorrect in any material
      respect for 30 days after written notice of that breach to the Issuer by
      either Insurer, or if both a Class A Insurer Default and a Backup Insurer
      Default have occurred and are continuing, the Indenture Trustee, at the
      direction of the Majority Noteholders;

                  (iv) the Indenture Trustee does not have a valid and perfected
      first priority security interest in the Trust Property, or the Issuer or
      Credit Acceptance or an affiliate of Credit Acceptance makes that
      assertion;

                  (v) there is filed against Credit Acceptance, the Seller or
      the Issuer: (a) a notice of federal tax lien from the IRS, (b) a notice of
      lien from the Pension Benefit Guaranty Corporation under Section 412(n) of
      the tax code or Section 302(f) of ERISA for a failure to make a required
      installment or other payment to a pension plan to which either of those
      sections applies or (c) a notice of any other lien that, in the case of
      each of (a), (b) and (c), could reasonably be expected to have a material
      adverse effect on the business, operations or financial condition of the
      Issuer or the business, operations or financial condition of Credit
      Acceptance and the Seller;

                  (vi) one or more judgments or decrees are entered against the
      Seller or Credit Acceptance involving in the aggregate liability, not paid
      or fully covered by insurance, of $100,000 in the case of the Seller, and
      $5,000,000 in the case of Credit Acceptance, or more and those judgments
      or decrees have not been vacated, discharged or stayed within 30 days from
      their entry; or

                  (vii) any of the Basic Documents ceases for any reason to be
      in full force and effect other than in accordance with its terms.

            (d) If a Responsible Officer of the Indenture Trustee shall have
actual knowledge, or the Indenture Trustee shall receive written notice from an
Insurer, or, if both a Class A Insurer Default and Backup Insurer Default have
occurred and are continuing, the Majority Noteholders, that an Early
Amortization Event has occurred, the Indenture Trustee shall promptly issue
written notice of such Early Amortization Event to the Servicer, the Class A
Insurer, the Backup Insurer, the Backup Servicer, the Rating Agencies, the Trust
Collateral Agent and each of the Class A Noteholders, which notice shall advise
them of the nature of the Early Amortization Event, to the extent actually known
by the Indenture Trustee, and the date of the occurrence thereof.

            (e) On the first Distribution Date during the Amortization Period,
any amounts remaining on deposit in the Principal Collection Account shall be
deposited into the Collection Account and treated as Available Funds.

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<PAGE>

            SECTION 2.03. Title to Trust Property.

            (a) Immediately upon the conveyance to the Trust by the Seller of
any item of property pursuant to Section 2.01 or 2.02, all right, title and
interest of the Seller in and to such item of property shall terminate, and all
such right, title and interest shall vest in the Trust, in accordance with the
Trust Agreement and Sections 3802 and 3805 of the Business Trust Statute (as
defined in the Trust Agreement).

            (b) Immediately upon the vesting of the Trust Property in the Trust,
the Trust shall have the sole right to pledge or otherwise encumber, such Trust
Property but only in accordance with the terms of the Basic Documents. Pursuant
to the Indenture, the Trust shall grant a security interest in the Trust
Property to the Indenture Trustee for the benefit of the Class A Insurer, the
Backup Insurer and the Class A Noteholders to secure the repayment of the Class
A Notes and amounts owed to the Class A Insurer and the Backup Insurer.

            (c) It is the intention of the Seller that (i) the transfer and
assignment contemplated by this Agreement shall constitute a sale of the Seller
Property from the Seller to the Trust and (ii) the beneficial interest in and
title to the Seller Property shall not be part of the Seller's estate in the
event of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law.

            (d) Notwithstanding the foregoing, in the event that the Seller
Property is held to be property of the Seller, or if for any reason this
Agreement is held or deemed to create indebtedness or a security interest in the
Seller Property, then it is intended that:

                  (i) This Agreement shall be deemed to be a security agreement
      within the meaning of Articles 8 and 9 of the UCC;

                  (ii) The conveyances provided for in Section 2.01 and Section
      2.02 shall be deemed to be a grant by the Seller, and the Seller hereby
      grants, to the Trust a security interest in all of its right (including
      the power to convey title thereto), title and interest, whether now owned
      or hereafter acquired, in and to the Seller Property, to secure such
      indebtedness and the performance of the obligations of the Seller
      hereunder;

                  (iii) The possession by the Trust, or the Servicer as the
      Trust's agent, of the Dealer Agreements, Dealer Loans and Contract Files
      and any other property which constitute instruments, money, negotiable
      documents or chattel paper shall be deemed to be "possession by the
      secured party" or possession by the purchaser or a person designated by
      such purchaser, for purposes of perfecting the security interest pursuant
      to the UCC; and

                  (iv) Notifications to persons holding such property, and
      acknowledgments, receipts or confirmations from persons holding such
      property, shall be deemed to be notifications to, or acknowledgments,
      receipts or confirmations from, bailees or agents (as applicable) of the
      Trust for the purpose of perfecting such security interest under the UCC.

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<PAGE>

            (e) At such time as there are no Class A Notes outstanding and all
sums due to (i) the Indenture Trustee pursuant to Section 6.7 of the Indenture,
(ii) the Trust Collateral Agent pursuant to Section 9.05 hereof, (iii) the
Backup Servicer hereunder and under the Backup Servicing Agreement and (iv) the
Class A Insurer in respect of the Class A Insurer Reimbursement Obligations and
the Backup Insurer in respect of the Backup Insurer Reimbursement Obligations,
in each case, have been paid, the Trust Collateral Agent shall, upon
instructions from the Indenture Trustee pursuant to Section 8.2 of the
Indenture, release any remaining portion of the Trust Property from the lien of
the Indenture for distribution in accordance with the Trust Agreement.

                                   ARTICLE III

                       THE DEALER LOANS AND THE CONTRACTS

            SECTION 3.01. Representations and Warranties of Seller with respect
to the Seller Property.

The Seller makes the following representations and warranties as to the Dealer
Agreements, Dealer Loans and the Contracts on which each of the Trust Collateral
Agent and the Backup Servicer relies in connection with performance of its
obligations hereunder, the Class A Insurer relies in issuing the Class A Note
Insurance Policy and the Backup Insurer relies in issuing the Backup Insurance
Policy. Such representations and warranties speak as of the execution and
delivery of this Agreement on the Closing Date and each Distribution Date on
which the Trust purchases Seller Property, as the case may be, and only with
respect to the Seller Property conveyed to the Trust at the time given or made
(unless otherwise specified) but shall survive the sale, transfer, and
assignment of the Seller Property to the Trust and the pledge thereof to the
Indenture Trustee pursuant to the Indenture:

                  (i) Eligibility of Dealer Agreements. Each Dealer Agreement
      classified as an "Eligible Dealer Agreement" (or included in any
      aggregation of balances of "Eligible Dealer Agreements") by the Seller or
      the Servicer in any document or report delivered hereunder satisfied the
      requirements contained in the definition of Eligible Dealer Agreement on
      the date so delivered.

                  (ii) Eligibility of Dealer Loans. Each Dealer Loan classified
      as an "Eligible Loan" (or included in any aggregation of balances of
      "Eligible Loans") by the Seller or the Servicer in any document or report
      delivered hereunder satisfied the requirements contained in the definition
      of Eligible Loan on the date so delivered.

                  (iii) Eligibility of Contracts. Each Contract classified as an
      "Eligible Contract" (or included in any aggregation of balances of
      "Eligible Contracts") by the Seller or the Servicer in any document or
      report delivered hereunder satisfied the requirements contained in the
      definition of Eligible Contract on the date so delivered.

                  (iv) Accuracy of Information. All information with respect to
      the Dealer Loans and other Seller Property provided to the Trust
      Collateral Agent, the Class A Insurer or the Backup Insurer by the Seller
      or the Servicer was true and correct in all

                                       29
<PAGE>

      material respects as of the date such information was provided to the
      Trust Collateral Agent, the Class A Insurer or the Backup Insurer, as
      applicable.

                  (v) No Liens. Each Dealer Loan and the other Seller Property
      has been pledged to the Trust Collateral Agent free and clear of any Lien
      of any Person, and in compliance, in all material respects, with all
      Applicable Laws.

                  (vi) No Consents. With respect to each Dealer Loan and the
      other Seller Property, all consents, licenses, approvals or authorizations
      of or registrations or declarations with any Governmental Authority
      required to be obtained, effected or given by the Seller, in connection
      with the pledge of such Dealer Agreement, Dealer Loan, Contract or other
      Collateral to the Trust Collateral Agent have been duly obtained, effected
      or given and are in full force and effect;

                  (vii) Schedule A. Schedule A to this Agreement and each
      supplement or addendum thereto is and will be an accurate and complete
      listing of all Dealer Loans, the related Dealer Agreements and Contracts
      in all material respects on the date each such Dealer Loan and other
      Seller Property was transferred to the Trust hereunder, and the
      information contained therein is and will be true and correct in all
      material respects as of such date.

                  (viii) Adverse Selection. No selection procedure believed by
      the Seller to be adverse to the interests of the Class A Noteholders, the
      Class A Insurer or the Backup Insurer has been or will be used in
      selecting the Dealer Agreements, Dealer Loans or Contracts.

                  (ix) Contribution Agreement. The Contribution Agreement is the
      only agreement pursuant to which the Seller purchases Dealer Loans from
      the Originator.

                  (x) Security Interest. The Seller has granted a security
      interest (as defined in the UCC) to the Trust Collateral Agent, as agent
      for the Class A Noteholders, in the Seller Property, which is enforceable
      in accordance with Applicable Law upon the Closing Date. Upon the filing
      of UCC-1 financing statements naming the Trust Collateral Agent as secured
      party and the Seller as debtor, or upon the Trust Collateral Agent
      obtaining possession or control, in the case of that portion of the Seller
      Property which constitutes chattel paper or instruments, the Trust
      Collateral Agent, as agent for the Secured Parties, shall have a first
      priority perfected security interest in the Seller Property. All filings
      (including, without limitation, such UCC filings) as are necessary in any
      jurisdiction to perfect the interest of the Trust Collateral Agent, as
      agent for the Trust, in the Seller Property have been made.

                  (xi) Representations and Warranties in Contribution Agreement.
      The representations and warranties made by the Originator to the Seller in
      the Contribution Agreement are hereby remade by the Seller on each date to
      which they speak in the Contribution Agreement as if such representations
      and warranties were set forth herein. For purposes of this Section
      3.01(xi), such representations and warranties are

                                       30
<PAGE>

      incorporated herein by reference as if made by the Seller to the Trust
      Collateral Agent, the Class A Insurer and the Backup Insurer under the
      terms hereof mutatis mutandis.

                  (xii) Survival. The representations and warranties set forth
      in this Section 3.01 shall survive the Seller's transfer and assignment of
      the Seller Property to the Trust and the termination of the rights and
      obligations of the Servicer.

                  (xiii) Perfection Representations. The perfection
      representations, warranties and covenants made by the Seller and set forth
      on Schedule C hereto shall be a part of this Agreement for all purposes.

                  (xiv) Final Score. With respect to the purchase by the Issuer
      of Dealer Loans and related Seller Property on each Distribution Date
      during the Revolving Period, on each such Distribution Date, immediately
      after giving effect thereto, the weighted average of the Final Scores of
      all Contracts transferred on such Distribution Date is 700 or greater.

            SECTION 3.02. Payment Upon Breach.

            (a) The Seller, the Servicer, or the Trust Collateral Agent, as the
case may be, shall inform the other parties to this Agreement, the Class A
Insurer and the Backup Insurer promptly, in writing, upon the discovery (which,
in the case of the Trust Collateral Agent shall mean actual knowledge of a
Responsible Officer of the Trust Collateral Agent or receipt of written notice
of such breach or failure): (i) of any breach of the Seller's representations
and warranties pursuant to Section 3.01 hereof without regard to any limitation
set forth therein concerning the knowledge of the Seller as to the facts stated
therein; or (ii) with respect to each date by which a review is required to be
performed pursuant to Section 3.03(d) hereof, that the aggregate number of
Incomplete Contracts exceeds the number of Permitted Incomplete Contracts for
such date.

            (b) Unless any such breach of a representation or warranty described
in clause (a)(i) of this Section 3.02 shall have been cured by, or the number of
Incomplete Contracts with respect to any review period described in clause
(a)(ii) of this Section 3.02 continues to exceed the number of Permitted
Incomplete Contracts as of last day of the first full Collection Period
following the discovery thereof: (i) the Seller shall have the obligation, and
the Trust Collateral Agent shall, at the expense of the Seller, enforce such
obligation of the Seller, and if necessary, the obligation of the Originator
under the Contribution Agreement, to make a payment of the applicable Purchase
Amount in respect of: (A) all Dealer Loans and Contracts with respect to which
there is a breach of any such representations and warranties, and (B) the
aggregate number of Incomplete Contracts which exceeds the number of Permitted
Incomplete Contracts, which, in the case of each of (A) and (B), are materially
and adversely affected by such event or which materially and adversely affects
the interests of the Indenture Trustee or either Insurer as of such last day;
and (ii) the Controlling Party shall have the right to demand the Seller, and if
necessary, the Originator under the Contribution Agreement, and upon such demand
the Seller and, if applicable, the Originator, shall have the obligation, to
make a payment of the applicable Purchase Amount in respect of any Permitted
Incomplete Contract which materially and

                                       31
<PAGE>

adversely affects such Contract or which materially and adversely affects the
interest of the Indenture Trustee or either Insurer as of such last day.

            (c) The sole remedy of the Trust Collateral Agent, the Trust, the
Class A Noteholders and the Certificateholders with respect to a breach of the
Seller's representations and warranties pursuant to Section 3.01 hereof which
materially and adversely affects the interests of the Indenture Trustee or
either Insurer shall be to require the Seller to make payments in respect of the
related Dealer Loans pursuant to this Section or to enforce the obligation of
Credit Acceptance to repurchase such Dealer Loans pursuant to the Contribution
Agreement, and to require the Seller to make payments in respect of the related
Contracts pursuant to this Section or to enforce the obligation of Credit
Acceptance to make such payments pursuant to the Contribution Agreement. The
Trust Collateral Agent shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the purchase of
any Dealer Loan or payment in respect of any Contract pursuant to this Section.
Any expenses incurred by the Trust Collateral Agent in enforcing the obligations
of the Seller or Credit Acceptance shall be paid pursuant to Section 5.08(a)
hereof.

            (d) (i) Notwithstanding anything herein to the contrary, (A) during
      the Revolving Period such payments of Purchase Amounts pursuant to Section
      3.02(b) of this Agreement shall not be required if the Adjusted Collateral
      Amount is equal to or greater than the Minimum Collateral Amount, and (B)
      during the Amortization Period, such payments of Purchase Amounts pursuant
      to Section 3.02(b) of this Agreement shall not be required: (x) with
      respect to any Dealer Loan, so long as the aggregate Net Loan Balance of
      all Dealer Loans which would be Ineligible Loans as a result of being
      subject to the foregoing payment obligations during the Amortization
      Period is less than the sum of: (1) the product of (i) the aggregate Net
      Loan Balance of all Eligible Loans transferred to the Issuer during the
      Amortization Period and (ii) the then effective Advance Rate; and (2) all
      Purchase Amounts which have been previously paid during the Amortization
      Period in respect of Ineligible Loans (such sum, the "Amortization Period
      Additional Loan Collateral Amount"); and (y) with respect to any Contract,
      so long as the aggregate Outstanding Balance of all Contracts which would
      be Ineligible Contracts as a result of being subject to the foregoing
      payment obligations during the Amortization Period is less than the sum
      of: (1) the product of (i) the aggregate Outstanding Balance of all
      Eligible Contracts an interest in which is transferred to the Issuer
      during the Amortization Period and (ii) a fraction, the numerator of which
      is equal to the Class A Note Balance and the denominator of which is equal
      to the Outstanding Balance of all Eligible Contracts; and (2) all Purchase
      Amounts which have been previously paid during the Amortization Period in
      respect of Ineligible Contracts (such sum, the "Amortization Period
      Additional Contract Collateral Amount").

            (ii) If such payments are required in accordance with clause (d)(i)
      of this Section 3.02, they shall be made: (A) with respect to Ineligible
      Loans, to the extent and in the amount by which the aggregate Net Loan
      Balance of all Ineligible Loans which are subject to the foregoing payment
      obligations during the Amortization Period exceeds the Amortization Period
      Additional Loan Collateral Amount; and (B) with respect to Ineligible
      Contracts, to the extent and in the amount by which the aggregate
      Outstanding Balance of all Ineligible Contracts which are subject to the
      foregoing payment obligations

                                       32
<PAGE>

      during the Amortization Period exceeds the Amortization Period Additional
      Contract Collateral Amount (the foregoing payment obligations, the
      "Amortization Period Payment Obligations").

            (iii) Notwithstanding the foregoing, the Seller's obligation to make
      payments under Section 3.02 hereof may be waived with the prior written
      consent of the Controlling Party or the Indenture Trustee, at the
      direction of the Majority Noteholders, if both a Class A Insurer Default
      and a Backup Insurer Default have occurred and are continuing. Any such
      waiver by the Controlling Party or the Indenture Trustee, at the direction
      of the Majority Noteholders, as applicable, shall not require any further
      waiver, action or consent by any other party. The party providing such
      waiver shall give notice thereof to the Owner Trustee.

            (e) Any Contract which is subject to a payment in accordance with
Section 3.02(b), Section 3.03(d) or Section 4.07 of this Agreement shall be an
Ineligible Contract. Any Dealer Loan which is subject to a payment in accordance
with Section 3.02(b), Section 3.03(d) or Section 4.07 of this Agreement shall be
an Ineligible Loan.

            SECTION 3.03. Custody of Dealer Agreements and Contract Files.

            (a) The Trust hereby revocably appoints Credit Acceptance as
custodian of the Dealer Agreements, the Contract Files and the Certificates of
Title related to the Financed Vehicles. Credit Acceptance hereby accepts such
appointment and agrees to hold, or appoint an agent acceptable to the
Controlling Party to hold, each Dealer Agreement, Contract File and, in states
where it is required by applicable law, the original Certificate of Title
related to each Financed Vehicle under this Agreement as custodian for the Trust
and the Trust Collateral Agent.

            (b) (i) On or prior to the Closing Date and each Distribution Date
      during the Revolving Period, the Servicer shall provide an Acknowledgment
      substantially in the form of Exhibit E hereto dated as of the Closing Date
      or such Distribution Date, as applicable, to the Owner Trustee, the Trust
      Collateral Agent, the Class A Insurer and the Backup Insurer confirming
      that the Servicer has received and is in possession of the original of
      each Dealer Agreement listed on Schedule A hereto (or such amendment or
      supplement to Schedule A relating to each Distribution Date, as
      applicable).

                  (ii) If, on the 120th day after each Distribution Date during
      the Revolving Period, the Servicer has not verified the presence of the
      original Contract related to the Contracts listed on Schedule A hereto (or
      such amendment or supplement to Schedule A relating to each Distribution
      Date during the Revolving Period, as applicable) with respect to at least
      98.0% of the number of Contract Files required to be reviewed by each such
      120th day in accordance with Section 3.03(d) hereof, the Servicer shall
      provide notice to the Owner Trustee, the Trust Collateral Agent, the Class
      A Insurer and the Backup Insurer dated as of such date indicating the
      number of Incomplete Contracts as of such date.

                                       33
<PAGE>

                  (iii) On or prior to the 120th day after the Closing Date, the
      180th day after the Closing Date and the 180th day after each Distribution
      Date during the Revolving Period, the Servicer shall provide an
      Acknowledgment substantially in the form of Exhibit E hereto, dated as of
      such date, to the Owner Trustee, the Trust Collateral Agent, the Class A
      Insurer and the Backup Insurer confirming that the Servicer has verified
      the presence of the original contract related to at least 98.0% of the
      Contract Files required to be reviewed by such date in accordance with
      Section 3.03(d) hereof.

            (c) To assure uniform quality in servicing the Dealer Loans and
Contracts and to reduce administrative costs, the Issuer hereby revocably
appoints the Servicer and the Servicer hereby accepts such appointment, to act
as the agent of the Issuer and the Trust Collateral Agent as custodian of the
original Certificates of Title for each Financed Vehicle evidencing the security
interest of the Trust Collateral Agent in the Financed Vehicle which are hereby
constructively delivered to the Trust Collateral Agent as of the Closing Date.
The Servicer agrees to maintain the Dealer Agreements, Contract Files,
Certificates of Title and Records which are delivered to it at the offices of
the Servicer as shall from time to time be identified to the Trust Collateral
Agent, the Backup Servicer, the Class A Insurer and the Backup Insurer by
written notice. The Servicer shall maintain, or shall appoint an agent
acceptable to the Controlling Party to maintain, such Certificates of Title at
its principal place of business located at Silver Triangle Building, 25505 West
Twelve Mile Road, Southfield, Michigan 48034-8339 or as otherwise notified in
writing to the Trust Collateral Agent, the Backup Servicer, the Class A Insurer
and the Backup Insurer.

            (d) The Servicer shall within: (i) 120 days after the Closing Date
and 120 days after each Distribution Date during the Revolving Period, review at
least 75.0% of the Contract Files related to the Dealer Loans transferred to the
Trust on the Closing Date or such Distribution Date, as applicable, to verify
the presence of the original of the Contract; and (ii) 180 days after the
Closing Date and 180 days after each Distribution Date during the Revolving
Period, review the remainder of the Contract Files related to the Dealer Loans
transferred to the Trust on the Closing Date or such Distribution Date, as
applicable, to verify the presence of the original of the Contract therein;
provided, however, that in the case of each of (i) and (ii) above, the
Certificate of Title with respect to each Contract need not be verified. If the
number of Incomplete Contracts (or the number of originals of Contracts that
have not otherwise been delivered to the Servicer) exceeds the number of
Permitted Incomplete Contracts as of any such 120th or 180th day, as applicable,
the Seller shall make a payment only with respect to the excess number of
Incomplete Contracts, in an amount equal to the related Purchase Amount, in
accordance with the provisions of Section 3.02(b) hereof. Notwithstanding the
foregoing sentence, but subject to the other limitations set forth herein, the
Controlling Party may, in its sole discretion, require the Seller to remit the
applicable Purchase Amount with respect to any Permitted Incomplete Contracts.

            (e) Subject to the foregoing, Credit Acceptance may temporarily move
individual Dealer Agreements, Contract Files or Records, or any portion thereof
without notice as necessary to allow the Servicer to conduct collection and
other servicing activities in accordance with its customary practices and
procedures.

            (f) The Servicer shall have and perform the following powers and
duties:

                                       34
<PAGE>

                  (i) hold the Dealer Agreements, Contract Files and Records in
      trust for the benefit of the Trust Collateral Agent and the Trust and
      maintain a current inventory thereof; and

                  (ii) carry out such policies and procedures in accordance with
      its customary actions with respect to the handling and custody of the
      Dealer Agreements, Contract Files and Records so that the integrity and
      physical possession of the Dealer Agreements, Contract Files and Records
      will be maintained.

In performing its duties as custodian, the Servicer agrees to act with
reasonable care, using that degree of skill and care that it exercises with
respect to similar Dealer Agreements, Contracts or Dealer Loans owned or held by
it.

            (g) The Servicer shall have the obligation (i) to physically
segregate the Contract Files from the other custodial files it is holding for
its own account or on behalf of any other Person and (ii) to physically mark the
Contract folders to demonstrate the transfer of Contract Files and the Trust
Collateral Agent's security interest hereunder.

            (h) (i) If a Servicer Default occurs, the Trust Collateral Agent
      shall have the rights set forth in Section 8.01 hereof, including, at the
      request of the Controlling Party, the right to terminate Credit Acceptance
      as the custodian hereunder and the Trust Collateral Agent shall have the
      right to appoint a successor custodian hereunder who shall assume all the
      rights and obligations of the "custodian" hereunder. On the effective date
      of the termination of Credit Acceptance as Servicer, Credit Acceptance
      shall be released of all of its obligations as custodian arising on or
      after such date. The Dealer Agreements, Contract Files and Records shall
      be delivered by Credit Acceptance to the successor custodian, on or before
      the date which is two (2) Business Days prior to such date.

                  (ii) During the continuance of a Servicer Default, the
      Servicer and the Seller shall, at the request of the Controlling Party or
      the Trust Collateral Agent, if both a Class A Insurer Default and a Backup
      Insurer Default have occurred and are continuing, each in its sole
      discretion, take all steps necessary to cause the Certificate of Title of
      each Financed Vehicle to be revised to name the Trust Collateral Agent on
      behalf of the Trust as lienholder. Any costs associated with such revision
      of the Certificate of Title shall be paid by the Servicer and, and to the
      extent such costs are not paid by the Servicer such unpaid costs shall be
      recovered as described in Section 5.08 hereof. In no event shall the Trust
      Collateral Agent or the successor Servicer be required to expend funds in
      connection with this Section 3.03(h). If the Backup Servicer has become
      the successor Servicer, it shall be reimbursed for all Reliening Expenses
      (in accordance with the provisions of Section 5.08(a) hereof) for any
      retitling effort associated with the Financed Vehicles set forth in this
      Agreement.

                  (iii) The Servicer shall provide to the Trust Collateral Agent
      access to the Dealer Agreements, Contract Files and Records and all other
      documentation regarding the Dealer Agreements, Contracts and the Dealer
      Loans and the related Financed Vehicles in such cases where the Trust
      Collateral Agent is required in

                                       35
<PAGE>

      connection with the enforcement of the rights or interests of the Trust,
      or by applicable statutes or regulations to review such documentation,
      such access being afforded without charge.

                                   ARTICLE IV

           ADMINISTRATION AND SERVICING OF DEALER LOANS AND CONTRACTS

            SECTION 4.01. Appointment; Duties of Servicer.

            (a) Servicing; Termination. The Seller, the Trust, the Trust
Collateral Agent, the Class A Insurer and the Backup Insurer hereby appoint
Credit Acceptance as servicer hereunder and Credit Acceptance hereby accepts
such appointment and agrees to manage, collect and administer each of the Dealer
Loans as Servicer. Credit Acceptance shall be retained as Servicer for an
initial twelve (12) month term commencing on the Closing Date. Upon the
expiration of such twelve (12) month term, the Controlling Party, upon written
notice to the Indenture Trustee, the Trust Collateral Agent, the Servicer, the
Rating Agencies, the Insurer not then the Controlling Party and the Backup
Servicer, may, at its option, renew the term of Credit Acceptance as Servicer
for a subsequent term of three (3) months. Upon the expiration of any three
month term, the Controlling Party, upon written notice to the Indenture Trustee,
the Trust Collateral Agent, the Servicer, the Rating Agencies, the Insurer not
then the Controlling Party and the Backup Servicer, may at its option, renew the
term of Credit Acceptance as Servicer for an additional three (3) month term. If
the Controlling Party does not renew any such servicing term in writing, the
servicing term of Credit Acceptance shall automatically expire. If both a Class
A Insurer Default and a Backup Insurer Default have occurred and are continuing,
and the twelve (12) month or any three (3) month servicing term, as the case may
be, has expired, Credit Acceptance shall continue as Servicer unless and until
it is terminated after the occurrence of a Servicer Default. Upon the occurrence
of a Servicer Default, the Controlling Party shall have the rights set forth in
Section 8.01 hereof. Notwithstanding anything herein to the contrary, the
provisions of this Section 4.01(a) shall not apply to the Backup Servicer after
it has become the successor Servicer.

            (b) Standard of Care; Types of Duties. The Servicer shall manage,
service, administer, and make collections on the Dealer Loans and the Contracts
with reasonable care, using that degree of skill and attention that the
servicers in the retail automobile financing industry exercise with respect to
all comparable receivables that they service for themselves or others and the
same degree of care that the Servicer exercises with respect to any comparable
dealer loan or automobile contracts that it holds for its own account. The
Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Dealers and of Obligors on such Contracts,
investigating delinquencies, sending payment statements or coupons to Dealers
and Obligors, reporting tax information to Dealers and Obligors, accounting for
collections, and furnishing monthly and annual statements to the Trust
Collateral Agent with respect to distributions. The Servicer shall follow
prudent standards, policies, and procedures in performing its duties as
Servicer. Without limiting the generality of the foregoing, the Servicer is
hereby granted a limited power of attorney by the Trust Collateral Agent to
execute and deliver, on behalf of itself, the Trust, the Class A Noteholders, or
the Trust Collateral Agent or any of them, any and all instruments of
satisfaction or cancellation, or partial or full release or

                                       36
<PAGE>

discharge, and all other comparable instruments, with respect to such Dealer
Loans and Contracts or to the Financed Vehicles securing such Contracts in
accordance with the terms of this Agreement. If the Servicer shall commence a
legal proceeding to enforce a Dealer Loan or a Contract, the Trust Collateral
Agent (in the case of a Dealer Loan other than a Purchased Loan) shall thereupon
be deemed to have automatically assigned, solely for the purpose of collection,
such Dealer Loan or Contract to the Servicer. The Servicer shall not make the
Seller, the Trust, the Trust Collateral Agent, the Indenture Trustee, the Class
A Insurer or the Backup Insurer a party to any such legal proceeding without
such party's written consent. If in any enforcement suit or legal proceeding it
shall be held that the Servicer may not enforce a Dealer Loan or a Contract on
the ground that it shall not be a real party in interest or a holder entitled to
enforce the Dealer Loan or Contract, the Trust Collateral Agent shall be deemed
to have automatically assigned such Dealer Loan or Contract to the Servicer,
solely for the purpose of collection. The Trust Collateral Agent shall furnish
the Servicer with any powers of attorney and other documents prepared by the
Servicer reasonably necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder. The Servicer, at its expense,
shall obtain on behalf of the Trust all licenses, if any, required by the laws
of any jurisdiction to be held by the Trust in connection with ownership of the
Dealer Loans and its security interest in the Contracts which secure the Dealer
Loans, and shall make all filings and pay all fees as may be required in
connection therewith during the term hereof. The Seller shall assist the Backup
Servicer, as successor Servicer, in connection with any reports related to
distributions.

            (c) Duties with Respect to the Basic Documents. Credit Acceptance
shall perform all its duties and, unless otherwise specified, the administrative
duties of the Issuer under the Basic Documents. In addition, Credit Acceptance
shall consult with the Indenture Trustee and, so long as both a Class A Insurer
Default and a Backup Insurer Default are not continuing, the Controlling Party,
as Credit Acceptance deems appropriate regarding the duties of the Issuer under
the Basic Documents. Credit Acceptance shall monitor the performance of the
Trust and shall advise the Owner Trustee and Indenture Trustee, so long as both
a Class A Insurer Default and a Backup Insurer Default are not continuing, and
the Controlling Party, when action is necessary to comply with the Trust's
duties under the Basic Documents. The Seller shall execute and deliver all
Issuer Orders and Officer's Certificates required by the Trust under the
Indenture. Notwithstanding anything herein to the contrary, the Backup Servicer,
as successor Servicer, shall not have an obligation to perform such duties set
forth in this Section 4.01(c).

            (d) Duties with Respect to the Trust.

                  (i) In addition to the duties of the Servicer set forth in
      this Agreement or any of the Basic Documents, the Servicer shall perform
      such calculations, shall execute and deliver all Issuer Orders and
      Officer's Certificates required of the Issuer under the Basic Documents,
      and shall prepare for execution by the Trust or the Owner Trustee or shall
      cause the preparation by other appropriate Persons of all such documents,
      reports, filings, instruments, certificates and opinions as it shall be
      the duty of the Trust or the Owner Trustee to prepare, file or deliver
      pursuant to this Agreement or any of the Basic Documents or under state
      and federal tax and securities laws and shall take all appropriate action
      that it is the duty of the Trust to take pursuant to this Agreement or any

                                       37
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      of the Basic Documents, including, without limitation, pursuant to Section
      5.1 (with respect to the preparation and filing of tax returns) of the
      Trust Agreement.

                  (ii) In carrying out the foregoing duties or any of its other
      obligations under this Agreement, the Servicer may enter into transactions
      with or otherwise deal with any of its Affiliates; provided, however, that
      such delegation shall not relieve the Servicer of its obligations that the
      terms of any such transaction or dealings shall be in accordance with any
      directions received from the Trust and shall be, in the Servicer's
      opinion, no less favorable to the Trust in any material respect.

Notwithstanding anything herein to the contrary, in the event that the Backup
Servicer is acting as successor Servicer, the Seller shall assist the Backup
Servicer in performing the duties set forth in this Section 4.01(d).

            (e) Records. The Servicer shall maintain appropriate books of
account and records relating to its duties performed under Section 4.01(c) and
(d) hereof, which books of account and records shall be accessible for
inspection and copy by the Owner Trustee, the Indenture Trustee, the Class A
Insurer, the Backup Insurer or the Trust Collateral Agent at any time during
normal business hours at its offices and in a reasonable manner.

            (f) Additional Information to be Furnished to the Trust. The
Servicer shall furnish to the Owner Trustee, the Indenture Trustee, the Trust
Collateral Agent, the Class A Insurer and the Backup Insurer from time to time
such additional information regarding the Trust or the Basic Documents as the
Owner Trustee, the Indenture Trustee, the Trust Collateral Agent, the Class A
Insurer or the Backup Insurer shall reasonably request.

            (g) Servicer as Independent Contractor. All services, duties and
responsibilities of the Servicer under this Agreement shall be performed and
carried out by the Servicer as an independent contractor for the benefit of the
Trust, the Class A Insurer and the Backup Insurer, and none of the provisions of
this Agreement shall be deemed to make, authorize or appoint the Servicer as
agent or representative of the Seller, the Trust Collateral Agent, the Trust,
the Class A Insurer, the Backup Insurer or any Class A Noteholder except as
provided in Section 3.03 hereof.

            SECTION 4.02. Collection and Application of Payments on the Dealer
Loans and Contracts.

The Servicer shall take or cause to be taken all such action as may be necessary
or advisable to collect all amounts due under the Dealer Loans and Contracts
from time to time, all in accordance with Applicable Laws, with reasonable care
and diligence, and in accordance with the Collection Guidelines, it being
understood that there shall be no recourse to the Servicer with regard to the
Dealer Loans and Contracts except as otherwise provided herein and in the other
Basic Documents. In performing its duties as Servicer, the Servicer shall use
the same degree of care and attention it employs with respect to similar
contracts and loans which it services for itself or others. Each of the Issuer,
the Trust Collateral Agent, the Class A Insurer and the Backup Insurer hereby
appoints as its agent the Servicer, from time to time designated pursuant to the
terms hereof, to enforce its respective rights and interests in and under the
Trust Property.

                                       38

<PAGE>

The Servicer shall hold in trust for the Issuer, the Trust Collateral Agent and
the Class A Insurer and the Backup Insurer all Records and all Collections
(other than Dealer Collections) and any other amounts it receives in respect of
the Trust Property. In the event that a successor Servicer is appointed, the
outgoing Servicer shall deliver to the successor Servicer and the successor
Servicer shall hold in trust for the Issuer, the Trust Collateral Agent and the
Class A Insurer and the Backup Insurer all records which evidence or relate to
all or any part of the Trust Property.

            SECTION 4.03. Realization Upon Contracts.

On behalf of the Trust, the Indenture Trustee, the Class A Insurer and the
Backup Insurer, the Servicer shall use reasonable efforts, in accordance with
the Collection Guidelines and prudent servicing procedures, to repossess or
otherwise convert the ownership of the Financed Vehicle securing any Contract as
to which the Servicer shall have determined eventual payment in full is
unlikely, as soon as practicable after the Servicer makes such determination.
The Servicer shall follow such prudent practices and procedures as would be
deemed prudent in the servicing of comparable receivables, consistent with the
standard of care required by Section 4.01(b) which may include reasonable
efforts to sell the Financed Vehicle at public or private sale. If the Backup
Servicer has become the Servicer, it shall be entitled to receive Repossession
Expenses in accordance with Section 5.02 hereof.

            SECTION 4.04. Physical Damage Insurance.

The Servicer, in accordance with prudent servicing procedures, shall require
that each Obligor on a Contract shall have obtained physical damage insurance
covering the Financed Vehicle as of the date of execution of the Contract, as
may be required in accordance with the Credit Guidelines.

            SECTION 4.05. Maintenance of Security Interests in Financed
Vehicles.

The Servicer shall take such steps as are necessary to maintain perfection of
the security interest created by each Contract in the related Financed Vehicle,
including, without limitation, taking such steps as are reasonably necessary to
maintain the Originator as noted lienholder on each Certificate of Title
relating to a Financed Vehicle in all states where such notation is a means of
perfection under applicable law. The Servicer shall take such steps as are
necessary to reperfect such security interest on behalf of the Indenture Trustee
in the event of the relocation of a Financed Vehicle or for any other reason. In
the event that the assignment of a Contract to the Indenture Trustee is
insufficient without a notation on related Financed Vehicle's Certificate of
Title, or without fulfilling any additional administrative requirements under
the laws of the state in which the Financed Vehicle is located, to perfect a
security interest in the related Financed Vehicle in favor of the Indenture
Trustee, the parties hereto agree that the Originator's designation as the
secured party on the Certificate of Title is, with respect to each secured
party, as applicable, in its capacity as agent of the Indenture Trustee. The
Backup Servicer as successor Servicer shall be entitled to reimbursement for all
expenses incurred in connection with its duties under this Section 4.05.

            SECTION 4.06. Covenants of Servicer.

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<PAGE>

            (a) Affirmative Covenants. From the date hereof until the Stated
Final Maturity Date or, if earlier, the date the Class A Notes are paid in full:

                  (i) Compliance with Law. The Servicer will comply in all
      material respects with all Applicable Laws, including those with respect
      to the Dealer Loans, the Dealer Agreements the Contracts or any part
      thereof.

                  (ii) Preservation of Existence. The Servicer will preserve and
      maintain its existence, rights, franchises and privileges in the
      jurisdiction of its formation, and qualify and remain qualified in good
      standing as a foreign corporation in each jurisdiction where the failure
      to preserve and maintain such existence, rights, franchises, privileges
      and qualification has had, or could reasonably be expected to have, a
      material adverse effect on the Dealer Loans, the Dealer Agreements, the
      Contracts or the Class A Notes.

                  (iii) Obligations and Compliance with Dealer Loans and Dealer
      Agreements. The Servicer will duly fulfill and comply with all obligations
      on the part of the Seller to be fulfilled or complied with under or in
      connection with each Dealer Loan and each Dealer Agreement and will do
      nothing to impair the rights of the Trust Collateral Agent, the Indenture
      Trustee or the Class A Noteholders in, to and under the Trust Property.
      The Backup Servicer as successor Servicer shall not have an obligation to
      perform the obligations of the Servicer under this Section 4.06(a)(iii).

                  (iv) Keeping of Records and Books of Account. The Servicer
      will maintain and implement administrative and operating procedures
      (including without limitation, an ability to recreate records consistent
      with standards or practices in the industry evidencing the Dealer Loans
      and the Contracts in the event of the destruction of the originals
      thereof), and keep and maintain all documents, books, records and other
      information reasonably necessary or advisable for the collection of all
      Dealer Loans.

                  (v) Preservation of Security Interest. The Servicer will file
      such financing and continuation statements and any other documents that
      may be required by any law or regulation of any Governmental Authority to
      preserve and protect fully the security interest of the Indenture Trustee
      for the benefit of the Class A Noteholders, the Class A Insurer and the
      Backup Insurer in, to and under the Trust Property. In its capacity as
      custodian, it will maintain possession of the Dealer Agreements and the
      Contract Files and Records, as custodian for the Trust and the Trust
      Collateral Agent, as set forth in Section 3.3(a).

                  (vi) Collection Guidelines. The Servicer will (A) comply in
      all material respects with the Collection Guidelines in regard to each
      Loan and Contract, and (B) furnish to the Trust Collateral Agent, the
      Class A Insurer and the Backup Insurer quarterly, prompt notice of any
      material change in the Collection Guidelines and will deliver a copy of
      such changes to the Trust Collateral Agent, the Class A Insurer and the
      Backup Insurer, quarterly.

                  (vii) Books and Records. The Servicer shall keep, or cause to
      be kept, in reasonable detail, books and records of account of: (A) its
      assets and business, and

                                       40
<PAGE>

      shall clearly reflect therein the ownership of the Trust Property by the
      Issuer; and (B) any statutory trust records of the Trust required in
      accordance with Section 4.1(c)(iv) of the Trust Agreement.

                  (viii) Access to Records; Discussions with Officers. The
      Servicer shall, at the Servicer's expense upon the prior reasonable
      request of the Class A Insurer or the Backup Insurer, permit the Class A
      Insurer or the Backup Insurer, as applicable, or its authorized agent,
      access during normal business hours at its offices to (i) the Servicer's
      books of account, records, reports and other papers with respect to the
      Trust Property and the Basic Documents and (ii) any of the properties of
      the Servicer, in order to examine all of such books of account, records,
      reports and other papers, to make copies and extracts therefrom and to
      discuss the Servicer's affairs, finances and accounts with its officers,
      employees, and independent public accountants. Such inspections and
      discussions shall be conducted at such reasonable times, as often as may
      be reasonably requested and in a commercially reasonable manner.

                  (ix) ERISA. So long as the Seller or the Issuer are ERISA
      Affiliates of the Servicer, the Servicer shall comply in all material
      respects with the provisions of ERISA, the Code, and all other applicable
      laws, except where such non-compliance could not reasonably be expected to
      result in a material adverse effect with respect to the Servicer and its
      ERISA Affiliates or with respect to the Trust Property. Without limiting
      the foregoing, the Servicer shall not, and shall not permit its ERISA
      Affiliates to: (i) engage in any non-exempt prohibited transaction (within
      the meaning of the Internal Revenue Code Section 4975 or ERISA Section
      406) with respect to any Benefit Plan for which the Servicer and its ERISA
      Affiliates would have a material liability; (ii) suffer to exist any
      accumulated funding deficiency as defined in Section 301(a) of ERISA and
      Section 412(a) of the Internal Revenue Code with respect to any Benefit
      Plan in an amount exceeding $500,000 or (iii) terminate any Benefit Plan
      or Multiemployer Plan if such termination would result in any material
      liability for which the Seller or Issuer would be liable as ERISA
      Affiliates.

                  (x) Financial Reporting. The Servicer shall furnish or cause
      to be furnished to the Class A Insurer, the Backup Insurer and the Rating
      Agencies the following:

                  (A) Annual Financial Statements. As soon as available, and in
      any event within one hundred and twenty (120) days after the close of each
      fiscal year of the Servicer, the audited consolidated balance sheet of the
      Servicer as of the end of such fiscal year, and the audited consolidated
      statements of income, shareholders' equity and cash flows of the Servicer
      for such fiscal year in reasonable detail and stating in comparative form
      the respective figures for the corresponding date and period in the
      preceding fiscal year, in each case prepared in accordance with GAAP,
      consistently applied, and accompanied by the certificate of independent
      accountants and certified by an authorized officer of the Servicer as
      being complete and correct in all material respects, in each case
      presenting the financial condition and results of operations of the
      Servicer as of the dates and for the periods indicated, in accordance with
      GAAP consistently applied.

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<PAGE>

                  (B) Quarterly Financial Statements. As soon as available, and
      in any event within 60 days after the close of the first three quarters of
      each fiscal year of the Servicer, the unaudited consolidated balance sheet
      of the Servicer as of the end of each such quarter, and the unaudited
      consolidated statements of income and cash flows of the Servicer for the
      portion of the fiscal year then ended, in reasonable detail and stating in
      comparative form the respective figures for the corresponding date and
      period in the preceding fiscal year, prepared in accordance with GAAP,
      consistently applied (subject to normal year-end adjustments), and
      certified by an authorized officer of the Servicer as being complete and
      correct in all material respects and presenting the financial condition
      and results of operations of the Servicer as of the dates and for the
      periods indicated, in accordance with GAAP consistently applied (subject
      as to interim statements to normal year-end adjustments).

                  (C) Covenant Compliance Reports. Concurrently with the
      delivery of each financial report delivered under (b) or (c) above, a
      report in substantially the form attached to this Agreement as Exhibit I
      and certified by the chief accounting officer or the treasurer of the
      Servicer, as to whether the Servicer is in compliance with the Financial
      Covenants for the applicable fiscal quarter (or year-end) of the Servicer,
      as the case may be, in which report the Company shall set forth its
      calculations and the resultant ratios or financial tests determined
      thereunder, and certifying that no Servicer Default and no event which,
      with the giving of notice or the passage of time, would become a Servicer
      Default has occurred and is continuing or, if any such Servicer Default or
      other event has occurred and is continuing, such a Servicer Default has
      occurred and is continuing, the action which the Servicer has taken or
      proposes to take with respect thereto.

                  (D) Notices to Other Creditors. Concurrently with the delivery
      to the "Agent" under the Comerica Credit Agreement, but in any event no
      later than when such reports and notices are required to be given under
      such agreement, copies of any static pool analyses, notices of default,
      SEC filings, notices disclosing adverse litigation or a material adverse
      change in the Servicer's financial condition, business or operations.

                  (E) Other Material Events. As soon as possible, and in any
      event within three (3) Business Days after becoming aware of (i) any
      material adverse change in the financial condition of the Servicer or any
      of its Subsidiaries, a certificate of a financial officer setting forth
      the details of such change, or (ii) the submission of any claim or the
      initiation of any legal process, litigation or administrative or judicial
      investigation against the Servicer or any of its Subsidiaries in any
      federal, state or local court or before any arbitration board, or any such
      proceeding threatened by any governmental agency, which, if adversely
      determined, would be reasonably likely to cause a material adverse effect
      on the Servicer's financial condition or operations, its ability to
      perform its obligations hereunder or on the collectibility of the Trust
      Property.

                  (F) Other Information. Promptly upon request, such other
      information respecting the Trust Property or the Servicer as the Class A
      Insurer, the Backup Insurer or the Rating Agencies may reasonably request.

                                       42
<PAGE>

            (b) Negative Covenants. From the date hereof until the Stated Final
Maturity Date or, if earlier, the date the Class A Notes are paid in full:

                  (i) Mergers, Acquisition, Sales, etc. The Servicer will not
      consolidate with or merge into any other Person or convey or transfer its
      properties and assets substantially as an entirety to any Person, unless
      the Servicer is the surviving entity and unless:

                  (A) the Servicer has delivered to the Trust Collateral Agent,
      the Indenture Trustee, the Owner Trustee, the Backup Servicer, the Class A
      Insurer and the Backup Insurer an Officer's Certificate and an Opinion of
      Counsel each stating that any consolidation, merger, conveyance or
      transfer and such supplemental agreement comply with the terms of this
      Agreement and that all conditions precedent herein provided for relating
      to such transaction have been complied with and, in the case of the
      Opinion of Counsel, that such supplemental agreement is legal, valid and
      binding with respect to the Servicer and such other matters as the Trust
      Collateral Agent, the Class A Insurer or the Backup Insurer may reasonably
      request;

                  (B) the Servicer shall have delivered written notice of such
      consolidation, merger, conveyance or transfer to the Trust Collateral
      Agent, the Class A Insurer and the Backup Insurer; and,

                  (C) after giving effect thereto, no Servicer Default or event
      that with notice or lapse of time, or both, would constitute a Servicer
      Default shall have occurred.

                  (ii) Change of Name or Location of Records. Except as
      permitted under Section 7.03, the Servicer shall not (A) change its name
      or its state of organization, move the location of its principal place of
      business and chief executive office, and the offices where it keeps
      records concerning the Dealer Loans from the location referred to in
      Section 3.03(c), or (B) move the Records from the location thereof on the
      Closing Date, unless the Servicer has given at least thirty (30) days'
      written notice to the Trust Collateral Agent, the Indenture Trustee, the
      Class A Insurer and the Backup Insurer and has taken all actions required
      under the UCC of each relevant jurisdiction in order to continue the first
      priority perfected security interest of the Trust Collateral Agent as
      agent for the Class A Noteholders in the Trust Property.

                  (iii) Change in Payment Instructions to Obligors. The Servicer
      will not make any change in its instructions to Obligors (other than
      pursuant to its Collection Guidelines) regarding payments to be made
      directly or indirectly, unless the Trust Collateral Agent and the
      Controlling Party have each consented to such change and have received
      duly executed documentation related thereto; provided, however, any
      successor Servicer appointed Servicer hereunder, shall be permitted to
      make changes to such instructions directing the Obligors to make payments
      to such successor Servicer directly or indirectly upon its appointment,
      but any subsequent changes shall be subject to the consent provisions of
      this clause (iii).

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<PAGE>

                  (iv) No Instruments. The Servicer shall take no action to
      cause any Dealer Loan to be evidenced by any instrument (as defined in the
      UCC as in effect in the relevant jurisdictions).

                  (v) No Liens. The Servicer shall not sell, pledge, assign or
      transfer to any other Person, or grant, create, incur, assume or suffer to
      exist any Lien (other than in favor of the Trust Collateral Agent or the
      Trust as specifically contemplated herein) on the Trust Property or any
      interest therein; the Servicer will notify the Trust Collateral Agent, the
      Class A Insurer and the Backup Insurer of the existence of any Lien on any
      portion of the Trust Property immediately upon discovery thereof, and the
      Servicer shall defend the right, title and interest of the Trust
      Collateral Agent on behalf of the Class A Noteholders in, to and under the
      Trust Property against all claims of third parties claiming through or
      under the Servicer.

                  (vi) Credit Guidelines and Collection Guidelines. The Servicer
      will not amend, modify, restate or replace, in whole or in part, the
      Credit Guidelines or Collection Guidelines, which change would impair the
      collectibility of any Dealer Loan or Contract or otherwise adversely
      affect the interests or the remedies of the Trust Collateral Agent, the
      Trust, the Class A Insurer or the Backup Insurer under this Agreement or
      any other Basic Document, without the prior written consent of the Trust
      Collateral Agent and the Controlling Party.

                  (vii) Release of Contracts. Except for a release to an insurer
      in exchange for insurance proceeds paid by such insurer resulting from a
      claim for the total insured value of a vehicle, the Servicer shall not
      release or direct the Trust Collateral Agent to release the Financed
      Vehicle securing each such Contract from the security interest granted by
      such Contract in whole or in part, except in the event of (i) payment in
      full by or on behalf of the Obligor thereunder, (ii) settlement with the
      Obligor in respect of Defaulted Contracts consistent with its Collection
      Guidelines or (iii) repossession, nor shall the Servicer impair the rights
      of the Class A Noteholders, the Class A Insurer or the Backup Insurer in
      the Contracts which secure the Dealer Loans, except as may be required by
      applicable law.

            SECTION 4.07. Payments in Respect of Contracts Upon Breach.

            (a) The Servicer or the Trust Collateral Agent (provided that a
Responsible Officer of the Trust Collateral Agent has actual knowledge or has
received written notice thereof) shall inform the other parties to this
Agreement, the Class A Insurer and the Backup Insurer promptly, in writing, upon
the discovery of any breach of Section 4.01, 4.02, 4.03, 4.04, 4.05 or 4.06
hereof which materially and adversely affects the interest of the Issuer, the
Indenture Trustee, the Class A Insurer or the Backup Insurer. Unless the breach
shall have been cured by the last day of the first full Collection Period
following such actual knowledge or receipt of notice by an Authorized Officer of
the Servicer, the Servicer shall, as of the Business Day preceding the
Determination Date relating to the respective Collection Period, make payments
with respect to any nonconforming Dealer Loan that is materially and adversely
affected by such breach or which materially and adversely affects the interests
of either Insurer (or the Class A Noteholders if both a Class A Insurer Default
and a Backup Insurer Default are then continuing),

                                       44
<PAGE>

and shall prepay in full any nonconforming Contract that is materially and
adversely affected by such breach or which materially and adversely affects the
interests of either Insurer (or the Class A Noteholders if both a Class A
Insurer Default and a Backup Insurer Default are then continuing); provided,
however, if the Backup Servicer is acting as successor Servicer, it shall not
have any obligation to make payments with respect to any Dealer Loans or prepay
any Contracts. In consideration of the making of payments with respect to such
Dealer Loan or such Contract, the Servicer shall remit the Purchase Amount.
Notwithstanding anything herein to the contrary, (i) during the Revolving
Period, such payments shall not be required if the Adjusted Collateral Amount is
equal to or greater than the Minimum Collateral Amount; and (ii) during the
Amortization Period, such payments shall not be required: (A) with respect to
any Loan, so long as the aggregate Net Loan Balance of all Dealer Loans which
would be Ineligible Loans as a result of being subject to the foregoing payment
obligations during the Amortization Period is less than the Amortization Period
Additional Loan Collateral Amount; and (B) with respect to any Contract, so long
as the aggregate Outstanding Balance of all Contracts which would be Ineligible
Contracts as a result of being subject to the foregoing payment obligations
during the Amortization Period is less than the Amortization Period Additional
Contract Collateral Amount.

            (b) If such payments are required in accordance with clause (a) of
this Section 4.07, they shall be made only with respect to the Amortization
Period Payment Obligations. Notwithstanding the foregoing, the Servicer's
obligation to make any payment under this Section 4.07 may be waived with the
prior written consent of the Controlling Party or the Indenture Trustee, at the
direction of the Majority Noteholders, if both a Class A Insurer Default and a
Backup Insurer Default have occurred and are continuing. The Trust Collateral
Agent shall have no duty to conduct any affirmative investigation or inquiry as
to the occurrence of any condition requiring payments to be made with respect to
any Dealer Loan or Contract pursuant to this Section. Any such waiver by the
Controlling Party or the Indenture Trustee, at the direction of the Majority
Noteholders, as applicable, shall not require any further waiver, action or
consent by any other party. The party providing such waiver shall give notice
thereof to the Owner Trustee.

            SECTION 4.08. Servicer Fee.

The Servicer, including any successor Servicer, shall be entitled to payment of
the Servicing Fee as defined herein, which shall be payable in accordance with
Section 5.08(a) hereof. In no event shall the Indenture Trustee or the Trust
Collateral Agent be responsible for the Servicing Fee or for any differential
between the Servicing Fee and the amount necessary to induce a successor
Servicer to assume the obligations of Servicer hereunder.

            SECTION 4.09. Servicer's Certificate.

            (a) By the Determination Date in each calendar month, the Servicer
shall deliver to the Trust Collateral Agent, the Class A Insurer, the Backup
Insurer, the Rating Agencies, the Backup Servicer, and Wachovia Capital Markets,
LLC, a Servicer's Certificate substantially in the form of Exhibit B hereto
containing all information necessary to make the transfers, deposits and
distributions pursuant to Sections 5.04 through 5.11 hereof for the Collection
Period immediately preceding the date of such Servicer's Certificate and as of
the last day of such Collection Period, and all information necessary for the
Trust Collateral Agent to

                                       45
<PAGE>

make available statements to Class A Noteholders, the Class A Insurer and the
Backup Insurer pursuant to Section 5.11 hereof. Upon receipt of the Servicer's
Certificate, the Trust Collateral Agent shall conclusively rely (and shall be
fully protected in so relying) on the information contained therein for the
purposes of making distributions and allocations as provided for herein. Each
Servicer's Certificate shall be certified by a Responsible Officer of the
Servicer. The Seller shall assist the Trust Collateral Agent with its obligation
to make distributions and allocations. Dealer Loans purchased by the Trust shall
be identified by the Servicer by the Dealer's account number and certain other
information with respect to such Dealer Loan (as specified in Schedule A to this
Agreement).

            (b) No later than 9:00 A.M. New York time on the third (3rd)
Business Day of each calendar month (the "Servicer's Data Date"), the Servicer
shall send to the Backup Servicer a Computer Tape, detailing the payments on the
Dealer Loans during the prior Collection Period (the "Servicer's Data File").
Such Computer Tape shall be in the form and have the specifications as may be
agreed to between the Servicer and the Backup Servicer from time to time.

            (c) No later than the end of the second (2nd) Business Day prior to
each Determination Date, the Servicer shall furnish to the Backup Servicer the
Servicer's Certificate related to the prior Collection Period. The Backup
Servicer shall review the information contained in the Servicer's Certificate
against the information on the Servicer's Data File, on an aggregate basis. No
later than three (3) Business Days after the Backup Servicer's receipt of such
Servicer's Certificate, the Backup Servicer shall notify the Servicer, the Class
A Insurer, the Backup Insurer, the Trust Collateral Agent and the Indenture
Trustee of any inconsistencies between the Servicer's Certificate and the
Servicer's Data File and the Backup Servicer and the Servicer shall attempt to
reconcile such inconsistencies; provided, however, in the absence of a
reconciliation, the Servicer's Certificate shall control for the purpose of
calculations and distributions with respect to the related Distribution Date. If
the Backup Servicer and the Servicer are unable to reconcile discrepancies with
respect to a Servicer's Certificate by the related Distribution Date, the
Servicer shall cause the Independent Accountants, at the Servicer's expense, to
audit the Servicer's Certificate and, prior to the third Business Day, but in no
event later than the fifth calendar day, of the following month, reconcile the
discrepancies. The effect, if any, of such reconciliation shall be reflected in
the Servicer's Certificate for such next Determination Date. The Backup Servicer
shall only review the information provided by the Servicer in the Servicer's
Certificate and in the Servicer's Data File and its obligation to report any
inconsistencies shall be limited to those determinable from such information.

            The Backup Servicer and the Servicer shall attempt to reconcile any
such material inconsistencies and/or to furnish any such omitted information and
the Servicer shall amend the Servicer's Certificate to reflect the Backup
Servicer's computations or to include the omitted information. The Backup
Servicer shall in no event be liable to the Servicer with respect to any failure
of the Backup Servicer to discover or detect any errors, inconsistencies, or
omissions by the Servicer with respect to the Servicer's Certificate and
Servicer's Data File except as specifically set forth in this Section.

            (d) The Servicer shall provide to the Backup Servicer, or its agent,
monthly, or as frequently as may be otherwise requested, information on the
Dealer Loans and related

                                       46
<PAGE>

Contracts sufficient to enable the Backup Servicer to assume the
responsibilities as successor Servicer and collect on the Contracts.

            (e) Except as provided in this Agreement, the Backup Servicer may
accept and conclusively rely on all accounting, records and work of the Servicer
without audit, and the Backup Servicer shall have no liability for the acts or
omissions of the Servicer. If any error, inaccuracy or omission (collectively,
"Errors") exists in any information received from the Servicer, and such Errors
should cause or materially contribute to the Backup Servicer making or
continuing any Errors (collectively, "Continued Errors"), the Backup Servicer
shall have no liability for such Continued Errors; provided, however, that this
provision shall not protect the Backup Servicer against any liability that would
otherwise be imposed by reason of willful misconduct, bad faith or gross
negligence in discovering or correcting any Error or in the performance of its
or their duties hereunder or under this Agreement. In the event the Backup
Servicer becomes aware of Errors or Continued Errors, the Backup Servicer shall,
with the prior consent of the Controlling Party, use its best efforts to
reconstruct and reconcile such data as is commercially reasonable to correct
such Errors and Continued Errors and prevent future Continued Errors. The Backup
Servicer shall be entitled to recover its costs thereby expended from the
Servicer.

            (f) The Backup Servicer and its officers, directors, employees and
agent shall be indemnified by the Servicer and the Issuer, from and against all
claims, damages, losses or expenses reasonably incurred by the Backup Servicer
(including reasonable attorney's fees) arising out of claims asserted against
the Backup Servicer by third parties on any matter arising out of this Agreement
to the extent the act or omission giving rise to the claim accrues before the
date on which the Backup Servicer assumes the duties of Servicer hereunder,
except for any claims, damages, losses or expenses arising from the Backup
Servicer's own gross negligence, bad faith or willful misconduct.
Indemnification by the Servicer and the Issuer under this Section 4.09(f) shall
survive the termination of this Agreement or the earlier removal or resignation
of the Backup Servicer.

            SECTION 4.10. Annual Statement as to Compliance; Notice of Default.

            (a) The Servicer shall deliver to the Trust Collateral Agent, the
Owner Trustee, the Rating Agencies, the Indenture Trustee, the Class A Insurer,
the Backup Insurer and the Class A Noteholders, on or before April 30th of each
year beginning in the year 2005, an Officer's Certificate, dated as of the
preceding December 31st, stating that (i) a review of the activities of the
Servicer during the preceding 12-month (or for the initial certificate, for such
shorter period as may have elapsed from the Closing Date to such December 31st
or, with respect to a successor Servicer, shorter period if a successor Servicer
becomes Servicer after the beginning of a calendar year) period and of its
performance under this Agreement has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.

            (b) The Servicer shall deliver to the Trust Collateral Agent, the
Indenture Trustee, the Owner Trustee, the Class A Insurer, the Backup Insurer
and to the Rating Agencies,

                                       47
<PAGE>

promptly after having obtained knowledge thereof, but in no event later than
five (5) Business Days thereafter, written notice in an Officer's Certificate of
any event which with the giving of notice or lapse of time, or both, would
become a Servicer Default under Section 8.01. The Seller shall deliver to the
Trust Collateral Agent, the Indenture Trustee, the Class A Insurer, the Backup
Insurer and to such Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officer's Certificate of any event which with the giving of notice
or lapse of time, or both, would become a Servicer Default under clause (ii) of
Section 8.01. The Trust Collateral Agent shall forward a copy of each Officer's
Certificate so received to each Class A Noteholder.

            SECTION 4.11. Annual Independent Certified Public Accountant's
Report.

            (a) The Servicer will deliver to the Trust Collateral Agent, the
Owner Trustee, the Indenture Trustee, each Class A Noteholder, the Class A
Insurer, the Backup Insurer and the Rating Agencies, on or before April 30th of
each year beginning in the year 2005, a copy of a report prepared by Independent
Accountants, who may also render other services to the Servicer or any of its
Affiliates, or to the Seller, addressed to the Board of Directors of the
Servicer, the Indenture Trustee, the Class A Insurer and the Backup Insurer and
dated during the current year, to the effect that such firm has examined the
Servicer's policies and procedures and issued its report thereon and expressing
a summary of findings (based on the procedures to be performed on the documents,
records and accounting records set forth in clause (b) of this Section 4.11)
relating to the servicing of the Dealer Loans and the related Contracts and the
administration of the Dealer Loans and the related Contracts and of the Trust
during the preceding calendar year and that such servicing and administration
was conducted in compliance with the terms of this Agreement, except for (i)
such exceptions as such firm shall believe to be immaterial and (ii) such other
exceptions as shall be set forth in such report and that such examination (1)
was performed in accordance with standards established by the American Institute
of Certified Public Accountants, and (2) included tests relating to auto loans
serviced for others in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers (the "Program") to the extent the
procedures in the Program are applicable to the servicing obligations set forth
in this Agreement. For purposes of clause (i) of this Section 4.11(a), an amount
shall be deemed "immaterial" if it is less than $1,000 or 0.05%.

            In the event such independent public accountants require the Trust
Collateral Agent to agree to the procedures to be performed by such firm in any
of the reports required to be prepared pursuant to this Section 4.11, the
Servicer shall direct the Trust Collateral Agent in writing to so agree; it
being understood and agreed that the Trust Collateral Agent will deliver such
letter of agreement in conclusive reliance upon the direction of the Servicer,
and the Trust Collateral Agent has not made any independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.

            Such report shall also indicate that the firm is independent of the
Servicer and its Affiliates within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants.

            (b) The procedures to be performed by the Independent Accountants
shall include: (i) a comparison of the data contained in two (2) Servicer
Certificates (which are to be

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<PAGE>

selected at random by the Controlling Party from all of the Servicer
Certificates delivered during the applicable fiscal year) to (A) the Servicer's
internal reports derived from its loan servicing system, (B) information
obtained by the Servicer from the Indenture Trustee in compiling the Servicer
Certificates, and (C) such other information used in the preparation of the
Servicer Certificates, to confirm the calculation of the data contained in the
Servicer Certificates; (ii) a comparison of the Aggregate Outstanding Eligible
Loan Balance contained on three (3) Servicer Certificates (which are to be
selected at random by the Controlling Party from all of the Servicer
Certificates delivered during the applicable fiscal year) to the Servicer's
internal reports derived from its loan servicing system, to confirm the
calculation of such amount; (iii) an audit of the Servicer's cash collections
procedures by testing a random sample of five (5) daily cash receipts from the
Servicer's list of cash collections for the applicable fiscal year to confirm
that Collections received are deposited to the Collection Account within two (2)
Business Days of receipt; and (iv) such other procedures as may be mutually
agreed upon by the Servicer, the Controlling Party and the Independent
Accountants which are considered appropriate under the circumstances.

            SECTION 4.12. Access to Certain Documentation and Information
Regarding Dealer Loans and Contracts.

The Servicer shall provide to each Class A Noteholder, the Indenture Trustee,
the Trust Collateral Agent, the Class A Insurer and the Backup Insurer access to
its records pertaining to the Dealer Loans and the related Contracts, upon prior
written request. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the offices of the
Servicer. Nothing in this Section shall affect the obligation of the Servicer to
observe any Applicable Law prohibiting disclosure of information regarding the
Dealers or the Obligors, and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section.

            SECTION 4.13. Servicer Expenses.

The Servicer shall be required to pay all expenses incurred by it in connection
with its activities hereunder, including fees and disbursements of independent
accountants, taxes imposed on the Servicer and expenses incurred in connection
with distributions and reports to Class A Noteholders, the Indenture Trustee,
the Trust Collateral Agent, the Class A Insurer and the Backup Insurer and with
administering the duties of the Trust and the Issuer. If the Backup Servicer has
become the Servicer, it shall be entitled to be reimbursed for all Servicer
Expenses, Repossession Expenses, Reliening Expenses and Transition Expenses in
accordance with Section 5.08(a) hereof.

            SECTION 4.14. Servicer Not to Resign as Servicer.

Subject to the provisions of Section 7.03 of this Agreement, the Servicer shall
not resign from the obligations and duties hereby imposed on it as Servicer
under this Agreement except upon determination that the performance of its
duties under this Agreement shall no longer be permissible under applicable law.
Notice of any such determination permitting the resignation of the Servicer
shall be communicated to the Trust Collateral Agent, the Rating Agencies, the
Class A Insurer, the Backup Insurer and the Indenture Trustee within five (5)
Business Days thereafter

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<PAGE>

(and, if such communication is not in writing, shall be confirmed in writing
within five (5) Business Days thereafter) and any such determination shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trust
Collateral Agent, the Class A Insurer, the Backup Insurer and the Indenture
Trustee concurrently with or promptly after such notice. No such resignation
shall become effective until the successor Servicer, appointed in accordance
with Section 8.02 hereof, shall have taken the actions required by the last
paragraph of Section 8.01 of this Agreement and shall have assumed the
responsibilities and obligations of the predecessor Servicer in accordance with
Section 8.02 of this Agreement. The Trust Collateral Agent shall forward a copy
of each notice so received to each Class A Noteholder and the Rating Agencies.

            SECTION 4.15. The Backup Servicer.

            (a) Prior to assuming any of the Servicer's rights and obligations
hereunder the Backup Servicer shall only be responsible to perform those duties
specifically imposed upon it by the provisions of the Backup Servicing
Agreement, and no implied obligations shall be read into this Agreement against
the Backup Servicer. Such duties generally relate to following the provisions
herein which would permit the Backup Servicer to assume some or all of the
Servicer's rights and obligations hereunder (as modified or limited herein or in
the Backup Servicing Agreement) with reasonable dispatch, following notice.

            The Backup Servicer, prior to assuming any of the Servicer's duties
hereunder, may not resign hereunder unless it arranges for a successor Backup
Servicer reasonably acceptable to the Servicer, the Seller and the Controlling
Party or the Indenture Trustee, if both a Class A Insurer Default and a Backup
Insurer Default have occurred and are continuing, with not less than 30 days'
notice delivered to the Class A Insurer, the Backup Insurer, the Servicer and
the Seller. Prior to its becoming successor Servicer, the Backup Servicer shall
have only those duties and obligations imposed by it under this Agreement, and
shall have no obligations or duties under any agreement to which it is not a
party, including but not limited to the various agreements named herein.

            (b) The Backup Servicer shall not be required to expend or risk its
own funds or otherwise incur liability (financial or otherwise) in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if the repayment of such funds or written indemnity reasonably
satisfactory to it against such risk or liability is not reasonably assured to
it in writing prior to the expenditure or risk of such funds or incurrence of
financial liability. Notwithstanding any provision to the contrary, the Backup
Servicer, in its capacity as such, and not in its capacity as successor
Servicer, shall not be liable for any obligation of the Servicer contained in
this Agreement, and the parties shall look only to the Servicer to perform such
obligations.

            (c) The Servicer shall have no liability, direct or indirect, to any
party, for the acts or omissions of the Backup Servicer, whenever such acts or
omissions occur whenever such liability is imposed, except as set forth in
Section 4.09(f). The successor Servicer shall not be liable for the acts or
omissions of any predecessor Servicer.

            (d) Notwithstanding anything to the contrary herein, so long as both
a Class A Insurer Default and Backup Insurer Default are not continuing, the
Controlling Party shall have

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<PAGE>

the right to remove the Backup Servicer for cause at any time and replace the
Backup Servicer. In the event that the Controlling Party exercises its right to
remove and replace SST as Backup Servicer, SST shall have no further obligation
to perform the duties of the Backup Servicer under this Agreement.

            SECTION 4.16. Fidelity Bond.

The Servicer hereby represents and covenants that the Servicer has obtained, and
shall continue to maintain in full force and effect, a fidelity bond covering
the Servicer of a type and in such amount as is customary for prudent servicers
engaged in the business of servicing sub-prime and non-prime motor vehicle
retail installment sales contracts similar to the Contracts.

            SECTION 4.17. Obligations in Respect of the Owner Trustee.

To the extent Credit Acceptance is no longer the Servicer hereunder, Credit
Acceptance, in its individual capacity, agrees to perform the obligations of the
Servicer in respect of the Owner Trustee and the Trust described in Section
4.01(d) and Section 4.06(a)(vii)(B) hereof and in Section 6.2 of the Trust
Agreement.

                                   ARTICLE V

         TRUST ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
                                AND NOTEHOLDERS

            SECTION 5.01. Establishment of Trust Accounts.

            (a)   (i) On or prior to the Closing Date, the Trust Collateral
      Agent, on behalf of the Indenture Trustee, for the benefit of the Class A
      Noteholders, the Class A Insurer, the Backup Insurer and, after the Class
      A Termination Date, the Certificateholders, shall establish and maintain
      in its own name two Eligible Accounts (respectively, the "Collection
      Account" and the "Principal Collection Account") bearing a designation
      clearly indicating that the funds deposited therein are held for the
      benefit of the Trust Collateral Agent on behalf of the Indenture Trustee
      for the benefit of the Class A Noteholders, the Class A Insurer, the
      Backup Insurer and, after the Class A Termination Date, the
      Certificateholders, as their interests may appear. The Collection Account
      and the Principal Collection Account shall initially be established with
      the Trust Collateral Agent.

                  (ii) The Trust Collateral Agent, on behalf of the Indenture
      Trustee, for the benefit of the Class A Noteholders, the Class A Insurer,
      the Backup Insurer and, after the Class A Termination Date, the
      Certificateholders, shall establish and maintain in its own name an
      Eligible Account (the "Class A Note Distribution Account") bearing a
      designation clearly indicating that the funds deposited therein are held
      for the benefit of the Trust Collateral Agent on behalf of the Indenture
      Trustee for the benefit of the Class A Noteholder, the Class A Insurer,
      the Backup Insurer and, after the Class A Termination Date, the
      Certificateholders, as their interests may appear. The Class A Note
      Distribution Account shall initially be established with the Trust
      Collateral Agent.

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<PAGE>

                  (iii) The Trust Collateral Agent, on behalf of the Indenture
      Trustee, for the benefit of the Certificateholders, shall establish and
      maintain in its own name an Eligible Account (the "Certificate
      Distribution Account") bearing a designation clearly indicating that the
      funds deposited therein are held for the benefit of the Trust Collateral
      Agent on behalf of the Indenture Trustee for the benefit of the
      Certificateholders. The Certificate Distribution Account shall initially
      be established with the Trust Collateral Agent.

                  (iv) The Trust Collateral Agent, on behalf of the Class A
      Noteholders, the Class A Insurer, the Backup Insurer and, after the Class
      A Termination Date, the Certificateholders, as their interests may appear,
      shall establish and maintain in its own name an Eligible Account (the
      "Reserve Account") bearing a designation clearly indicating that the funds
      deposited therein are held for the benefit of the Trust Collateral Agent
      on behalf of the Indenture Trustee for the benefit of the Class A
      Noteholders, the Class A Insurer, the Backup Insurer and, after the Class
      A Termination Date, the Certificateholders, as their interests may appear.
      The Reserve Account shall initially be established with the Trust
      Collateral Agent.

            (b) Funds on deposit in the Collection Account, subject to Sections
5.06(b) and 5.07(b) hereof, the Principal Collection Account and the Reserve
Account shall each be invested by the Trust Collateral Agent (or any custodian
with respect to funds on deposit in any such account) in Eligible Investments
selected in writing by the Servicer (pursuant to standing instructions or
otherwise), bearing interest or sold at a discount, and maturing, unless payable
on demand, no later than the Business Day immediately preceding the next
Distribution Date; provided, however, it is understood and agreed that the Trust
Collateral Agent shall not be liable for any loss arising from such investment
in Eligible Investments unless the Eligible Investment was a direct obligation
of the Trust Collateral Agent in its commercial capacity or unless such loss was
caused by the Trust Collateral Agent's negligence or willful misconduct (it
being understood and acknowledged that no loss on any such Eligible Investment
which was made in conformity with this Agreement and the instructions of the
Servicer shall be considered "caused by the Trust Collateral Agent's negligence
or willful misconduct"). All such Eligible Investments shall be held by or on
behalf of the Trust Collateral Agent for the benefit of the Indenture Trustee on
behalf of the Class A Noteholders, the Class A Insurer, the Backup Insurer and,
after the Class A Termination Date, the Certificateholders, as their interests
may appear. Funds deposited in the Collection Account on the day immediately
preceding a Distribution Date upon the maturity of any Eligible Investments are
not required to be invested overnight. On each Distribution Date, all interest
and investment income (net of investment losses and expenses) on funds on
deposit in the Collection Account, as of the end of the Collection Period shall
be included in Available Funds; and all interest and other investment income
(net of investment losses and expenses) on funds on deposit in the Reserve
Account shall be deposited into the Reserve Account. On each Distribution Date
during the Revolving Period, all interest and other investment income (net of
investment losses and expense) on funds on deposit in the Principal Collection
Account shall be deposited into the Principal Collection Account; thereafter,
such interest and other investment income (net of investment losses and expense)
shall be included in Available Funds in the Collection Account.

                                       52
<PAGE>

            (c) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Collection Account, the Principal
Collection Account or the Reserve Account to the Trust Collateral Agent by 2:00
p.m. Eastern Time (or such other time as may be agreed by the Issuer and Trust
Collateral Agent) on any Business Day; or (ii) an Indenture Default or Indenture
Event of Default shall have occurred and be continuing with respect to the Class
A Notes but the Class A Notes shall not have been declared due and payable, or,
if such Class A Notes shall have been declared due and payable following an
Indenture Event of Default, amounts collected or receivable from the Trust
Property are being applied as if there had not been such a declaration; then the
Trust Collateral Agent shall, to the fullest extent practicable, invest and
reinvest funds in the Collection Account, the Principal Collection Account or
the Reserve Account, as the case may be, in Eligible Investments described in
clause (vi) of the definition thereof.

            (d) (i) Subject to the grant of the security interest pursuant to
the Indenture in favor of the Indenture Trustee, the Trust shall possess all
right, title and interest in all funds on deposit from time to time in the Trust
Accounts (other than Dealer Collections) and in all proceeds thereof and all
such funds, investments, proceeds and income shall be part of the Trust
Property. Except as otherwise provided herein, the Trust Accounts shall be under
the sole dominion and control of the Trust Collateral Agent for the benefit of
the Class A Noteholders, the Class A Insurer, the Backup Insurer and, after the
Class A Termination Date, the Certificateholders, as their interests may appear.

                  (ii) With respect to any Eligible Investments held from time
      to time in any Trust Account, the Trust Collateral Agent agrees that:

                  (A) any Eligible Investment that is held in deposit accounts
      shall be, except as otherwise provided herein, subject to the exclusive
      custody and control of the Trust Collateral Agent, and the Trust
      Collateral Agent shall have sole signature authority with respect thereto;

                  (B) any Eligible Investment that constitutes Physical Property
      shall be delivered to the Trust Collateral Agent in accordance with
      paragraph (a) of the definition of "Delivery" and shall be held, pending
      maturity or disposition, solely by the Trust Collateral Agent or a
      securities intermediary (as such term is defined in Section 8-102(a)(14)
      of the UCC) acting solely for the Trust Collateral Agent;

                  (C) any Eligible Investment that is a book-entry security held
      through the Federal Reserve System pursuant to Federal book-entry
      regulations shall be delivered in accordance with paragraph (b) of the
      definition of "Delivery" and shall be maintained by the Trust Collateral
      Agent, pending maturity or disposition, through continued book-entry
      registration of such Eligible Investment as described in such paragraph;
      and

                  (D) any Eligible Investment that is an "uncertificated
      security" under Article 8 of the UCC and that is not governed by clause
      (C) above shall be delivered to the Trust Collateral Agent in accordance
      with paragraph (c) of the definition of "Delivery" and shall be maintained
      by the Trust Collateral Agent, pending maturity or

                                       53
<PAGE>

      disposition, through continued registration of the Trust Collateral
      Agent's (or its nominee's) ownership of such security.

            (e) The Servicer shall have the power, revocable by the Controlling
Party, the Trust Collateral Agent, by the Indenture Trustee or by the Owner
Trustee, each with the prior written consent of the Controlling Party (so long
as both a Class A Insurer Default and a Backup Insurer Default are not
continuing) and the Indenture Trustee, to instruct the Trust Collateral Agent to
make withdrawals and payments from the Trust Accounts for the purpose of
permitting the Servicer and the Trust Collateral Agent to carry out its
respective duties hereunder.

            (f) If ratings of the unsecured and uncollateralized long-term debt
obligations of the Trust Collateral Agent or its parent are lower than "AA-" by
S&P and "Aa3" by Moody's, then the Servicer shall, with the Trust Collateral
Agent's assistance as necessary, cause the Trust Accounts to be moved within
five (5) Business Days to another institution where such Trust Accounts will be
Eligible Accounts.

            SECTION 5.02. Collections; Allocation.

The Servicer shall remit to the Collection Account within two (2) Business Days
of receipt all Collections collected during each Collection Period. On the
Closing Date, the Servicer shall deposit in the Collection Account the foregoing
amounts received with respect to the Dealer Loans and Contracts since the
initial Cut-off Date.

The Servicer shall determine each month the amount of Collections received
during each Collection Period which constitutes Dealer Collections and shall so
notify the Trust Collateral Agent in writing. Notwithstanding any other
provision hereof, the Trust Collateral Agent, at the written direction of the
Servicer, shall distribute on each Distribution Date: (i) to the Issuer an
amount equal to the aggregate amount of Dealer Collections received during or
with respect to the prior Collection Period; and (ii) to the Backup Servicer, if
it has become successor Servicer, an amount equal to Repossession Expenses
related to the prior Collection Period prior to the distribution of Available
Funds pursuant to Section 5.08(a) hereof. Upon receipt, the Issuer shall remit
all Dealer Collections to Credit Acceptance. In the event the Backup Servicer is
acting as successor Servicer, the Seller shall assist the Backup Servicer in the
performance of its obligations under this Section 5.02.

            SECTION 5.03. Certain Reimbursements to the Servicer.

The Servicer will be entitled to be reimbursed from amounts on deposit in the
Collection Account with respect to a Collection Period for amounts previously
deposited in the Collection Account but later determined by the Servicer to have
resulted from mistaken deposits or postings or checks returned for insufficient
funds. The amount to be reimbursed hereunder shall be paid to the Servicer on
the next succeeding Business Day(s) out of collections on Dealer Loans and the
related Contracts to be remitted to the Collection Account to the extent the net
amount to the Collection Account is greater than zero.

                                       54
<PAGE>

            SECTION 5.04. Additional Deposits.

            (a) The Servicer or the Seller, as applicable, shall deposit or
cause to be deposited in the Collection Account each Purchase Amount paid
hereunder. Credit Acceptance shall deposit any amounts in respect of the Limited
Repurchase Option to the Collection Account. All such deposits with respect to a
Collection Period shall be made, in immediately available funds, on the Business
Day immediately preceding the Determination Date related to such Collection
Period.

            (b) The proceeds of any purchase or sale of the assets of the Trust
described in Section 10.01 hereof shall be deposited by the Seller or the
Servicer, as applicable, in the Collection Account on the Business Day
immediately preceding the Distribution Date on which such purchase shall occur.

            (c) Following the acceleration of the Class A Notes pursuant to
Section 5.2 of the Indenture, the proceeds shall be deposited in the Collection
Account to be distributed by the Indenture Trustee in accordance with Section
5.2(b) of the Indenture.

            SECTION 5.05. Reserve Account.

            (a) On the Closing Date, the Seller shall direct the Trust
Collateral Agent to deposit to the Reserve Account a cash amount equal to the
Initial Reserve Amount.

            (b) With respect to each Distribution Date, on the fifth Business
Day immediately preceding such Distribution Date, the Servicer (provided, that
in the event the Backup Servicer is acting as successor Servicer, the Seller
shall assist the Backup Servicer in the performance of its obligations under
this Section 5.05(b)) shall instruct the Trust Collateral Agent (based on the
information contained in the Servicer's Certificate delivered to the Trust
Collateral Agent in respect of the related Determination Date pursuant to
Section 4.09), prior to the making of any transfers pursuant to Section 5.08
hereof, if required, to withdraw from the Reserve Account to the extent
available therein with respect to amounts payable on such Distribution Date, the
amounts specified below, and deposit such amounts in the Collection Account to
be applied as follows:

                  (i) first, an amount equal to the excess of (x) the Servicing
      Fee, up to the Capped Servicing Fee, over (y) the Available Funds required
      to be applied pursuant to Section 5.08(a)(i) hereof on such Distribution
      Date;

                  (ii) second, an amount equal to the excess of (x) the Class A
      Interest Distributable Amount plus the Class A Interest Carryover
      Shortfall, if any, over (y) the Available Funds required to be applied
      pursuant to Section 5.08(a)(ii) hereof on such Distribution Date;

                  (iii) third, an amount equal to the excess of (x) any amounts
      due and payable to the Class A Insurer and the Backup Insurer under
      Section 5.08(a)(iv) hereof over (y) the Available Funds required to be
      applied pursuant to Section 5.08(a)(iv) hereof on such Distribution Date;

                                       55
<PAGE>

                  (iv) fourth, an amount equal to the Principal Deficiency
      (assuming that, for purposes of determining the Principal Deficiency in
      this clause only, the amounts available for the distribution of principal
      are attributable to those amounts required to be applied pursuant to
      Section 5.08(a)(vii) hereof) on such Distribution Date;

                  (v) fifth, if the next Distribution Date is the Stated Final
      Maturity, an amount equal to the excess of (x) the Class A Note Balance
      over (y) the Available Funds required to be applied pursuant to Section
      5.08(a)(vii) hereof on the Stated Final Maturity;

                  (vi) sixth, an amount equal to the excess of (x) without
      duplication, the Reimbursement Obligations over (y) the Available Funds
      required to be applied pursuant to Section 5.08(a)(viii) hereof on such
      Distribution Date; and

                  (vii) seventh, an amount equal to the excess of the funds
      remaining in the Reserve Account after the withdrawals referred to in
      clauses (i) through (vi) above over the Reserve Account Requirement on
      such Distribution Date.

            (c) Notwithstanding the foregoing, all transfers of funds between
accounts may occur on the Business Day immediately preceding the Distribution
Date related to such transfer; all distributions from accounts shall occur on
the Distribution Date.

            (d) Amounts withdrawn from the Reserve Account pursuant to clause
(b)(i)-(vi) above shall be used solely for the amounts described in clause
(b)(i)-(vi) above, as applicable. Amounts withdrawn from the Reserve Account
pursuant to clause (b)(vii) above shall constitute Available Funds.

            SECTION 5.06. Payments under the Class A Note Insurance Policy.

            (a) (i) If, on the close of business on the fifth Business Day
      immediately prior to any Distribution Date with respect to the Class A
      Notes, the sum of (A) the Class A Interest Distributable Amount (exclusive
      of Default Interest, as defined in the Class A Note Insurance Policy) and
      (B) with respect to any Distribution Date other than the Stated Final
      Maturity, any Principal Deficiency, exceeds the sum of (x) Available Funds
      on deposit in the Collection Account and available for payment of the
      Class A Interest Distributable Amount and/or Principal Deficiency and (y)
      the amount on deposit in the Reserve Account on such Distribution Date and
      available for payment of the Class A Interest Distributable Amount and/ or
      Principal Deficiency, the Trust Collateral Agent shall, no later than
      12:00 noon New York time, on the fourth Business Day immediately preceding
      such Distribution Date make a claim under the Class A Note Insurance
      Policy in an amount equal to such excess, in accordance with the terms of
      the Class A Note Insurance Policy.

                  (i) (ii) If, on the close of business on the fifth Business
      Day immediately prior to the Stated Final Maturity, the excess of (A) the
      original Class A Note Balance over (B) the aggregate amount of any
      payments previously made in respect of principal on the Class A Notes
      exceeds the sum of (x) Available Funds remaining in the Collection Account
      and available for payment of the Class A Principal Distributable Amount
      hereof

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<PAGE>

      and (y) the amount available on the Stated Final Maturity in the Reserve
      Account and available for payment of the Class A Principal Distributable
      Amount, the Trust Collateral Agent shall, no later than 12:00 noon New
      York time, on the fourth Business Day immediately preceding the Stated
      Final Maturity make a claim under the Class A Note Insurance Policy in an
      amount equal to such excess, in accordance with the terms of the Class A
      Note Insurance Policy.

                  (iii) Any payment made by the Class A Insurer in respect of
      the Class A Interest Distributable Amount shall constitute a "Class A
      Insurer Interest Shortfall Payment". Any payment by the Class A Insurer in
      respect of principal of the Class A Notes shall constitute a "Class A
      Insurer Principal Payment".

            (b) Proceeds of claims on the Class A Note Insurance Policy shall be
deposited in the Collection Account, shall remain uninvested and shall be used
solely to pay amounts due in respect of interest and principal on the Class A
Notes on each Distribution Date or the Stated Final Maturity, as applicable.

            (c) (i) On any day that a Responsible Officer of the Trust
      Collateral Agent has actual knowledge or receives written notice that any
      amount previously paid to a Class A Noteholder has been subsequently
      recovered from such Class A Noteholder pursuant to a final, non-appealable
      order of a court of competent jurisdiction that such payment constitutes
      an avoidable preference within the meaning of any applicable bankruptcy
      law to such Class A Noteholder (a "Preference Amount"), the Trust
      Collateral Agent shall make a claim within one (1) Business Day upon the
      Class A Note Insurance Policy for the full amount of such Preference
      Amount in accordance with the terms of the Class A Note Insurance Policy
      and shall notify Holders of the Class A Notes by mail that, in the event
      that any Class A Noteholder's payment is so recoverable, such Class A
      Noteholder will be entitled to payment pursuant to the terms of the Class
      A Note Insurance Policy. The Trust Collateral Agent shall furnish to the
      Class A Insurer at its written request the requested records it holds in
      its possession evidencing the payments of principal of and interest on the
      Class A Notes, if any, which have been made by the Trust Collateral Agent
      and subsequently recovered from any Class A Noteholders, and the dates on
      which such payments were made. The proceeds of any claim for a Preference
      Amount under the Class A Note Insurance Policy (the "Class A Insurer
      Preference Payment") shall be disbursed to the receiver or trustee in
      bankruptcy named in the final order of the court exercising jurisdiction
      on behalf of the Class A Noteholder and not to any Class A Noteholder
      directly unless such Class A Noteholder has returned principal or interest
      paid on the obligations to such receiver or trustee in bankruptcy, in
      which case such payment shall, upon proof reasonably satisfactory to the
      Class A Insurer, be disbursed to the Trust Collateral Agent for
      distribution to such Class A Noteholder.

                  (ii) Each Notice for Payment (as defined in the Class A Note
      Insurance Policy) shall provide that the Trust Collateral Agent, on its
      behalf and on behalf of the Class A Noteholders, thereby appoints the
      Class A Insurer as agent and attorney-in-fact for the Trust Collateral
      Agent and each Class A Noteholder in any legal proceeding with respect to
      the Class A Notes. The Trust Collateral Agent shall promptly notify the
      Class A Insurer and the Backup Insurer of any proceeding or the
      institution of any action (of

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<PAGE>

      which a Responsible Officer of the Trust Collateral Agent has actual
      knowledge) seeking the avoidance as a preferential transfer under
      applicable bankruptcy, insolvency, receivership, rehabilitation or similar
      law of any payment made with respect to the Class A Notes. Each Class A
      Noteholder, by its purchase of a Class A Note, and the Trust Collateral
      Agent hereby agree that, subject to Section 9.02(e) of this Agreement and
      Section 5.12 of the Indenture, so long as a Class A Insurer Default shall
      not have occurred and be continuing, the Controlling Party may at any time
      during the continuation of any proceeding relating to a Preference Amount
      direct all matters relating to such Preference Amount including, without
      limitation, (i) the direction of any appeal of any order relating to any
      Preference Amount and (ii) the posting of any surety, supersedeas or
      performance bond pending any such appeal at the expense of the Controlling
      Party, but subject to reimbursement as provided in the Insurance
      Agreement. In addition, and without limitation of the foregoing, as set
      forth in Section 5.17 of the Indenture, the Controlling Party shall be
      subrogated to, and each Class A Noteholder and the Trust Collateral Agent
      hereby delegate and assign, to the fullest extent permitted by law, the
      rights of the Trust Collateral Agent and each Class A Noteholder in the
      conduct of any proceeding with respect to a Preference Amount, including,
      without limitation, all rights of any party to an adversary proceeding
      action with respect to any court order issued in connection with any such
      Preference Amount.

            (d) The Trust Collateral Agent shall, and hereby agrees that it
will, hold the Class A Note Policy in trust and will hold any proceeds of any
claim thereunder in trust, solely for the benefit of and use of the Class A
Noteholders and the Backup Insurer.

            (e) The Trust Collateral Agent shall immediately notify the Backup
Insurer of the existence and the amount of any claim under the Class A Note
Insurance Policy pursuant to this Section 5.06.

            SECTION 5.07. Payments under the Backup Insurance Policy.

            (a) (i) If, by 5:00 p.m. New York City time on the second Business
      Day immediately prior to any Distribution Date with respect to the Class A
      Notes, the sum of (A) the Class A Interest Distributable Amount (exclusive
      of any default interest) and (B) any Principal Deficiency, exceeds the sum
      of: (w) Available Funds on deposit in the Collection Account and available
      for payment of the Class A Interest Distributable Amount and/or Principal
      Deficiency; (x) the amount on deposit in the Reserve Account on such
      Distribution Date and available for payment of the Class A Interest
      Distributable Amount and/or Principal Deficiency; (y) any Class A Insurer
      Interest Shortfall Payment paid in respect of the Class A Interest
      Distributable Amount; and (z) any Class A Insurer Principal Payment paid
      in respect of any Principal Deficiency, the Trust Collateral Agent shall,
      no later than 10:00 a.m. New York time on the Business Day immediately
      preceding such Distribution Date, make a claim under the Backup Insurance
      Policy in an amount equal to such excess, in accordance with the terms of
      the Backup Insurance Policy.

                                       58

<PAGE>

                (ii) If, by 5:00 p.m. New York City time on the second
      Business Day immediately prior to the Stated Final Maturity, the excess of
      (A) the original Class A Note Balance over (B) the aggregate amount of any
      payments previously made in respect of principal on the Class A Notes,
      exceeds the sum of (x) Available Funds remaining in the Collection Account
      and available for payment of the Class A Principal Distributable Amount
      hereof, (y) the amount available on the Stated Final Maturity in the
      Reserve Account and available for payment of the Class A Principal
      Distributable Amount and (z) any payments made by the Class A Insurer in
      respect of principal on the Stated Final Maturity under the Class A Note
      Insurance Policy, the Trust Collateral Agent shall, no later than 10:00
      a.m. New York time on the Business Day immediately preceding the Stated
      Final Maturity, make a claim under the Backup Insurance Policy in an
      amount equal to such excess, in accordance with the terms of the Backup
      Insurance Policy.

            (b) Proceeds of claims on the Backup Insurance Policy shall be
deposited in the Collection Account, shall remain uninvested and shall be used
solely to pay amounts due in respect of interest and principal on the Class A
Notes on each Distribution Date or the Stated Final Maturity, as applicable.

            (c) (i) On any day that a Responsible Officer of the Trust
      Collateral Agent has actual knowledge or receives written notice that any
      amount previously paid to a Class A Noteholder has been subsequently
      recovered from such Class A Noteholder pursuant to a final, non-appealable
      order of a court of competent jurisdiction that such payment constitutes
      an avoidable preference within the meaning of any applicable bankruptcy
      law to such Class A Noteholder, after giving effect to any Class A Insurer
      Preference Payments (a "Backup Insurer Preference Amount"), the Trust
      Collateral Agent shall make a claim within one (1) Business Day upon the
      Backup Insurance Policy for the full amount of such Backup Insurer
      Preference Amount in accordance with the terms of the Backup Insurance
      Policy and shall notify the Class A Noteholders by mail that, in the event
      that any Class A Noteholder's payment is so recoverable, such Class A
      Noteholder will be entitled to payment pursuant to the terms of the Backup
      Insurance Policy. The Trust Collateral Agent shall furnish to the Backup
      Insurer at its written request the requested records it holds in its
      possession evidencing the payments of principal of and interest on the
      Class A Notes, if any, which have been made by the Trust Collateral Agent
      and subsequently recovered from any Class A Noteholders, and the dates on
      which such payments were made. The proceeds of any claim for a Backup
      Insurer Preference Amount under the Backup Insurance Policy shall be
      disbursed to the receiver or trustee in bankruptcy named in the final
      order of the court exercising jurisdiction on behalf of the Class A
      Noteholder and not to any Class A Noteholder directly unless such Class A
      Noteholder has returned principal or interest paid on the obligations to
      such receiver or trustee in bankruptcy, in which case such payment shall,
      upon proof reasonably satisfactory to the Backup Insurer, be disbursed to
      the Trust Collateral Agent for distribution to such Class A Noteholder.

                  (ii) Each Notice for Payment (as defined in the Backup
      Insurance Policy) shall provide that the Trust Collateral Agent, on its
      behalf and on behalf of the Class A Noteholders, thereby appoints the
      Backup Insurer as agent and attorney-in-fact for the Trust Collateral
      Agent and each Class A Noteholder in any legal proceeding with

                                       59
<PAGE>

      respect to the Class A Notes. Each Class A Noteholder, by its purchase of
      a Class A Note, and the Trust Collateral Agent hereby agree that, subject
      to Section 9.02(e) of this Agreement and Section 5.12 of the Indenture, so
      long as a Backup Insurer Default shall not have occurred and be
      continuing, the Backup Insurer may at any time during the continuation of
      any proceeding relating to a Backup Insurer Preference Amount direct all
      matters relating to such Backup Insurer Preference Amount including,
      without limitation, (i) the direction of any appeal of any order relating
      to any Backup Insurer Preference Amount and (ii) the posting of any
      surety, supersedeas or performance bond pending any such appeal at the
      expense of the Backup Insurer, but subject to reimbursement as provided in
      the Insurance Agreement. In addition, and without limitation of the
      foregoing, as set forth in Section 5.17 of the Indenture, the Backup
      Insurer shall be subrogated to, and each Class A Noteholder and the Trust
      Collateral Agent hereby delegate and assign, to the fullest extent
      permitted by law, the rights of the Trust Collateral Agent and each Class
      A Noteholder in the conduct of any proceeding with respect to a Backup
      Insurer Preference Amount, including, without limitation, all rights of
      any party to an adversary proceeding action with respect to any court
      order issued in connection with any such Backup Insurer Preference Amount.

            (d) The Trust Collateral Agent shall, and hereby agrees that it
will, hold the Backup Insurance Policy in trust and will hold any proceeds of
any claim thereunder in trust, solely for the benefit of and use of the Class A
Noteholders.

            SECTION 5.08. Transfers and Distributions.

            (a) Unless the Class A Notes have been accelerated in accordance
with the terms of the Indenture, on each Distribution Date, after making any
transfers and distributions required by Sections 5.02, 5.03, 5.04, 5.05(b),
5.06(b) and 5.07(b) hereof, the Trust Collateral Agent shall (based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date) cause to be made the following transfers and distributions
for such Distribution Date from Available Funds and amounts deposited to the
Collection Account from the Reserve Account (such amounts from the Reserve
Account to be applied in accordance with Section 5.05(b)), in the following
order of priority:

                  (i) pro rata: (A) (i) to the Servicer, the Servicing Fee and
      any Servicing Fee unpaid from any prior Distribution Date, or (ii) if the
      Servicer has been replaced pursuant to the terms of this Agreement, to the
      Backup Servicer, the Servicing Fee and any Servicing Fee unpaid from any
      prior Distribution Date up to the Capped Servicing Fee; and (B) to the
      Backup Servicer: (i) any Transition Expenses and (ii) any accrued and
      unpaid indemnification amounts owed to it up to $17,000; and (C) pro rata,
      to the Backup Servicer, so long as it has not become the Servicer, any
      accrued and unpaid Backup Servicing Fees, and to the Owner Trustee, the
      Indenture Trustee and the Trust Collateral Agent, pro rata, their related
      accrued and unpaid fees, indemnification amounts and expenses, up to the
      Capped Backup Servicer and Trustee Fees and Expenses;

                  (ii) to the Class A Note Distribution Account, the Class A
      Interest Distributable Amount due and payable on such Distribution Date
      and the Class A Interest

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<PAGE>

      Carryover Shortfall, if any, from any prior Distribution Date, for
      distribution to the Class A Noteholders;

                  (iii) to any successor Servicer, an amount equal to the
      Reliening Expenses;

                  (iv) to each Insurer, in accordance with the terms of the
      Insurance Agreement and so long as no Insurer Default related to such
      Insurer's failure to pay any amount due in accordance with the terms of
      the note insurance policy issued by it has occurred and is continuing: (A)
      its respective Insurance Premium, including any past due Insurance
      Premium; (B) its respective expenses; and (C) its respective Reimbursement
      Obligations owed in respect of any draws on the Class A Note Insurance
      Policy or the Backup Insurance Policy, as the case may be, for the payment
      of the Class A Interest Distributable Amount;

                  (v) to the Reserve Account, an amount equal to the amount
      necessary to cause the amount on deposit in the Reserve Account to equal
      the Reserve Account Requirement for such Distribution Date;

                  (vi) during the Revolving Period, to the Principal Collection
      Account: (i) for application by the Issuer to purchase additional Dealer
      Loans from the Seller, the amount needed to cause the Collateral Amount to
      equal the Minimum Collateral Amount, and if the Minimum Collateral Account
      cannot be reached due to an insufficient amount of Dealer Loans for
      purchase by the Issuer, the amount needed to cause the Adjusted Collateral
      Amount to equal the Minimum Collateral Amount; and (ii) the amount needed
      to cure any Principal Deficiency;

                  (vii) during the Amortization Period, to the Class A Note
      Distribution Account, the Class A Principal Distributable Amount for
      distribution to the Class A Noteholders, until the Class A Note Balance
      has been reduced to zero;

                  (viii) to each Insurer, in accordance with the terms of the
      Insurance Agreement, its respective Reimbursement Obligations and any
      other amounts owed to it, to the extent not paid pursuant to clause (iv);

                  (ix) pro rata, (A) to the Backup Servicer, any Servicing Fee
      or indemnification amounts owed to it to the extent not paid pursuant to
      clause (i), and (B) pro rata, to the Owner Trustee, the Indenture Trustee
      and the Trust Collateral Agent, any accrued fees, indemnification amounts
      or expenses, to the extent not paid pursuant to clause (i); and

                  (x) following the payment in full of all distributable amounts
      and after making all allocations set forth in clauses (i) through (ix)
      above, to the Indenture Trustee for deposit in the Certificate
      Distribution Account any remaining Available Funds in the Collection
      Account for distribution to the Certificateholder pursuant to Section 5.10
      hereof.

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<PAGE>

            (b) In the event that the Collection Account is maintained with an
institution other than the Trust Collateral Agent, the Servicer shall instruct
the Trust Collateral Agent to instruct and cause such institution to make all
transfers, deposits and distributions pursuant to Section 5.08(a) hereof on the
related Distribution Date.

            (c) Notwithstanding the foregoing, all transfers of funds between
accounts may occur on the Business Day immediately preceding the Distribution
Date related to such transfer; all distributions from accounts shall occur on
the Distribution Date.

            SECTION 5.09. Distributions from the Class A Note Distribution
Account.

            (a) Subject to Section 5.12 hereof, on each Distribution Date, after
making all transfers and distributions required to be made on such Distribution
Date by Sections 5.05 and 5.08 hereof, the Trust Collateral Agent shall (based
on the information contained in the Servicer's Certificate delivered on the
related Determination Date) distribute all amounts on deposit in the Class A
Note Distribution Account to Noteholders in respect of the Class A Notes in the
following amounts and in the following order of priority:

                  (i) to the Class A Noteholders the sum of (x) the Class A
      Interest Distributable Amount for such Distribution Date and (y) the Class
      A Interest Carryover Shortfall, if any, for such Distribution Date; and

                  (ii) after the application of clause (i) above and until the
      outstanding principal balance of the Class A Notes is reduced to zero, to
      the Holders of the Class A Notes, the Class A Principal Distributable
      Amount for such Distribution Date.

            (b) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Class A Noteholder, such withholding tax
shall reduce the amount otherwise distributable to the Class A Noteholder in
accordance with this Section 5.09. The Trust Collateral Agent is hereby
authorized and directed to retain from amounts otherwise distributable to the
Class A Noteholders sufficient funds for the payment of any withholding tax that
is legally owed by the Trust as instructed by the Servicer, in writing in a
Servicer's Certificate (but such authorization shall not prevent the Trust
Collateral Agent from contesting at the expense of the Seller any such
withholding tax in appropriate proceedings, and withholding payment of
withholding such tax, if permitted by law, pending the outcome of such
proceedings). The amount of any withholding tax imposed with respect to a Class
A Noteholder shall be treated as cash distributed to such Class A Noteholder at
the time it is withheld by the Trust and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-US Noteholder), the
Trust Collateral Agent may withhold such amounts in accordance with this clause
(b). In the event that a Class A Noteholder wishes to apply for a refund of any
such withholding tax, the Trust Collateral Agent shall reasonably cooperate with
such Class A Noteholder in making such claim so long as such Class A Noteholder
agrees to reimburse the Trust Collateral Agent for any out-of-pocket expenses
incurred. Neither the Class A Note Insurance Policy nor the Backup Insurance
Policy shall cover any shortfalls relating to withholding taxes.

                                       62
<PAGE>

            (c) Distributions required to be made to Noteholders on any
Distribution Date shall be made to each Class A Noteholder of record on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if (i) such Class A Noteholder shall have provided to the
Class A Note Registrar appropriate written instructions at least ten Business
Days prior to such Distribution Date and such Holder's Certificates in the
aggregate evidence a Certificate Interest of at least 10% of the Original
Certificate Interest or (ii) such Class A Noteholder is the Seller, or an
Affiliate thereof, or, if not, by check mailed to such Class A Noteholder at the
address of such holder appearing in the Class A Note Register. Notwithstanding
the foregoing, the final distribution in respect of any Class A Note (whether on
the Stated Final Maturity or otherwise) will be payable only upon presentation
and surrender of such Class A Note at the office or agency maintained for that
purpose by the Note Registrar pursuant to Section 2.7 of the Indenture.

            SECTION 5.10. Certificate Distribution Account.

            (a) On each Distribution Date, the Trust Collateral Agent shall
(based on the information contained in the Servicer's Certificate delivered on
the related Determination Date) distribute all amounts on deposit in the
Certificate Distribution Account to the Certificateholders.

            (b) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section. The Trust Collateral Agent is hereby authorized and directed to
retain from amounts otherwise distributable to the Certificateholders sufficient
funds for the payment of any tax that is legally owed by the Trust as instructed
in writing by the Servicer (but such authorization shall not prevent the Trust
Collateral Agent from contesting, at the expense of the Seller, any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The amount of any withholding tax
imposed with respect to a Certificateholder shall be treated as cash distributed
to such Certificateholder at the time it is withheld by the Trust and remitted
to the appropriate taxing authority. If there is a possibility that withholding
tax is payable with respect to a distribution (such as a distribution to a
non-US Certificateholder), the Trust Collateral Agent may withhold such amounts
in accordance with this clause (b). In the event that a Holder wishes to apply
for a refund of any such withholding tax, the Trust Collateral Agent shall
reasonably cooperate with such Certificateholder in making such claim so long as
such Certificateholder agrees to reimburse the Trust Collateral Agent for any
out-of-pocket expenses incurred.

            (c) Distributions required to be made to Certificateholders on any
Distribution Date shall be made to each Certificateholder of record on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if (i) such Certificateholder shall have provided to the
Certificate Registrar appropriate written instructions at least ten Business
Days prior to such Distribution Date and such Holder's Certificates in the
aggregate evidence a denomination of not less than $500,000 or (ii) such
Certificateholder is the Seller, or an Affiliate thereof, or, if not, by check
mailed to such Certificateholder at the address of such holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution in
respect of any Certificate

                                       63
<PAGE>

(whether on the Stated Final Maturity or otherwise) will be payable only upon
presentation and surrender of such Certificate at the office or agency
maintained for that purpose by the Certificate Registrar pursuant to Section 3.4
of the Trust Agreement.

            (d) Notwithstanding the foregoing, all transfers of funds between
accounts may occur on the Business Day immediately preceding the Distribution
Date related to such transfer; all distributions from accounts shall occur on
the Distribution Date.

            SECTION 5.11. Statements to Certificateholders and Noteholders.

On or prior to each Distribution Date, the Servicer (provided, that in the event
the Backup Servicer is acting as successor Servicer, the Seller shall assist the
Backup Servicer in the performance of its obligations under this Section 5.11)
shall provide to the Trust Collateral Agent the Servicer's Certificate (with
copies to the Rating Agencies). The Trust Collateral Agent will be required to
make the Servicer's Certificate related to such Distribution Date available to
the Class A Insurer, the Backup Insurer, the Class A Noteholders, the
Certificateholder, the Initial Purchaser and Bloomberg, L.P. (at 499 Park
Avenue, New York, New York 10022, Attention: Credit Acceptance 2004-1). Each
Servicer's Certificate will include, among other things, the following
information with respect to the Class A Notes with respect to the related
Distribution Date, or the period since the previous Distribution Date, as
applicable.

                  (i) the amount of the related distribution allocable to
      principal;

                  (ii) the amount of the related distribution allocable to
      interest;

                  (iii) the amount of the related distribution payable out of
      the Reserve Account;

                  (iv) the Aggregate Outstanding Net Eligible Loan Balance, the
      Aggregate Outstanding Eligible Loan Balance and the aggregate Outstanding
      Balance of all Eligible Contracts as of the close of business on the last
      day of the preceding Collection Period;

                  (v) the Class A Note Balance and the pool factor (as of the
      close of business on a Distribution Date, a seven-digit decimal figure
      equal to the outstanding principal amount of the Class A Notes divided by
      the initial Class A Note Balance, after giving effect to payments
      allocated to principal reported under (i) above;

                  (vi) the amount of the Servicing Fee paid to the Servicer with
      respect to the related Collection Period and/or due but unpaid with
      respect to such Collection Period or prior Collection Periods, as the case
      may be;

                  (vii) the Class A Interest Carryover Shortfall, if any;

                  (viii) the total amount of Collections for the related
      Collection Period; and

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<PAGE>

                  (ix) the aggregate Purchase Amount for the Ineligible Loans
      and Ineligible Contracts, if any, that was paid in such period.

Each amount set forth pursuant to paragraph (i), (ii), (iii), (vi) and (vii)
above shall be expressed as a dollar amount per $1,000 of the initial note
principal balance or the Original Certificate Balance, as applicable.

            The Trust Collateral Agent shall make such information and certain
other documents, reports, and Dealer Loan and Contract information provided by
the Servicer's Certificate available to each Class A Noteholder, the Class A
Insurer and the Backup Insurer, via the Trust Collateral Agent's Internet
Website, with the use of a password provided by the Trust Collateral Agent or
its agent to such Person upon receipt by the Trust Collateral Agent from such
Person of a certification in the form of Exhibit C; provided, however, that the
Trust Collateral Agent or its agent shall provide such password to the parties
to this Agreement and the Rating Agencies without requiring such certification.
The Trust Collateral Agent will make no representation or warranties as to the
accuracy or completeness of such documents and will assume no responsibility
therefor.

            The Trust Collateral Agent's Internet Website shall be initially
located at www.jpmorgan.com/sfr (Help Desk phone no. 1-212-623-5600) or at such
other address as shall be specified by the Trust Collateral Agent from time to
time in writing to each of the parties hereto and to each Class A Noteholder. In
connection with providing access to the Trust Collateral Agent's Internet
Website, the Trust Collateral Agent may require registration and the acceptance
of a disclaimer. The Trust Collateral Agent shall not be liable for the
dissemination of information received and distributed in accordance with this
Agreement.

                                   ARTICLE VI

                            THE SELLER AND THE ISSUER

            SECTION 6.01. Representations and Warranties of the Seller.

The Seller makes the following representations on which the Trust, the Indenture
Trustee and the Trust Collateral Agent relied in accepting the Trust Property in
trust and in connection with the performance by the Trust Collateral Agent and
the Backup Server of its obligations hereunder, the Class A Insurer relied in
issuing the Class A Note Insurance Policy and the Backup Insurer relied in
issuing the Backup Insurance Policy. The representations speak as of the
execution and delivery of this Agreement on the Closing Date but shall survive
the sale of the Contracts to the Trust:

                  (i) Organization and Good Standing. The Seller is duly
      organized and validly existing as a limited liability company in good
      standing under the laws of the State of Delaware, with power and authority
      to own its properties and to conduct its business as such properties are
      currently owned and such business is presently conducted, and has and had
      at all relevant times, full power, authority, and legal right to acquire
      and own the Dealer Loans and the related Contracts.

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<PAGE>

                  (ii) Due Qualification. The Seller is duly qualified to do
      business as a foreign limited liability company in good standing, and has
      obtained all necessary licenses and approvals in all jurisdictions in
      which the ownership or lease of property or the conduct of its business
      requires such qualifications.

                  (iii) Power and Authority. The Seller has the power and
      authority to execute and deliver this Agreement and the other Basic
      Documents to which it is a party and to carry out their respective terms.
      The Seller has full power and authority to sell and assign the property to
      be sold and assigned to and deposited with the Trust and has duly
      authorized such sale and assignment to the Trust by all necessary action;
      and the execution, delivery, and performance of this Agreement and the
      other Basic Documents to which it is a party have been duly authorized by
      the Seller by all necessary action and do not require any additional
      approvals or consents or other action by or any notice to or any filing
      with, any Person.

                  (iv) Valid Sale; Binding Obligations. This Agreement evidences
      a valid sale, transfer, and assignment of the Trust Property enforceable
      against creditors of and purchasers from the Seller; and a legal, valid
      and binding obligation of the Seller enforceable in accordance with its
      terms, subject to the effects of bankruptcy, insolvency, reorganization,
      or other similar laws affecting the enforcement of creditors' rights
      generally and to general principles of equity.

                  (v) No Violation. The consummation of the transactions
      contemplated by this Agreement and the other Basic Documents to which it
      is a party and the fulfillment of the terms hereof and thereof does not
      conflict with, result in any breach of any of the terms and provisions of,
      or constitute (with or without notice or lapse of time) a default under,
      the Certificate of Formation, limited liability company agreement of the
      Seller, or any indenture, agreement, or other instrument to which the
      Seller is a party or by which it is bound; nor result in the creation or
      imposition of any Lien upon any of its properties pursuant to the terms of
      any such indenture, agreement, or other instrument; or violate any law or,
      to the best of the Seller's knowledge, any order, rule, or regulation
      applicable to the Seller of any court or of any federal or state
      regulatory body, administrative agency, or other governmental
      instrumentality having jurisdiction over the Seller or its properties.

                  (vi) No Proceedings. There are no proceedings or
      investigations pending, or to the Seller's best knowledge threatened,
      before any court, regulatory body, administrative agency, or other
      governmental instrumentality having jurisdiction over the Seller or its
      properties: (A) asserting the invalidity of this Agreement, any other
      Basic Document to which it is a party or the Class A Notes; (B) seeking to
      prevent the issuance of the Class A Notes or the consummation of any of
      the transactions contemplated by this Agreement or, any other Basic
      Document to which it is a party; (C) seeking any determination or ruling
      that might materially and adversely affect the performance by the Seller
      of its obligations under, or the validity or enforceability of, this
      Agreement, any other Basic Document to which it is a party or the Class A
      Notes; or (D) relating to the Seller and which might adversely affect the
      federal income tax attributes of the Class A Notes.

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                  (vii) Principal Place of Business; Jurisdiction of
      Organization. The principal place of business of the Seller is located in
      Michigan. The Seller is organized under the laws of Delaware as a limited
      liability company, and is not organized under the laws of any other
      jurisdiction. "Credit Acceptance Funding LLC 2004-1" is the correct legal
      name of the Seller indicated on the public records of the Seller's
      jurisdiction of organization which shows it to be organized.

                  (viii) [Reserved.]

                  (ix) Certificates, Statements and Reports. The officers'
      certificates, statements, reports and other documents prepared by the
      Seller and furnished by the Seller to the Issuer, the Indenture Trustee,
      the Class A Insurer or the Backup Insurer pursuant to this Agreement or
      any other Basic Document to which the Seller is a party, and in connection
      with the transactions contemplated hereby or thereby, when taken as a
      whole, do not contain any untrue statement of a material fact or omit to
      state a material fact necessary to make the statements contained hereon or
      therein not misleading.

                  (x) Accuracy of Information. All information heretofore
      furnished by the Seller to the Trust or its successors and assigns or to
      the Class A Insurer or the Backup Insurer pursuant to or in connection
      with any Basic Document or any transaction contemplated thereby is, and
      all such information hereafter furnished by the Seller will be, true and
      accurate in every material respect on the date such information is stated
      or certified and does not contain an material misstatement of fact or omit
      to state a material fact or any fact necessary to make the statements
      contained therein not misleading.

                  (xi) Ownership of Seller. Credit Acceptance is the sole owner
      of the membership interests of the Seller, all of which are fully paid and
      nonassessable and owned of record, free and clear of all mortgages,
      assignments, pledges, security interests, warrants, options and rights to
      purchase, except for the lien thereon in favor of Comerica Bank, a
      collateral agent under the Comerica Credit Agreement.

                  (xii) Use of Proceeds. No proceeds of any sale of Seller
      Property will be used (i) for a purpose that violates, or would be
      inconsistent with, Regulation T, U or X promulgated by the Board of
      Governors of the Federal Reserve System from time to time or (ii) to
      acquire any security in any transaction which is subject to Section 12, 13
      or 14 of the Securities Exchange Act of 1934, as amended.

                  (xiii) Taxes. The Seller has filed on or before their
      respective due dates, all tax returns which are required to be filed in
      any jurisdiction or has obtained extensions for filing such tax returns
      and has paid all taxes, assessments, fees and other governmental charges
      against the Seller or any of its properties, income or franchises, to the
      extent that such taxes have become due, other than any taxes or
      assessments, the validity of which are being contested in good faith by
      appropriate proceedings and with respect to which adequate provision has
      been made on the books of the Seller as may be required by GAAP. To the
      best of the knowledge of the Seller, all such tax returns were true and
      correct in all material respects and the Seller knows of any proposed
      material additional tax assessment against it nor any basis therefor. Any
      taxes, assessments, fees

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      and other governmental charges payable by the Seller in connection with
      the execution and delivery of the Basic Documents and the issuance of the
      Class A Notes have been paid or shall have been paid at or prior to
      Closing Date.

                  (xiv) Consolidated Returns. The Originator, the Seller and the
      Issuer will file a consolidated federal income tax return at all times
      until the termination of the Basic Documents.

                  (xv) ERISA. The Seller is in compliance in all material
      respects with ERISA.

                  (xvi) Compliance with Laws. The Seller has complied in all
      material respects with all applicable, laws, rules, regulations, orders,
      writs, judgments, injunctions, decrees or awards to which it may be
      subject.

                  (xvii) Material Adverse Change. Since the date of its
      formation, no event has occurred that would have a material adverse effect
      on (i) the financial condition or operations of the Seller, (ii) the
      ability of the Seller to perform its obligations under the Basic
      Documents, or (iii) the collectibility of the Dealer Loans generally or
      any material portion of the Dealer Loans.

                  (xviii) Special Purpose Entity.

                  (A) The capital of the Seller is adequate for the business and
      undertakings of the Seller.

                  (B) Other than as provided in the Basic Documents, the Seller
      is not engaged in any business transactions with Credit Acceptance.

                  (C) Other than in connection with the Basic Documents, the
      Seller has not incurred any indebtedness or assumed or guarantied any
      indebtedness of any other entity.

                  (D) At least two directors of the board of directors of the
      Seller shall be persons who are not, and will not be, a director, officer,
      employee or holder of any equity securities of Credit Acceptance or any of
      its Affiliates or Subsidiaries.

                  (E) Once identified as Seller funds and assets by the Servicer
      and separated in accordance with the Servicer's normal and customary
      business practices, the funds and assets of the Seller are not, and will
      not be, commingled with the funds of any other Person, except for Dealer
      Collections and erroneous deposits.

                  (F) The limited liability company agreement of the Seller
      requires it to maintain (A) correct and complete minute books and records
      of account, and (B) minutes of the meetings and other proceedings of its
      shareholders and board of directors.

                  (xix) Solvency; Fraudulent Conveyance. The Seller is solvent,
      is able to pay its debts as they become due and will not be rendered
      insolvent by the transactions

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<PAGE>

      contemplated by the Basic Documents and, after giving effect thereto, will
      not be left with an unreasonably small amount of capital with which to
      engage in its business. The Seller does not intend to incur, or believes
      that it has incurred, debts beyond its ability to pay such debts as they
      mature. The Seller does not contemplate the commencement of insolvency,
      bankruptcy, liquidation or consolidation proceedings or the appointment of
      a receiver, liquidator, conservator, trustee or similar official or any of
      its assets. The amount of consideration being received by the Seller upon
      the sale of the Seller Property to the Trust constitutes reasonably
      equivalent value and fair consideration for the Seller Property. The
      Seller is not selling the Seller Property to the Trust, as provided in the
      Basic Documents, with any intent to hinder, deal or defraud any of Credit
      Acceptance's creditors.

                  (xx) Payment to Originator. The Seller has given reasonably
      equivalent value and fair consideration for the Contributed Property
      conveyed to the Seller under the Contribution Agreement and such transfer
      was not made for or on account of an antecedent debt. No transfer by the
      Originator of any originator property under the Contribution Agreement is
      or may be voidable under any section of the Bankruptcy Code.

            SECTION 6.02. Limitation on Liability of Seller and Others.

Neither the Seller nor any of the directors or officers or employees or agents
of the Seller shall be under any liability to the Trust, the Trust Collateral
Agent or the Class A Noteholders or the Certificateholders, except as provided
under this Agreement for any action taken or omitted to be taken pursuant to
this Agreement; provided, however, that this provision shall not protect the
Seller against any liability that would otherwise be imposed by reason of
willful misconduct or negligence in the performance of their respective duties
under this Agreement. Each of the Seller and any director or officer or employee
or agent of the Seller may rely in good faith on the advice of counsel, Opinion
of Counsel, Officer's Certificate, or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute,
or defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Seller may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement and
the rights and duties of the parties to this Agreement and the interests of the
Class A Noteholders and the Certificateholders under this Agreement. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs, and liabilities of the Seller.

            SECTION 6.03. Seller May Own Notes.

The Seller and any Person controlling, controlled by, or under common control
with the Seller may in their individual or any other capacities become the owner
or pledgee of the Class A Notes with the same rights as it would have if it were
not the Seller or an affiliate thereof, except as otherwise provided in the
definition of "Noteholder" specified in Section 1.01 and except as otherwise
specifically provided herein. The Class A Notes so owned by or pledged to the
Seller or such controlling, controlled or commonly controlled Person shall have
an equal and

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proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Class A Notes.

         SECTION 6.04. Additional Covenants of the Seller.

The Seller shall not do any of the following, without: (i) the prior written
consent of the Controlling Party; and (ii) the prior written consent of the
Trust Collateral Agent, who shall, without any exercise of its own discretion,
also provide its written consent to the Seller upon receipt by it of a copy of
the written consent of the Controlling Party:

            (i)   engage in any business or activity other than those set forth
      in the Certificate of Formation or limited liability company agreement of
      the Seller or amend the Seller's Certificate of Formation or limited
      liability company agreement other than in accordance with its terms as in
      effect on the date hereof;

            (ii)  incur any indebtedness, or assume or guaranty any indebtedness
      of any other entity, other than (A) any indebtedness incurred in
      connection with the Class A Notes, and (B) any indebtedness to Credit
      Acceptance incurred in connection with the acquisition of the Dealer
      Loans, which indebtedness shall be subordinated to all other obligations
      of the Seller and Credit Acceptance; or

            (iii) dissolve or liquidate, in whole or in part; consolidate or
      merge with or into any other entity or convey or transfer its properties
      and assets substantially as an entirety to any entity.

         SECTION 6.05. Indemnities of the Issuer.

The Issuer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Issuer under this Agreement and the
other Basic Documents to which it is a party and no implied duties or
obligations shall be read into this Agreement against the Issuer.

            (i)   The Issuer shall defend, indemnify, and hold harmless the
      Trust Collateral Agent, the Servicer, the Backup Servicer, the Indenture
      Trustee, the Class A Insurer, the Backup Insurer and the Owner Trustee and
      their respective officers, directors, employees and agents, and the Trust
      from and against any and all costs, expenses, losses, damages, claims, and
      liabilities, arising out of or resulting from the use, ownership, or
      operation by the Issuer or any Affiliate thereof of a Financed Vehicle.

            (ii)  The Issuer shall indemnify, defend, and hold harmless the
      Trust Collateral Agent, the Indenture Trustee, the Owner Trustee, the
      Servicer, the Backup Servicer, the Class A Insurer, the Backup Insurer and
      their respective officers, directors, employees and agents, and the Trust
      from and against any taxes that may at any time be asserted against them
      with respect to the transactions contemplated herein, including, without
      limitation, any sales, gross receipts, general corporation, tangible
      personal property, privilege, or license taxes (but, in the case of the
      Trust, not including any taxes asserted with respect to, and as of the
      date of, the sale of the Dealer Loans to the Trust or the issuance and
      original sale of the Class A Notes, or asserted with respect to ownership

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<PAGE>

      of the Dealer Loans, or federal or other income taxes arising out of the
      transactions contemplated by this Agreement) and costs and expenses in
      defending against the same.

            (iii) The Issuer shall indemnify, defend, and hold harmless the
      Trust, the Servicer, the Backup Servicer, the Trust Collateral Agent, the
      Owner Trustee, the Indenture Trustee, the Class A Insurer, the Backup
      Insurer and each of their respective officers, directors, employees and
      agents, and the Class A Noteholders from and against any and all costs,
      expenses, losses, claims, damages, and liabilities to the extent that such
      cost, expense, loss, claim, damage, or liability arose out of, or was
      imposed upon such party through the breach by the Issuer of its
      obligations under this Agreement or any other Basic Document to which it
      is a party, the negligence, willful misconduct or bad faith of the Issuer
      in the performance of its duties under this Agreement or any other Basic
      Document to which it is a party.

            (iv)  The Issuer shall indemnify, defend, and hold harmless the
      Trust Collateral Agent, the Trust Collateral Agent, the Indenture Trustee,
      the Owner Trustee, the Class A Insurer, the Backup Insurer, the Servicer,
      the Backup Servicer and each of their respective officers, directors,
      employees and agents from and against all costs, expenses, losses, claims,
      damages, and liabilities arising out of or incurred in connection with the
      acceptance or performance of the trusts and duties herein contained,
      except, with respect to any such indemnified party, to the extent that
      such cost, expense, loss, claim, damage, or liability: (a) shall be due to
      the willful misconduct, bad faith, or negligence (or in the case of the
      Owner Trustee, gross negligence) of such indemnified party; (b) shall
      arise from such indemnified party's breach of any of its representations
      or warranties in any material respect set forth in the Indenture; or (c)
      as to the Trust Collateral Agent, shall arise out of or be incurred in
      connection with the performance by the Trust Collateral Agent of the
      duties of successor Servicer hereunder.

            (v)   The Issuer shall indemnify, defend, and hold harmless, the
      Indenture Trustee, the Owner Trustee, the Class A Insurer, the Backup
      Insurer and each of their officers, directors, employees and agents from
      and against all costs, expenses, losses, claims, damages, and liabilities
      arising out of or incurred in connection with the acceptance or
      performance of the trusts and duties contained in the Trust Agreement,
      except, as to any such party, to the extent that such cost, expense, loss,
      claim, damage, or liability: (a) shall be due to the willful misconduct,
      bad faith or negligence (or in the case of the Owner Trustee, gross
      negligence) of such party; or (b) shall arise from such breach of any of
      its representations or warranties set forth in the Trust Agreement.

      Indemnification under this Section by the Issuer shall survive the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Issuer shall have made any indemnity
payments pursuant to this Section and the recipient thereafter collects any of
such amounts from others, the recipient shall promptly repay such amounts to the
Issuer, without interest. Amounts payable by the Issuer pursuant to this Section
6.05 shall only be payable: (i) in accordance with and only to the extent funds
are available therefor pursuant to Section 5.08(a) hereof; or (ii) to the extent
the Issuer receives additional funds designated for such purpose. No amount
owing by the Issuer under this Section 6.05 shall

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<PAGE>

constitute a claim (as defined in Section 101(5) of the Bankruptcy Code) against
the Issuer and recourse to it.

                                   ARTICLE VII

                                  THE SERVICER

         SECTION 7.01. Representations of Servicer.

Credit Acceptance makes the following representations on which the Trust, the
Indenture Trustee and the Trust Collateral Agent relies in accepting the Trust
Property in trust and in connection with the performance by the Trust Collateral
Agent of its obligations hereunder, the Class A Insurer relies in issuing the
Class A Note Insurance Policy and the Backup Insurer relies in issuing the
Backup Insurance Policy. The representations speak as of the execution and
delivery of this Agreement on the Closing Date but shall survive the sale of the
Dealer Loans to the Trust:

            (i)   Organization and Good Standing. The Servicer is duly organized
      and is validly existing as a corporation in good standing under the laws
      of the State of Michigan, with power and authority to own its properties
      and to conduct its business as such properties are currently owned and
      such business is presently conducted, and has and had at all relevant
      times, full power, authority, and legal right to acquire, own, sell, and
      service the Dealer Loans and the related Contracts and to perform its
      other obligations under the Basic Documents.

            (ii)  Due Qualification. The Servicer is duly qualified to do
      business as a foreign corporation in good standing, and has obtained all
      necessary licenses and approvals in all jurisdictions in which the
      ownership or lease of property or the conduct of its business including
      the servicing of the Dealer Loans and the related Contracts as required by
      this Agreement requires such qualifications except where such failure will
      not have a material adverse effect.

            (iii) Power and Authority. The Servicer has the power and authority
      to execute and deliver this Agreement and the other Basic Documents to
      which it is a party and to carry out their respective terms; and the
      execution, delivery, and performance of this Agreement and the other Basic
      Documents to which it is a party have been duly authorized by the Servicer
      by all necessary corporate action.

            (iv)  Binding Obligations. This Agreement and the other Basic
      Documents to which it is a party constitute legal, valid, and binding
      obligations of the Servicer enforceable in accordance with their
      respective terms, subject to the effects of bankruptcy, insolvency,
      reorganization, or other similar laws affecting the enforcement of
      creditors' rights generally and to general principles of equity.

            (v)   No Violation. The consummation of the transactions
      contemplated by this Agreement and the other Basic Documents to which it
      is a party and the fulfillment of the terms hereof and thereof do not
      conflict with, result in any breach of any of the terms and provisions of,
      nor constitute (with or without notice or lapse of time) a default under,
      the Certificate of Incorporation or bylaws of the Servicer, or any

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<PAGE>

      indenture, agreement, or other instrument to which the Servicer is a party
      or by which it may be bound; nor result in the creation or imposition of
      any Lien upon any of its properties pursuant to the terms of any such
      indenture, agreement, or other instrument (other than this Agreement);
      nor, to the best of the Servicer's knowledge, violate any law applicable
      to the Servicer or any order, rule, or regulation applicable to the
      Servicer of any court or of any federal or state regulatory body,
      administrative agency, or other governmental instrumentality having
      jurisdiction over the Servicer or its properties or in any way materially
      adversely affect the interest of the Class A Noteholders, the Class A
      Insurer, the Backup Insurer, the Trust, the Trust Collateral Agent or the
      Indenture Trustee in any of the Trust Property or adversely affect the
      Servicer's ability to perform its obligations under this Agreement or any
      other Basic Document to which it is a party.

            (vi)  No Proceedings. There are no proceedings or investigations
      pending, or, to the Servicer's best knowledge, threatened, before any
      court, regulatory body, administrative agency, or other governmental
      instrumentality having jurisdiction over the Servicer or its properties:
      (A) asserting the invalidity of this Agreement, any of the Basic Documents
      to which it is a party or the Class A Notes, (B) seeking to prevent the
      issuance of the Class A Notes or the consummation of any of the
      transactions contemplated by this Agreement or any of the Basic Documents
      to which it is a party, (C) seeking any determination or ruling that might
      materially and adversely affect the performance by the Servicer of its
      obligations under, or the validity or enforceability of, this Agreement,
      any of the Basic Documents to which it is a party or the Class A Notes, or
      D) relating to the Servicer and which might adversely affect the federal
      income tax attributes of the Class A Notes.

            (vii) No Consents. The Servicer is not required to obtain the
      consent of any other party or any consent, license, approval or
      authorization, or registration or declaration with, any governmental
      authority, bureau or agency in connection with the execution, delivery,
      performance, validity or enforceability of this Agreement or the other
      Basic Documents to which it is a party.

            (viii) Approvals. The Servicer: (i) is not in violation of any laws,
      ordinances, governmental rules or regulations to which it is subject,
      which violation materially and adversely affects the business or condition
      (financial or otherwise) of the Servicer and its subsidiaries, the
      Servicer's ability to perform its obligations hereunder or under any other
      Basic Document or any of the Trust Property; (ii) has not failed to obtain
      any licenses, permits, franchises or other governmental authorizations
      necessary to the ownership of its property or to the conduct of its
      business which failure to obtain will materially and adversely affect the
      business or condition (financial or otherwise) of the Servicer and its
      subsidiaries, the Servicer's ability to perform its obligations hereunder
      or under any other Basic Document or any of the Trust Property; and (iii)
      is not in violation of any term of any agreement, charter instrument,
      bylaw or instrument to which it is a party or by which it may be bound,
      which violation or failure to obtain materially and adversely affect the
      business or condition (financial or otherwise) of the Servicer and its
      subsidiaries, the Servicer's ability to perform its obligations hereunder
      or under any other Basic Document or any of the Trust Property.

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<PAGE>

            (ix)  Investment Company. The Servicer is not an investment company
      which is required to register under the Investment Company Act of 1940, as
      amended.

            (x)   Taxes. The Servicer has filed on a timely basis all material
      tax returns required to be filed by it and paid all material taxes, to the
      extent that such taxes have become due.

            (xi)  No Injunctions. There are no existing injunctions, writs,
      restraining orders or other similar orders which might adversely affect
      the performance by the Servicer or its obligations under, or the validity
      and enforceability of, this Agreement or any other Basic Document to which
      it is a party.

            (xii) Practices. The practices used or to be used by the Servicer,
      to monitor collections with respect to the Trust Property and repossess
      and dispose of the Financed Vehicles related to the Trust Property will
      be, in all material respects, in conformity with the requirements of all
      applicable federal and State laws, rules and regulations, and this
      Agreement. The Servicer is in possession of all State and local licenses
      (including all debt collection licenses) required for it to perform its
      services hereunder, and none of such licenses has been suspended, revoked
      or terminated, except where the failure to have such licenses would not be
      reasonably likely to have material adverse effect on its ability to
      service the Dealer Loans or Contracts or on the interest of the Indenture
      Trustee, the Trust Collateral Agent, the Class A Insurer, the Backup
      Insurer or the Class A Noteholders.

         SECTION 7.02. Indemnities of Servicer.

The Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer under this Agreement and the
other Basic Documents to which it is a party and no implied duties or
obligations shall be read into this Agreement against the Servicer.

            (i)   The Servicer shall defend, indemnify, and hold harmless the
      Trust Collateral Agent, the Backup Servicer, the Indenture Trustee, the
      Class A Insurer, the Backup Insurer and the Owner Trustee and their
      respective officers, directors, employees and agents, and the Trust from
      and against any and all costs, expenses, losses, damages, claims, and
      liabilities, arising out of or resulting from the use, ownership, or
      operation by the Servicer or any Affiliate thereof of a Financed Vehicle.

            (ii)  The Servicer shall indemnify, defend, and hold harmless the
      Trust Collateral Agent, the Indenture Trustee, the Owner Trustee, the
      Backup Servicer, the Class A Insurer, the Backup Insurer and their
      respective officers, directors, employees and agents, and the Trust from
      and against any taxes that may at any time be asserted against them with
      respect to the transactions contemplated herein, including, without
      limitation, any sales, gross receipts, general corporation, tangible
      personal property, privilege, or license taxes (but, in the case of the
      Trust, not including any taxes asserted with respect to, and as of the
      date of, the sale of the Dealer Loans to the Trust or the issuance and
      original sale of the Class A Notes, or asserted with respect to ownership
      of

                                       74
<PAGE>

      the Dealer Loans, or federal or other income taxes arising out of the
      transactions contemplated by this Agreement) and costs and expenses in
      defending against the same.

            (iii) The Servicer shall indemnify, defend, and hold harmless the
      Trust, the Backup Servicer, the Trust Collateral Agent, the Owner Trustee,
      the Indenture Trustee, the Class A Insurer, the Backup Insurer and each of
      their respective officers, directors, employees and agents, and the Class
      A Noteholders from and against any and all costs, expenses, losses,
      claims, damages, and liabilities to the extent that such cost, expense,
      loss, claim, damage, or liability arose out of, or was imposed upon such
      party through the breach by the Servicer of its obligations under this
      Agreement or any other Basic Document to which it is a party, in its
      capacity as Servicer, the negligence, willful misconduct or bad faith of
      the Servicer in the performance of its duties under this Agreement or any
      other Basic Document to which it is a party.

            (iv)  The Servicer shall indemnify, defend, and hold harmless the
     Trust Collateral Agent, the Indenture Trustee, the Owner Trustee, the
      Class A Insurer, the Backup Insurer, the Backup Servicer and each of their
      respective officers, directors, employees and agents from and against all
      costs, expenses, losses, claims, damages, and liabilities arising out of
      or incurred in connection with the acceptance or performance of the trusts
      and duties herein contained, except, with respect to the any such
      indemnified party, to the extent that such cost, expense, loss, claim,
      damage, or liability: (a) shall be due to the willful misconduct, bad
      faith, or negligence (or, in the case of the Owner Trustee, gross
      negligence) of such indemnified party; (b) shall arise from such
      indemnified party's breach of any of its representations or warranties in
      any material respect set forth in the Indenture; or (c) as to the Trust
      Collateral Agent, shall arise out of or be incurred in connection with the
      performance by the Trust Collateral Agent of the duties of successor
      Servicer hereunder.

            (v)   The Servicer shall indemnify, defend, and hold harmless, the
      Indenture Trustee, the Owner Trustee, the Class A Insurer, the Backup
      Insurer and each of their officers, directors, employees and agents from
      and against all costs, expenses, losses, claims, damages, and liabilities
      arising out of or incurred in connection with the acceptance or
      performance of the trusts and duties contained in the Trust Agreement,
      except, as to any such party, to the extent that such cost, expense, loss,
      claim, damage, or liability: (a) shall be due to the willful misconduct,
      bad faith or negligence (or in the case of the Owner Trustee, gross
      negligence) of such party; or (b) shall arise from such breach of any of
      its representations or warranties set forth in the Trust Agreement.

            (vi)  The Servicer shall indemnify, defend, and hold harmless, the
      Backup Servicer and its officers, directors, employees and agents from and
      against all costs, expenses, losses, claims, damages, and liabilities to
      the extent that such cost, expense, claim, damage, or liability arose out
      of, or was imposed upon the Backup Servicer resulting from the acts or
      omissions of the Servicer in the performance of its duties in its capacity
      as Servicer under this Agreement or any other Basic Document to which it
      is a party.

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<PAGE>

      Indemnification under this Section by the Servicer, with respect to the
period such Person was (or was deemed to be) the Servicer, shall survive the
termination of such Person as Servicer or a resignation by such Person as
Servicer as well as the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts to the Servicer, without interest.

      For purposes of this Section 7.02, in the event of the termination of the
rights and obligations of the Servicer (or any successor thereto pursuant to
Section 7.03) as Servicer pursuant to Section 8.01, a non-renewal of the
servicing term referred to in Section 4.01(a) or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall remain the Servicer until a
successor Servicer has accepted its appointment pursuant to Section 8.02. The
provisions of this paragraph shall in no way affect the survival pursuant to the
preceding paragraph of the indemnification by the Servicer.

      Notwithstanding any other provision of this Agreement, the obligations of
the Servicer described in this Section shall not terminate or be deemed released
upon the resignation or termination of the Servicer and shall survive any
termination of this Agreement to the extent that such obligations arise from the
Servicer's actions hereunder while acting as Servicer.

      SECTION 7.03. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer; Resignation.

      Any Person (i) into which the Servicer may be merged or consolidated, (ii)
resulting from any merger, conversion, or consolidation to which the Servicer
shall be a party, or (iii) succeeding to the business of the Servicer (or to
substantially all of the Servicer's business insofar as it relates to the making
of Dealer Loans to Dealers and the servicing of the Dealer Loans and the related
Contracts), which corporation in any of the foregoing cases executes an
agreement of assumption acceptable to the Controlling Party to perform every
obligation of the Servicer under this Agreement and the other Basic Documents to
which it is a party, will be the successor to the Servicer under this Agreement
and the other Basic Documents to which it is a party without the execution or
filing of any paper or any further act on the part of any of the parties to this
Agreement; provided, however, that (x) the Servicer shall have delivered to the
Trust Collateral Agent, the Class A Insurer, the Backup Insurer, the Owner
Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, conversion, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent provided for in this Agreement and the other Basic
Documents to which it is a party relating to such transaction have been complied
with and (y) the Servicer shall have delivered to the Trust Collateral Agent,
the Class A Insurer, the Backup Insurer, the Owner Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
Counsel, all financing statements and continuation statements and amendments
thereto have been filed that are necessary fully to preserve and protect the
interest of the Trust in the Contracts which secure the Dealer Loans, and
reciting the details of such filings, or (B) stating that, in the opinion of
such Counsel, no such action shall be necessary to preserve and protect such
interest and (z) the Rating Agencies shall have confirmed the "shadow ratings"
of the Class A Notes without regard to the Class A Note Insurance Policy or the
Backup

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Insurance Policy. The Servicer shall provide notice of any merger, conversion,
consolidation or succession pursuant to this Section to the Class A Insurer, the
Backup Insurer and the Rating Agencies then providing a rating for the Class A
Notes. The Trust Collateral Agent shall forward a copy of each such notice to
each Class A Noteholder. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(x), (y) and (z) above shall be conditions to the consummation of the
transactions referred to in clauses (i), (ii), (iii) or (iv) above.

      SECTION 7.04. Limitation on Liability of Servicer and Others.

Subject to Section 7.02, neither the Servicer nor any of the directors or
officers or employees or agents of the Servicer shall be under any liability to
the Trust, the Trust Collateral Agent or the Class A Noteholders or the
Certificateholders, except as provided under this Agreement or any other Basic
Document to which it is a party, for any action taken or omitted to be taken
pursuant to this Agreement in the good faith business judgment of the Servicer;
provided, however, that this provision shall not protect the Servicer against
any liability that would otherwise be imposed by reason of bad faith, willful
misconduct in the performance of duties, or by reason of negligence in the
performance of its duties under this Agreement or any other Basic Document to
which it is a party. The Servicer and any director, officer or employee or agent
of the Servicer may rely in good faith on any advice of counsel, Opinion of
Counsel or on any Officer's Certificate of the Seller or certificate of auditors
or other document of any kind believed to be genuine and to have been signed by
the proper party in respect of any matters arising under this Agreement.

      Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute, or defend any legal action that shall not be
incidental to its duties to service the Dealer Loans and the related Contracts
in accordance with this Agreement, and that in its opinion may involve it in any
expense or liability; provided, however, that the Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties to this Agreement and the
interests of the Class A Noteholders and the Certificateholders under this
Agreement. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs, and liabilities of the
Servicer.

      SECTION 7.05. Delegation of Duties.

The Servicer may at any time perform specific duties or all the duties
enumerated herein as servicer under this Agreement through a sub-contractor
acceptable to the Controlling Party; provided, that no such delegation or
subcontracting shall relieve the Servicer of its responsibilities with respect
to such duties as to which the Servicer shall remain primarily responsible with
respect thereto.

      SECTION 7.06. Certification Upon Satisfaction.

Upon the satisfaction and discharge of the Indenture pursuant to Section 4.1
thereof, the Servicer shall deliver to the Owner Trustee a written certification
of a Responsible Officer stating, to the best knowledge of such Responsible
Officer, that (a) no claims remain against the Issuer, or (b)

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the only pending or threatened claims known to such Responsible Officer
(including contingent and unliquidated claims) are those listed on a schedule to
such certification.

                                  ARTICLE VIII
                                     DEFAULT

         SECTION 8.01. Servicer Defaults.

If any one of the following events (each, a "Servicer Default") shall occur:

            (i)   any failure by the Servicer: (x) to deposit to the Collection
      Account (A) any amount required to be deposited therein by the Servicer
      (other than any such failure resulting from an administrative or technical
      error of the Servicer in the amount so deposited); or (B) within one (1)
      Business Day after the Servicer becomes aware that, as a result of an
      administrative or technical error of the Servicer, any amount previously
      deposited by the Servicer to the Collection Account was less than the
      amount required to be deposited therein by the Servicer, the amount of
      such shortfall; or (y) to deliver to the Trust Collateral Agent or the
      Insurers the Servicer's Certificate on the related Determination Date;

            (ii)  failure on the part of the Servicer duly to observe or to
      perform in any material respect any other covenants or agreements of the
      Servicer set forth in the any Basic Document, or any representation or
      warranty of the Servicer made in this Agreement, any other Basic Document
      or in any certificate or other writing delivered pursuant to any Basic
      Document proving to have been incorrect in any material respect as of the
      time when the same shall have been made, which default shall continue
      unremedied for a period of 30 days (or a longer period, not in excess of
      60 days, as may be reasonably necessary to remedy such default, if the
      default is capable of remedy within 60 days or less and the Servicer
      delivers an Officer's Certificate to the Indenture Trustee to the effect
      that it has commenced, or will promptly commence and diligently pursue,
      all reasonable efforts to remedy the default) after (x) there shall have
      been given written notice of such failure, requiring the same to be
      remedied, (1) to the Servicer, by the Trust Collateral Agent, or (2) to
      the Servicer by either Insurer, or if both a Class A Insurer Default and a
      Backup Insurer Default have has occurred and are continuing, by the Trust
      Collateral Agent at the direction of Class A Noteholders representing at
      least 25% or the Outstanding Class A Note Balance; or (y) discovery of
      such failure by an officer of the Servicer; or

            (iii) the entry of a decree or order by a court or agency or
      supervisory authority having jurisdiction in the premises for the
      appointment of a conservator, receiver, or liquidator for the Servicer or
      any of its subsidiaries in any insolvency, readjustment of debt,
      marshalling of assets and liabilities, or similar proceedings, or for the
      winding up or liquidation of its respective affairs, and the continuance
      of any such decree or order unstayed and in effect for a period of 60
      consecutive days or the entry of any decree or order for relief in respect
      of the Servicer or any of its subsidiaries under any bankruptcy,
      reorganization, compromise, arrangement, insolvency, readjustment of

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      debt, or similar law, whether now or hereafter in effect, which decree or
      order for relief continues unstayed and in effect for a period of 60
      consecutive days; or

            (iv)  the consent by the Servicer or any of its subsidiaries to the
      appointment of a conservator or receiver or liquidator in any insolvency,
      readjustment of debt, marshalling of assets and liabilities, or similar
      proceedings of or relating to the Servicer or any of its subsidiaries or
      relating to substantially all of its property; or the admission by the
      Servicer or any of its subsidiaries in writing of its inability to pay its
      debts generally as they become due, the filing by the Servicer or any of
      its subsidiaries of a petition to take advantage of any applicable
      insolvency or reorganization statute, the making by the Servicer or any of
      its subsidiaries of an assignment for the benefit of its creditors, or the
      voluntarily suspension by the Servicer or any of its subsidiaries of
      payment of its obligations;

            (v)   the Servicer breaches any Financial Covenant, after giving
      effect to all notice and grace periods set forth herein; or

            (vi)  the Originator or Servicer, if Credit Acceptance is the
      Servicer, fails to pay when due Purchase Amounts in excess of $100,000;

then, and in each and every case, the Trust Collateral Agent, if so requested by
the Controlling Party, or if both a Class A Insurer Default and Backup Insurer
Default have occurred and are continuing, the Majority Noteholders by notice
then given in writing to the Servicer, the Backup Servicer, the Trust Collateral
Agent may: (A) terminate all of the rights and obligations of the Servicer under
this Agreement or (B) if Credit Acceptance is the Servicer, reduce its servicing
term then in effect to a term of three (3) months. Upon sending or receiving any
such notice, the Trust Collateral Agent shall promptly send a copy thereof to
the Indenture Trustee, the Owner Trustee, the Rating Agencies, the Class A
Insurer, the Backup Insurer and to each Class A Noteholder. Within 30 days after
the receipt by the Backup Servicer of such written notice (if such notices
relates to terminating the Servicer) and subject to Section 8.02(a)), all
authority and power of the Servicer under this Agreement, whether with respect
to the Class A Notes or the Dealer Loans or Contracts or otherwise, shall,
without further action, pass to and be vested in the Backup Servicer or such
successor Servicer as may be appointed under Section 8.02; and, without
limitation, the Backup Servicer is hereby authorized and empowered to execute
and deliver, on behalf of the predecessor servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of the
Dealer Loans and the Contracts and related documents, or otherwise.

      The predecessor Servicer shall cooperate with the successor Servicer and
the Backup Servicer in effecting the termination of the responsibilities and
rights of the predecessor Servicer under this Agreement, including the transfer
to the Backup Servicer or the successor Servicer for administration by it of all
cash amounts that shall at the time be held by the predecessor servicer for
deposit, or shall thereafter be received with respect to a Dealer Loan or
related Contract, and the related accounts and records maintained by the
Servicer. All Transition Expenses shall be paid by the predecessor servicer upon
presentation of reasonable documentation of such costs and expenses. If such
Transition Expenses are not paid to the

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successor Servicer by the predecessor Servicer, such Transition Expenses shall
be paid under Section 5.08(a)(i) hereof. In addition, the Controlling Party
shall have the option to pay the Transition Expenses. If the Controlling Party
elects to pay any such Transition Expenses, the amount paid by the Controlling
Party shall constitute part of the Reimbursement Obligations owed to it.

      SECTION 8.02. Appointment of Successor.

      (a) Upon the Servicer's receipt of notice of termination pursuant to
Section 8.01, the expiration and non-renewal of the Servicer's term pursuant to
Section 4.01(a) or the Servicer's resignation in accordance with the terms of
this Section 4.14, the predecessor servicer shall continue to perform its
functions as Servicer under this Agreement, in the case of termination, only
until (i) the date of such expiration, in the case of a termination pursuant to
Section 4.01(a), (ii) the date specified in such termination notice or, if no
such date is specified in a notice of termination, until receipt of such notice
and, (iii) in the case of resignation, until the later of (x) the date 30 days
from the delivery to the Backup Servicer and the Trust Collateral Agent and the
Indenture Trustee of written notice of such resignation (or the date of written
confirmation of such notice prior to the expiration of the 45 days) in
accordance with the terms of this Agreement and (y) the date upon which the
predecessor servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's resignation or termination hereunder, and, so long as both a Class A
Insurer Default and a Backup Insurer Default are not continuing, if the
Controlling Party so directs, the Backup Servicer shall be the successor in all
respects to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof, as modified or limited by the Backup
Servicing Agreement; provided, however, that the Backup Servicer shall not be
liable for any actions of any Servicer prior to such succession or for any
breach by the Servicer of any of its representations and warranties contained in
this Agreement or in any related document or agreement. Notwithstanding the
above, if the Backup Servicer is legally unable to so act or, so long as both a
Class A Insurer Default and a Backup Insurer Default are not continuing, the
Controlling Party otherwise directs, the Controlling Party may appoint a
successor Servicer, otherwise, the Trust Collateral Agent shall appoint (after
soliciting bids from potential servicers), or petition a court of competent
jurisdiction to appoint, a Servicer as the successor Servicer hereunder, in the
assumption of all or any part of the responsibilities, duties or liabilities of
the outgoing Servicer hereunder. In the event that SST, as Backup Servicer, is
legally unable to act as Servicer under this Agreement and another entity is
appointed as successor Servicer under this Section 8.02(a), SST shall have no
further obligation to perform the obligations of Servicer or Backup Servicer
under this Agreement. Pending appointment of a successor to the outgoing
Servicer hereunder, if the Backup Servicer is prohibited by law from so acting
(as evidenced by an Opinion of Counsel to the Trust Collateral Agent, the Class
A Insurer and the Backup Insurer) or, so long as both a Class A Insurer Default
and a Backup Insurer Default are not continuing, the Controlling Party otherwise
directs, the Trust Collateral Agent shall act in such capacity as hereinabove
provided; provided, however, that the Trust Collateral Agent shall not be liable
for any actions of any Servicer prior to such succession or for any breach by
the Servicer of any of its representations and warranties contained in this
Agreement or in any related document or agreement. In the event that the Trust
Collateral Agent is so prohibited by law from acting or, so

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long as both a Class A Insurer Default and a Backup Insurer Default are not
continuing, the Controlling Party otherwise directs, the outgoing Servicer shall
continue to act as Servicer hereunder until a successor Servicer which, so long
as both a Class A Insurer Default and a Backup Insurer Default are not
continuing, shall be acceptable to the Controlling Party is appointed and
assumes the obligations as successor Servicer. In the event the Backup Servicer
assumes the responsibilities of the Servicer pursuant to this Section 8.02, the
Backup Servicer will make reasonable efforts consistent with Applicable Law to
become licensed, qualified and in good standing under the laws which require
licensing or qualification, in order to perform its obligations as Servicer
hereunder or, alternatively, shall retain an agent who is so licensed, qualified
and in good standing.

      (b) Upon appointment, the Backup Servicer or the successor Servicer shall
be the successor in all respects to the predecessor servicer and shall be
subject to the responsibilities, duties, and liabilities arising thereafter
relating thereto placed on the predecessor servicer, (subject to the limitations
and modifications thereto set forth in the Backup Servicing Agreement) and shall
be entitled to (to the extent arranged in accordance with the following
paragraph) the Servicing Fee, Servicer Expenses, Reliening Expenses,
Repossession Expenses and all of the rights granted to the predecessor servicer,
by the terms and provisions of this Agreement, provided that neither the Backup
Servicer nor the successor Servicer shall be liable for the acts or omissions of
any predecessor servicer. The Backup Servicer or any successor Servicer shall
provide Credit Acceptance with copies of all documents and information
reasonably necessary for Credit Acceptance to perform its obligations under
Section 4.17 of this Agreement.

      (c) In connection with such appointment, the Trust Collateral Agent may
make such arrangements for the compensation of such successor Servicer
(including Transition Expenses) out of payments on Dealer Loans and related
Contracts as it, the Controlling Party (so long as both a Class A Insurer
Default and a Backup Insurer Default are not continuing) and such successor
Servicer shall agree; provided, however, that no such compensation (excluding
Transition Expenses, Repossession Expenses and Reliening Expenses) shall be in
excess of the Servicing Fee. The Backup Servicer, the Trust Collateral Agent and
any such successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.

      SECTION 8.03. Notification to Class A Noteholders and Certificateholders.

Upon any termination of, or appointment of a successor to, the Servicer pursuant
to this Article VIII, the Trust Collateral Agent shall promptly upon its receipt
of notice thereof give prompt written notice thereof to Class A Noteholders and
the Certificateholders at their respective addresses appearing in the Note
Register and the Certificate Register, to the Owner Trustee and to each of the
Rating Agencies then rating the Class A Notes, the Class A Insurer and the
Backup Insurer.

      SECTION 8.04. Waiver of Past Defaults.

So long as both a Class A Insurer Default and a Backup Insurer Default are not
continuing, the Controlling Party, may, on behalf of all Class A Noteholders,
waive any or all default(s) by the

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Servicer or the Seller in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from a Trust Account in accordance with this Agreement. Upon any such waiver of
a past default, such default shall cease to exist, and any Servicer Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. Notwithstanding anything herein to the contrary, the Controlling
Party shall have the right to waive the payment of any Purchase Amount required
hereunder.

                                   ARTICLE IX

                           THE TRUST COLLATERAL AGENT

      SECTION 9.01. Duties of the Trust Collateral Agent.

      (a) The Issuer hereby appoints JPMorgan Chase Bank as the Trust Collateral
Agent, and JP Morgan Chase hereby accepts such appointment.

      (b) (i) the Trust Collateral Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement and the Basic
Documents and no implied covenants or obligations shall be read into this Sale
and Servicing Agreement or the Basic Documents against the Trust Collateral
Agent; and

            (ii)  in the absence of bad faith or willful misconduct on its part,
   the Trust Collateral Agent may conclusively rely, as to the truth of the
   statements and the correctness of the opinions expressed therein, upon
   certificates or opinions furnished to the Trust Collateral Agent and
   conforming to the requirements of this Agreement and the Basic Documents;
   however, the Trust Collateral Agent shall examine the certificates and
   opinions to determine whether or not they conform on their face to the
   requirements of this Agreement and the Basic Documents.

      (c) The Trust Collateral Agent may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own bad faith or
willful misconduct, except that:

            (i)   this paragraph does not limit the effect of paragraph (b) of
   this Section; and

            (ii)  the Trust Collateral Agent shall not be liable for any error
   of judgment made in good faith by a Responsible Officer of the Trust
   Collateral Agent unless it is proved that the Trust Collateral Agent was
   negligent in ascertaining the pertinent facts.

      (d) Money held in trust by the Trust Collateral Agent need not be
segregated from other funds except to the extent required by law or the terms of
this Agreement.

      (e) No provision of this Agreement shall require the Trust Collateral
Agent to expend or risk its own funds or otherwise incur liability (financial or
otherwise) in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers, if it

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shall have reasonable grounds to believe that repayment of such funds or
indemnity satisfactory to it against such risk or liability reasonably
satisfactory to it is not reasonably assured to it.

      (f) Every provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Trust Collateral Agent shall be
subject to the provisions of this Section.

      (g) Without limiting the generality of this Section, the Trust Collateral
Agent shall have no duty (A) to see to any recording, filing or depositing of
this Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest in the Contracts which
secure the Dealer Loans or the Financed Vehicles, or to see to the maintenance
of any such recording or filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any insurance on the Financed
Vehicles or Obligors or to effect or maintain any such insurance, (C) to see to
the payment or discharge of any tax, assessment or other governmental charge or
any Lien or encumbrance of any kind owing with respect to, assessed or levied
against any part of the Trust, (D) to confirm or verify the contents of any
reports or certificates delivered to the Trust Collateral Agent pursuant to this
Agreement believed by the Trust Collateral Agent to be genuine and to have been
signed or presented by the proper party or parties, or (E) to inspect the
Contracts at any time or ascertain or inquire as to the performance or
observance of any of the Issuer's, the Seller's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer and as custodian of the Dealer Agreements, the original
Certificates of Title relating to the Financed Vehicles and the Contracts under
this Agreement.

      (h) In no event shall JPMorgan Chase Bank, in any of its capacities
hereunder, be deemed to have assumed any duties of the Owner Trustee under the
Delaware Statutory Trust Act, common law, or the Trust Agreement.

      (i) JPMorgan Chase Bank by its execution hereof accepts its appointment as
Trust Collateral Agent under the Indenture and this Agreement. The Trust
Collateral Agent shall act upon and in compliance with the written instructions
of the Indenture Trustee delivered pursuant to the Indenture promptly following
receipt of such written instructions; provided that the Trust Collateral Agent
shall not act in accordance with any instructions: (i) which are not authorized
by, or in violation of the provisions of, the Indenture or this Agreement; (ii)
which are in violation of any applicable law, rule or regulation; or (iii) for
which the Trust Collateral Agent has not received indemnity reasonably
satisfactory to it. Receipt of such instructions shall not be a condition to the
exercise by the Trust Collateral Agent of its express duties hereunder, except
where the Indenture or this Agreement provides that the Trust Collateral Agent
is permitted to act only following and in accordance with such instructions.

      SECTION 9.02. Rights of the Trust Collateral Agent.

      (a) Before the Trust Collateral Agent acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Trust Collateral
Agent shall not be liable for any action it takes or omits to take in good faith
in reliance on an Officer's Certificate or Opinion of Counsel.

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      (b) The Trust Collateral Agent may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and shall not be responsible for
the misconduct or negligence of any agent, attorney, custodian or nominee
appointed with due care.

      (c) The Trust Collateral Agent shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trust Collateral Agent's conduct
does not constitute willful misconduct, negligence or bad faith.

      (d) The Trust Collateral Agent may consult with counsel, and the written
advice or opinion of counsel with respect to legal matters relating to this Sale
and Servicing Agreement and the Class A Notes or Certificates shall be full and
complete authorization and protection from liability in respect to any action
taken, omitted or suffered by it hereunder in good faith and in accordance with
the written advice or opinion of such counsel.

      (e) The Trust Collateral Agent shall be under no obligation to exercise
any of the rights and powers vested in it by this Agreement or the other Basic
Documents, or to institute, conduct or defend any litigation under this
Agreement or in relation to this Sale and Servicing Agreement, at the request,
order or direction of any of the Holders of Notes or Certificates or the
instructing party, as the case may be, pursuant to the provisions of this
Agreement, unless it shall have been offered to the Trust Collateral Agent
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that may be incurred therein or thereby.

      (f) The Trust Collateral Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by the Majority Noteholders or the Controlling Party (so long as both a Class A
Insurer Default and a Backup Insurer Default are not continuing); provided,
however, that if the payment within a reasonable time to the Trust Collateral
Agent of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trust Collateral Agent,
not reasonably assured to the Trust Collateral Agent by the security afforded to
it by the terms of this Agreement, the Trust Collateral Agent may require
indemnity reasonably satisfactory to it against such cost, expense or liability
as a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the requesting Holders or the instructing party, as
the case may be, or, if paid by the Trust Collateral Agent, shall be reimbursed
by the requesting Holders upon demand.

      (g) Delivery of any reports, information and documents to the Trust
Collateral Agent provided for herein is for informational purposes only (unless
otherwise expressly stated herein) and the Trust Collateral Agent's receipt of
such shall not constitute constructive knowledge of any information contained
therein or determinable from information contained therein, including the
Servicer's, Seller's or Issuer's compliance with any of its representations,
warranties or covenants hereunder (as to which the Trust Collateral Agent is
entitled to rely exclusively on Officers' Certificates).

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      (h) The Trust Collateral Agent shall not be deemed to have knowledge of a
Servicer Default or an Early Amortization Event unless a Responsible Officer of
the Trust Collateral Agent has actual knowledge or has received written notice
thereof.

      (i) In no event shall the Indenture Trustee be liable for any indirect, or
consequential, punitive or special damages, regardless of the form of action and
whether or not any such damages were foreseeable or contemplated.

      (j) The Trust Collateral Agent may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval or other paper or document believed by it to be genuine and to have
been signed or presented by the property party or parties.

      (k) In no event shall the Trust Collateral Agent be liable for any act or
omission on the part of the Issuer or the Servicer or any other Person. The
Trust Collateral Agent shall not be responsible for monitoring or supervising
the Issuer or the Servicer.

      SECTION 9.03. Individual Rights of Trust Collateral Agent.

The Trust Collateral Agent in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Trust Collateral
Agent.

      SECTION 9.04. Reports by Trust Collateral Agent to Holders.

The Trust Collateral Agent shall on behalf of the Issuer deliver to each Class A
Noteholder such information as may be reasonably required to enable such Holder
to prepare its Federal and state income tax returns.

      SECTION 9.05. Compensation.

      (a) The Issuer shall pay to the Trust Collateral Agent from time to time
compensation provided under this Agreement, as provided in a separate fee
letter, and all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services,
except any such expense as may be attributable to its willful misconduct,
negligence or bad faith. Such compensation and expenses shall be paid in
accordance with Section 5.08(a) hereof. Such expenses shall include securities
transaction charges relating to the investment of funds on deposit in the Trust
Accounts and the reasonable compensation and reasonable expenses, disbursements
and advances of the Trust Collateral Agent's counsel and of all persons not
regularly in its employ; provided, however, that the securities transaction
charges referred to above shall, in the case of certain Eligible Investments
selected by the Servicer, be waived for a particular investment in the event
that any amounts are received by the Trust Collateral Agent from a financial
institution in connection with the purchase of such Eligible Investments.

      (b) [Reserved.]

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      (c) The Issuer's and the Servicer's payment obligations to the Trust
Collateral Agent pursuant to this Section shall survive the discharge of this
Agreement and any resignation or removal of the Trust Collateral Agent. When the
Trust Collateral Agent incurs expenses after the occurrence of an Indenture
Event of Default specified in Section 5.1(iv) or (v) of the Indenture with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or similar law. Notwithstanding anything
else set forth in this Agreement or the Basic Documents, the Trust Collateral
Agent agrees that the obligations of the Issuer or the Seller (but not the
Servicer) to the Trust Collateral Agent hereunder and under the Basic Documents
shall not be recourse to the assets of the Issuer, the Seller or any Class A
Noteholder.

      SECTION 9.06. Eligibility.

The Trust Collateral Agent under this Agreement shall at all times be a
corporation or banking association having an office in the same state as the
location of the Corporate Trust Office as specified in this Agreement;
acceptable to the Controlling Party, so long as both a Class A Insurer Default
and a Backup Insurer Default are not continuing; organized and doing business
under the laws of such state or the United States of America; authorized under
such laws to exercise corporate trust powers; having a combined capital and
surplus of at least $100,000,000; having long-term unsecured debt obligations
rated at least "Baa2" by Moody's and "BBB-" by Standard and Poor's; and subject
to supervision or examination by federal or state authorities. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trust Collateral Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trust Collateral Agent shall resign immediately,
provided that such resignation shall not be effective until a successor Trust
Collateral Agent accepts appointment in accordance with Section 9.10(d) hereof.

      SECTION 9.07. Trust Collateral Agent's Disclaimer.

The Trust Collateral Agent shall not be responsible for and make no
representation as to the validity, sufficiency or adequacy of this Agreement,
the Trust Property or the Securities, shall not be accountable for the Issuer's
use of the proceeds from the Securities, and shall not be responsible for any
statement of the Issuer in this Agreement or in any document issued in
connection with the sale of the Securities or in the Securities.

      SECTION 9.08. Limitation on Liability.

Neither the Trust Collateral Agent nor any of its directors, officers or
employees shall be liable for any action taken or omitted to be taken by it or
them hereunder, or in connection herewith, except that the Trust Collateral
Agent shall be liable for its negligence, bad faith or willful misconduct; nor
shall the Trust Collateral Agent be responsible for the validity, effectiveness,
value, sufficiency or enforceability against the Issuer of this Agreement or any
of the Trust Property (or any part thereof). Notwithstanding any term or
provision of this Agreement, the

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Trust Collateral Agent shall incur no liability to the Issuer for any action
taken or omitted by the Trust Collateral Agent in connection with the Trust
Property, except for the negligence, bad faith or willful misconduct on the part
of the Trust Collateral Agent, and, further, shall incur no liability to the
Issuer except for negligence, bad faith or willful misconduct in carrying out
its duties to the Issuer. Subject to Section 9.09, the Trust Collateral Agent
shall be protected and shall incur no liability to any such party in relying
upon the accuracy, acting in reliance upon the contents, and assuming the
genuineness of any notice, demand, certificate, signature, instrument or other
document reasonably believed by the Trust Collateral Agent to be genuine and to
have been duly executed by the appropriate signatory (absent actual knowledge of
a Responsible Officer of the Trust Collateral Agent to the contrary), and the
Trust Collateral Agent shall not be required to make any independent
investigation or inquiry with respect thereto. The Trust Collateral Agent shall
at all times be free independently to establish to its reasonable satisfaction,
but shall have no duty to independently verify, the existence or nonexistence of
facts that are a condition to the exercise or enforcement of any right or remedy
hereunder or under any of the Basic Documents. The Trust Collateral Agent may
consult with counsel, and shall not be liable for any action taken or omitted to
be taken by it hereunder in good faith and in accordance with the written advice
of such counsel.

      SECTION 9.09. Reliance Upon Documents.

In the absence of bad faith or willful misconduct on its part, the Trust
Collateral Agent shall be entitled to conclusively rely on any communication,
instrument, paper or other document reasonably believed by it to be genuine and
correct and to have been signed or sent by the proper Person or Persons and
shall have no liability in acting, or omitting to act, where such action or
omission to act is in reasonable reliance upon any statement or opinion
contained in any such document or instrument.

      SECTION 9.10. Successor Trust Collateral Agent.

      (a) Merger. Any Person into which the Trust Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or substantially as a
whole, or any Person resulting from any such conversion, merger, consolidation,
sale or transfer to which the Trust Collateral Agent is a party, shall (provided
it is otherwise qualified to serve as the Trust Collateral Agent hereunder) be
and become a successor Trust Collateral Agent hereunder and be vested with all
of the trusts, powers, discretions, immunities, privileges and other matters as
was its predecessor without the execution or filing of any instrument or any
further act, deed or conveyance on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. The Trust Collateral Agent
shall give notice to the Class A Insurer, the Backup Insurer and the Rating
Agencies of any such transaction.

      (b) Resignation. The Trust Collateral Agent and any successor Trust
Collateral Agent may resign at any time by giving sixty days prior written
notice to the Issuer, the Rating Agencies, the Class A Insurer and the Backup
Insurer; provided, that such resignation shall not be effective until a
successor Trust Collateral Agent is appointed and accepts appointment in
accordance with clause (d) below.

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      (c) Removal.

         (i) The Issuer, prior to the Class A Termination Date with the prior
written consent of the Controlling Party, may remove the Trust Collateral Agent
by written notice if:

            (A)   a court having jurisdiction in the premises in respect of the
      Trust Collateral Agent in an involuntary case or proceeding under federal
      or state banking or bankruptcy laws, as now or hereafter constituted, or
      any other applicable federal or state bankruptcy, insolvency or other
      similar law, shall have entered a decree or order granting relief or
      appointing a receiver, liquidator, assignee, custodian, trustee,
      conservator, sequestrator (or similar official) for the Trust Collateral
      Agent or for any substantial part of the Trust Collateral Agent's
      property, or ordering the winding-up or liquidation of the Trust
      Collateral Agent's affairs;

            (B)   an involuntary case under the federal bankruptcy laws, as now
      or hereafter in effect, or another present or future federal or state
      bankruptcy, insolvency or similar law is commenced with respect to the
      Trust Collateral Agent and such case is not dismissed within 60 days;

            (C)   the Trust Collateral Agent commences a voluntary case under
      any federal or state banking or bankruptcy laws, as now or hereafter
      constituted, or any other applicable federal or state bankruptcy,
      insolvency or other similar law, or consents to the appointment of or
      taking possession by a receiver, liquidator, assignee, custodian, trustee,
      conservator, sequestrator (or other similar official) for the Trust
      Collateral Agent or for any substantial part of the Trust Collateral
      Agent's property, or makes any assignment for the benefit of creditors or
      fails generally to pay its debts as such debts become due or takes any
      corporate action in furtherance of any of the foregoing;

            (D)   failure to comply with any material covenant hereunder; or

            (E)   the Trust Collateral Agent otherwise becomes legally incapable
      of acting.

         (ii) The Controlling Party may remove the Trust Collateral Agent for
any reason by 30 days' prior written notice.

         (iii) If the Trust Collateral Agent resigns or is removed or if a
vacancy exists in the office of Trust Collateral Agent for any reason (the Trust
Collateral Agent in such event being referred to herein as the retiring Trust
Collateral Agent), prior to the Class A Termination Date the Controlling Party
may appoint a successor Trust Collateral Agent and if it fails to, the Issuer
shall promptly appoint a successor Trust Collateral Agent acceptable to the
Controlling Party. After the Class A Termination Date, the Issuer may appoint a
successor Trust Collateral Agent without the consent of the Controlling Party.

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      A successor Trust Collateral Agent shall deliver a written acceptance of
its appointment to the retiring Trust Collateral Agent and to the Issuer.
Thereupon the resignation or removal of the retiring Trust Collateral Agent
shall become effective, and the successor Trust Collateral Agent shall have all
the rights, powers and duties of the retiring Trust Collateral Agent under this
Indenture subject to satisfaction of the Rating Agency Condition. The successor
Trust Collateral Agent shall mail a notice of its succession to Class A
Noteholders, the Class A Insurer, the Backup Insurer and the Rating Agencies.
The retiring Trust Collateral Agent shall promptly transfer all property held by
it as Trust Collateral Agent to the successor Trust Collateral Agent.

      If a successor Trust Collateral Agent that is, prior to the Class A
Termination Date, acceptable to the Controlling Party does not take office
within 60 days after the retiring Trust Collateral Agent resigns or is removed,
the retiring Trust Collateral Agent, or the Controlling Party may petition any
court of competent jurisdiction for the appointment of a successor Trust
Collateral Agent that is meets the eligibility requirements set forth in Section
9.06 hereof.

      If the Trust Collateral Agent fails to comply with Section 9.12, any
Noteholder, prior to the Class A Termination Date with the prior written consent
of the Controlling Party, may petition any court of competent jurisdiction for
the removal of the Trust Collateral Agent and the appointment of a successor
Trust Collateral Agent acceptable to the Controlling Party.

      Any resignation or removal of the Trust Collateral Agent and appointment
of a successor Trust Collateral Agent pursuant to any of the provisions of this
Section shall not become effective until acceptance of appointment by the
successor Trust Collateral Agent acceptable to the Controlling Party pursuant to
this Section 9.10(c) and payment of all fees and expenses owed to the outgoing
Trust Collateral Agent by the Servicer and the Issuer.

      Notwithstanding the replacement of the Trust Collateral Agent pursuant to
this Section, the Issuer's and the Servicer's obligations under Section 9.05
shall continue for the benefit of the retiring Trust Collateral Agent.

         (d) Acceptance by Successor. If the Trust Collateral Agent has resigned
or has been removed pursuant to this Section 9.10, so long as both a Class A
Insurer Default and a Backup Insurer Default are not continuing, the Controlling
Party has the right to appoint a successor Trust Collateral Agent and if it
fails to, or if both a Class A Insurer Default and a Backup Insurer Default have
occurred and are continuing, the Owner Trustee shall have the sole right to
appoint each successor Trust Collateral Agent that meets the qualifications
required hereunder. Every temporary or permanent successor Trust Collateral
Agent appointed hereunder shall execute, acknowledge and deliver to its
predecessor and to the Owner Trustee, each Class A Noteholder, each
Certificateholder, the Rating Agencies, the Class A Insurer, the Backup Insurer
and the Issuer an instrument in writing accepting such appointment hereunder and
the relevant predecessor shall execute, acknowledge and deliver such other
documents and instruments as will effectuate the delivery of all Collateral to
the successor Trust Collateral Agent, whereupon such successor, without any
further act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, duties and obligations of its predecessor. Such
predecessor shall, nevertheless, on the written request of the Issuer, execute
and deliver an instrument transferring to such successor all the estates,
properties, rights and powers of such predecessor hereunder. In the event that
any instrument in writing from the

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Issuer is reasonably required by a successor Trust Collateral Agent to more
fully and certainly vest in such successor the estates, properties, rights,
powers, duties and obligations vested or intended to be vested hereunder in the
Trust Collateral Agent, any and all such written instruments shall, at the
request of the temporary or permanent successor Trust Collateral Agent, be
forthwith executed, acknowledged and delivered by the Owner Trustee or the
Issuer, as the case may be. The designation of any successor Trust Collateral
Agent and the instrument or instruments removing any Trust Collateral Agent and
appointing a successor hereunder, together with all other instruments provided
for herein, shall be maintained with the records relating to the Trust Property
and, to the extent required by applicable law, filed or recorded by the
successor Trust Collateral Agent in each place where such filing or recording is
necessary to effect the transfer of the Trust Property to the successor Trust
Collateral Agent or to protect or continue the perfection of the security
interests granted hereunder.

      If no successor Trust Collateral Agent shall have been appointed and
accepted the appointment within sixty (60) days after the giving of notice of
resignation, the resigning Trust Collateral Agent may petition any court of
competent jurisdiction for the appointment of a successor Trust Collateral Agent
that meets the qualifications required hereunder.

         SECTION 9.11. Representations and Warranties of the Trust Collateral
Agent.

The Trust Collateral Agent represents and warrants to the Issuer, the Class A
Insurer, the Backup Insurer and to the Class A Noteholders as follows:

            (i)   The Trust Collateral Agent is a New York banking corporation,
      duly organized and validly existing under the laws of the United States
      and is authorized to conduct and engage in a banking and trust business
      under such laws.

            (ii)  The Trust Collateral Agent has full corporate power,
      authority, and legal right to execute, deliver, and perform this Agreement
      and the other Basic Documents to which it is a party, and has taken all
      necessary action to authorize the execution, delivery, and performance, by
      it of this Agreement and the other Basic Documents to which it is a party.

            (iii) This Agreement and the other Basic Documents to which it is a
      party have been duly executed and delivered by the Trust Collateral Agent.

            (iv)  This Agreement and the other Basic Documents to which it is a
      party are the legal, valid and binding obligations of the Trust Collateral
      Agent enforceable in accordance with their respective terms, subject to
      the effects of bankruptcy, insolvency, reorganization, or other similar
      laws affecting the enforcement of creditors' rights generally and to
      general principles of equity.

         SECTION 9.12. Waiver of Setoffs.

Except with respect to the Certificate Distribution Account, the Trust
Collateral Agent hereby expressly waives any and all rights of setoff that the
Trust Collateral Agent may otherwise at any time have under applicable law with
respect to any Trust Account and agrees that amounts in the

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Trust Accounts shall at all times be held and applied solely in accordance with
the provisions hereof.

                                    ARTICLE X
                                   TERMINATION

      SECTION 10.01. Optional Purchase.

      (a) On the last day of any Collection Period as of which the Class A Note
Balance shall be less than or equal to 15% of the initial Class A Note Balance,
the Servicer shall have the option to reacquire the Trust Property, other than
the Trust Accounts. To exercise such option, the Servicer shall deposit pursuant
to Section 5.04 in the Collection Account an amount equal to the Purchase Amount
for the Dealer Loans, plus the appraised value of any other property held by the
Trust (other than the Trust Accounts), such value to be determined by an
appraiser mutually agreed upon by the Servicer and the Trust Collateral Agent.
Notwithstanding the foregoing, the Servicer shall not exercise such option
unless the Purchase Amount is sufficient to pay the full amount of principal and
interest due and payable on the Class A Notes, and all amounts due and payable
to the Class A Insurer, the Backup Insurer, the Indenture Trustee, the Trust
Collateral Agent, the Backup Servicer and the Owner Trustee under the Basic
Documents. Upon such deposit the Servicer shall succeed to all interests in and
to the Trust (other than the Trust Accounts).

      (b) Notice of any termination of the Trust shall be given by the Servicer
to the Owner Trustee, the Indenture Trustee, the Trust Collateral Agent, the
Class A Insurer, the Backup Insurer and the Rating Agencies as soon as
practicable after the Servicer has received notice of the occurrence of an event
of termination under Section 9.1(a) of the Trust Agreement.

      (c) Credit Acceptance shall have the right to purchase at any time 1.0% of
the Dealer Loans, based upon the Aggregate Outstanding Net Eligible Loan Balance
on the date of purchase for an amount equal to the greater of: (i) the Purchase
Amount related to such Dealer Loans; and (ii) the aggregate fair market value of
such Dealer Loans.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

      SECTION 11.01. Amendment.

      This Agreement may be amended by the Seller, the Servicer, and the Trust
Collateral Agent, without the consent of any of the Class A Noteholders (at the
written direction of the Issuer), but with the prior written consent of the
Controlling Party, so long as both a Class A Insurer Default and a Backup
Insurer Default are not continuing, to: (i) cure any ambiguity, to correct or
supplement any provisions in this Agreement, or to add any other provisions with
respect to matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; or (ii) reflect the
succession of a successor Servicer; provided, however, that in connection with
any amendment pursuant to clause (i), the action referred to therein shall not,
as evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Class A Noteholder; and provided, further, that in
connection with any amendment pursuant to clause (ii) above, the Servicer shall
deliver to the Trust Collateral Agent,

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the Class A Insurer, the Backup Insurer and the Indenture Trustee a letter from
each Rating Agency, which then has a rating on the Class A Notes, to the effect
that such amendment will not cause the then current ratings on the Class A Notes
to be qualified, reduced or withdrawn without regard to the Class A Note
Insurance Policy or the Backup Insurance Policy.

      This Agreement may also be amended from time to time by the Seller, the
Servicer, and the Trust Collateral Agent (at the written direction of the
Issuer) with the consent of the Controlling Party or, if both a Class A Insurer
Default and a Backup Insurance Default have occurred and are continuing, the
holders of Class A Notes (which consent of any Holder of a Class A Note given
pursuant to this Section or pursuant to any other provision of this Agreement
shall be conclusive and binding on such Holder and on all future Holders of such
Class A Note and of any Class A Note issued upon the registration of transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Class A Note), evidencing not less than 51% of the
sum of the then outstanding Class A Note Balance for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the Holders of the
Class A Notes; provided, however, that no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Contracts or distributions that shall be required to
be made on any Class A Note or change the Class A Note Rate or the Class A
Principal Distributable Amount or (b) reduce the aforesaid percentage required
to consent to any such amendment, without the consent of the Holders of all
Class A Notes then outstanding. Notwithstanding the foregoing, however, no
consent of any Class A Noteholder shall be required in connection with any
amendment in order for the Certificateholders to sell, assign, transfer or
otherwise dispose of the excess interest, provided that the Certificateholders
present evidence to the Trust Collateral Agent and the Insurers that the ratings
of the Class A Notes shall not be reduced or withdrawn as a result without
regard to the Class A Note Insurance Policy or the Backup Insurance Policy.

      Notwithstanding anything herein to the contrary, the Backup Insurer must
consent to all amendments to this Agreement which have an adverse effect on the
Backup Insurer.

      Prior to the execution of any such amendment or consent, the Servicer will
provide and the Trust Collateral Agent shall distribute written notification of
the substance of such amendment or consent to each Rating Agency then rating the
Class A Notes, the Class A Insurer and the Backup Insurer.

      Promptly after the execution of any such amendment or consent, the Trust
Collateral Agent shall furnish written notification of the substance of such
amendment or consent to each Class A Noteholder and each Certificateholder.

      It shall not be necessary for the consent of Class A Noteholders pursuant
to this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of Class
A Noteholders provided for in this Agreement) and of evidencing the
authorization of the execution thereof by Class A Noteholders shall be subject
to such reasonable requirements as the Trust Collateral Agent may prescribe.

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      Prior to the execution of any amendment to this Agreement, the Trust
Collateral Agent shall be entitled to receive and conclusively rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
11.02(i)(1). The Trust Collateral Agent may, but shall not be obligated to,
enter into any such amendment which affects the Trust Collateral Agent's own
rights, duties or immunities under this Agreement or otherwise.

      SECTION 11.02. Protection of Title to Trust.

      (a) The Seller shall file such financing statements and cause to be filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interest of the
Class A Noteholders, the Class A Insurer, the Backup Insurer, the Indenture
Trustee and the Trust Collateral Agent in the Dealer Loans and the related
Contracts and in the proceeds thereof and the sale of accounts and chattel
paper. The Seller shall deliver (or cause to be delivered) to the Trust
Collateral Agent, the Class A Insurer and the Backup Insurer file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.

      (b) None of the Originator, the Seller nor the Servicer shall change its
name, identity, state of incorporation or formation or corporate structure in
any manner that would, could, or might make any financing statement or
continuation statement filed by the Seller in accordance with paragraph (a)
above seriously misleading within the meaning of Section 9-506 or Section 9-507
of the UCC, unless it shall have given the Trust Collateral Agent, the Class A
Insurer and the Backup Insurer at least five days' prior written notice thereof
and shall have promptly filed appropriate amendments to all previously filed
financing statements or continuation statements.

      (c) The Seller, the Originator and the Servicer shall give the Trust
Collateral Agent, the Class A Insurer and the Backup Insurer at least 60 days'
prior written notice of any relocation of its principal executive office or
change of its state of incorporation or formation if, as a result of any such
change, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall promptly file any such amendment. Unless
otherwise permitted by the Controlling Party, the Servicer shall at all times
maintain each office from which it shall service the Dealer Loans and the
related Contracts, and its principal executive office, within the United States
of America.

      (d) The Servicer shall maintain accounts and records as to each Dealer
Loan and Contract accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Dealer Loan and Contract,
including payments and recoveries made and payments owing (and the nature of
each) and (ii) reconciliation between payments or recoveries on (or with respect
to) each Dealer Loan and Contract and the amounts from time to time deposited in
the Collection Account in respect of such Dealer Loan and Contract.

      (e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Dealer Loans and the related
Contracts to the Trust, the Servicer's master computer records (including any
back-up archives) that refer to a Dealer Loan or Contract shall indicate clearly
(including by means of tagging) the interest of the Trust

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<PAGE>

in such Dealer Loan or Contract and that such Dealer Loan or Contract is owned
by the Trust. Indication of the Trust's ownership of a Dealer Loan or Contract
shall be deleted from or modified on the Servicer's computer systems when, and
only when, the Dealer Loan or Contract shall have been paid in full or
repurchased.

      (f) If at any time the Seller or the Servicer shall propose to sell, grant
a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender, or other transferee, the
Servicer shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Dealer Loan
or Contract, shall indicate clearly (including by means of tagging) that such
Dealer Loan or Contract has been sold and is owned by the Trust.

      (g) The Servicer shall, upon reasonable prior notice, permit the Trust
Collateral Agent, the Class A Insurer, the Backup Insurer and their respective
agents at any time during normal business hours to inspect, audit, and make
copies of and abstracts from the Servicer's records regarding any Contract at
the office of the Servicer in a reasonable manner.

      (h) Upon request, the Servicer shall furnish to the Trust Collateral
Agent, the Indenture Trustee, the Class A Insurer and the Backup Insurer, within
twenty Business Days, a list of all Dealer Loans and Contracts (by agreement or
contract number and name of Dealer or Obligor) then held as part of the Trust,
together with a reconciliation of such list to the schedule of Dealer Loans,
Dealer Agreements and Contracts attached hereto as Schedule A and to each of the
Servicer's Certificates furnished before such request indicating removal of
Dealer Loans or Contracts from the Trust.

      (i) The Seller shall deliver to the Trust Collateral Agent, the Indenture
Trustee, the Class A Insurer and the Backup Insurer:

            (1)   upon the execution and delivery of this Agreement and of each
      amendment thereto, an Opinion of Counsel either (A) stating that, in the
      opinion of such counsel, all financing statements (and releases of
      financing statements) and continuation statements have been filed that are
      necessary fully to preserve and protect the interest of the Indenture
      Trustee and the Trust Collateral Agent in the Dealer Loans and the related
      Contracts, and reciting the details of the expected filings thereof or
      referring to prior Opinions of Counsel in which such details are given, or
      (B) stating that, in the opinion of such counsel, no such action shall be
      necessary to preserve and protect such interest; and

            (2)   within 90 days after the beginning of each calendar year
      beginning with the first calendar year beginning more than three months
      after the Cut-off Date, an Opinion of Counsel, dated as of a date during
      such 90-day period, either (A) stating that, in the opinion of such
      Counsel, all financing statements and continuation statements have been
      filed that are necessary fully to preserve and protect the interest of the
      Indenture Trustee and the Trust Collateral Agent in the Dealer Loans and
      the related Contracts, and reciting the details of such filings or
      referring to prior Opinions of Counsel in which such details are given, or
      (B)

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<PAGE>

      stating that, in the opinion of such Counsel, no such action shall be
      necessary to preserve and protect such interest. Such Opinion of Counsel
      shall also describe the filing of any financing statements and
      continuation statements that will, in the opinion of such counsel, be
      required to preserve and protect the interest of the Indenture Trustee and
      the Trust Collateral Agent in the Dealer Loans and the related Contracts,
      until January 30 in the following calendar year.

      Each Opinion of Counsel referred to in clause (i)(1) or (i)(2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following calendar year to preserve perfection of such interest.

      (j) For the purpose of facilitating the execution of this Agreement and
for other purposes, this Agreement may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.

      SECTION 11.03. Limitation on Rights of Class A Noteholders.

      No Class A Noteholder shall have any right to vote (except as provided in
this Agreement or in the Indenture) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties to this
Agreement, nor shall anything in this Agreement set forth, or contained in the
terms of the Class A Notes be construed so as to constitute the Class A
Noteholders from time to time as partners or members of an association; nor
shall any Class A Noteholder be under any liability to any third person by
reason of any action taken pursuant to any provision of this Agreement.

      No Class A Noteholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action, or proceeding
in equity or at law upon or under or with respect to this Agreement, unless, so
long as both a Class A Insurer Default and a Backup Insurer Default are not
continuing, the Controlling Party has given its prior written consent and such
Holder previously shall have given to the Trust Collateral Agent a written
notice of default and of the continuance thereof, and unless also (i) the
default arises from the Seller's or the Servicer's failure to remit payments
when due hereunder, or (ii) the Majority Noteholders shall have made written
request upon the Trust Collateral Agent to institute such action, suit or
proceeding in its own name as Trust Collateral Agent under this Agreement and
such Holder shall have offered to the Trust Collateral Agent such indemnity as
it may reasonably require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trust Collateral Agent, for 30 days after
its receipt of such notice, request, and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding and during
such 30-day period no request or waiver inconsistent with such written request
has been given to the Trust Collateral Agent pursuant to this Section or Section
8.04; no one or more Holders of Notes or Certificates shall have any right in
any manner whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb, or prejudice the rights of the
Holders of any other of the Class A Notes or the Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right, under this Agreement except in the manner provided in this
Agreement and for the equal, ratable, and common benefit of all Class A
Noteholders and all Certificateholders. For the protection and

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<PAGE>

enforcement of the provisions of this Section, each Class A Noteholder, each
Certificateholder and the Trust Collateral Agent shall be entitled to such
relief as can be given either at law or in equity.

      In the event the Trust Collateral Agent shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Class
A Notes, each representing less than the required amount of the Class A Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Agreement.

      SECTION 11.04. Governing Law.

      THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK (INCLUDING SECTION 1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), BUT OTHERWISE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

      SECTION 11.05. Notices.

      All demands, notices, and communications upon or to the Seller, the
Servicer, the Trust Collateral Agent, the Backup Servicer, the Owner Trustee,
the Indenture Trustee, the Class A Insurer, the Backup Insurer or any Rating
Agency under this Agreement shall be in writing, personally delivered or mailed
by certified mail, return receipt requested, and shall be deemed to have been
duly given upon receipt: (a) in the case of the Seller at the following address:
Attention: Credit Acceptance Funding LLC 2004-1/Wendy Rummler, Silver Triangle
Building, 25505 West Twelve Mile Road, Southfield, Michigan 48034-8339; phone
number: (248) 353-2700 (ext. 217); fax number: (866) 249-3138; (b) in the case
of the Servicer at the following address: Attention: Credit Acceptance
Corporation/Wendy Rummler, Silver Triangle Building, 25505 West Twelve Mile
Road, Southfield, Michigan 48034-8339; phone number: (248) 353-2700 (ext. 217);
fax number: (866) 249-3138; (c) in the case of the Trust Collateral Agent and
the Indenture Trustee, at its Corporate Trust Office, 4 New York Plaza, 6th
Floor, New York, NY 10024, Attention: Institutional Trust Services/Structured
Finance; (d) in the case of the Backup Servicer, at the following address:
Systems & Services Technologies, Inc., 4315 Pickett Road, St. Joseph, MO 64503,
Attention: John Campbell, President, Joseph Booz, EVP/General Counsel, phone:
(816) 671-2022; (816) 671-2028, fax: (816) 671-2029; (e) in the case of the
Owner Trustee, at: One Rodney Square 920 No. King St., 1st Floor, Wilmington, DE
19801 Attn: Sterling Correia, phone: (302) 888-7528; fax: (302) 888-7544; (f) in
the case of the Class A Insurer, to: Radian Asset Assurance Inc., 335 Madison
Avenue, New York, New York 10017, Attention: Chief Risk Officer and Chief Legal
Officer with an electronic copy sent to ABSRM@radian.biz in the case of any
information required to be provided to the Class A Insurer (and if such notice
refers to a Servicer Default or is a notice with respect to which the failure on
the part of the Class A Insurer to respond shall be deemed to constitute consent
or acceptance, such notice shall be marked to indicate "Urgent Material
Enclosed"); (g) in the case of the Backup Insurer, to: XL Capital Assurance
Inc., 1201 Avenue of the Americas, 31st Floor, New York, NY 10020-1001,
Attention: Surveillance; (h) in the case of S&P, to: Standard &

                                       96
<PAGE>

Poor's Rating Services, Asset Backed Surveillance Department, 55 Water Street,
New York, New York 10041 or to such other address as shall be designated by
written notice to the other parties; and (i) in the case of Moody's, to: Moody's
Investors Service, Inc., Attention: [ ], 99 Church Street, New York, NY 10007 or
to such other address as shall be designated by written notice to the other
parties. Any notice required or permitted to be mailed to a Class A Noteholder
or Certificateholder, as the case may be shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the Class A Note or
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Class A Noteholder or the Certificateholder, as the case may be, shall
receive such notice.

      SECTION 11.06. Severability of Provisions.

If any one or more of the covenants, agreements, provisions, or terms of this
Agreement shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Agreement and shall in no
way affect the validity or enforceability of the other provisions of this
Agreement or of the Securities or the rights of the Holders thereof or of the
Class A Insurer or the Backup Insurer.

      SECTION 11.07. Assignment.

Notwithstanding anything to the contrary contained herein, except as provided in
Sections 6.02, 6.05 and 7.03 and as provided in the provisions of this Agreement
concerning the resignation of the Servicer, this Agreement may not be assigned
by the Seller or the Servicer without the prior written consent of the Trust
Collateral Agent and the Controlling Party.

      SECTION 11.08. Further Assurances.

The Seller and the Servicer agree to do and perform, from time to time, any and
all acts and to execute any and all further instruments required or reasonably
requested by the Trust Collateral Agent or the Controlling Party more fully to
effect the purposes of this Agreement and the other Basic Documents, including,
without limitation, the execution of any financing statements or continuation
statements relating to the Dealer Loans or the related Contracts for filing
under the provisions of the UCC of any applicable jurisdiction.

      SECTION 11.09. No Waiver; Cumulative Remedies.

No failure to exercise and no delay in exercising, on the part of the Trust
Collateral Agent, the Class A Insurer, the Backup Insurer or the Class A
Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.

                                       97
<PAGE>

      SECTION 11.10. Third-Party Beneficiaries.

This Agreement will inure to the benefit of and be binding upon the parties
hereto, the Indenture Trustee, the Class A Noteholders and the
Certificateholders, respectively, and their respective successors and permitted
assigns. Except as may be otherwise provided in this Agreement, no other person
will have any right or obligation hereunder. Each of the Class A Insurer and the
Backup Insurer is an express third party beneficiary of this Agreement.

      SECTION 11.11. Actions by Noteholders.

      (a) Wherever in this Agreement a provision is made that an action may be
taken or a notice, demand, or instruction given by Noteholders, such action,
notice, demand or instruction may be taken or given by any Class A Noteholder,
unless such provision requires a specific percentage of Noteholders.

      (b) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be taken or given by Class A
Noteholders, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Class A Noteholders, in person or by
an agent duly appointed in writing.

      (c) The fact and date of the execution by any Class A Noteholder or any
Certificateholder of any instrument or writing may be proved in any reasonable
manner which the Trust Collateral Agent deems sufficient.

      (d) Any request, demand, authorization, direction, notice, consent,
waiver, or other act by a Class A Noteholder shall bind such Class A Noteholder
and every subsequent holder of such Class A Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trust Collateral Agent, the Seller or
the Servicer in reliance thereon, whether or not notation of such action is made
upon such Class A Note.

      (e) The Trust Collateral Agent may require such additional proof of any
matter referred to in this Section as it shall deem necessary.

      SECTION 11.12. Corporate Obligation.

No recourse may be taken, directly or indirectly, against any partner,
incorporator, subscriber to the capital stock, stockholder, director, officer or
employee of the Seller or the Servicer with respect to their respective
obligations and indemnities under this Agreement or any certificate or other
writing delivered in connection herewith.

      SECTION 11.13. Covenant Not to File a Bankruptcy Petition.

The parties hereto agree that until one year and one day after such time as the
Class A Notes issued under the Indenture are paid in full, they shall not (i)
institute the filing of a bankruptcy petition against the Seller or the Trust
based upon any claim in its favor arising hereunder or under the Basic
Documents; (ii) file a petition or consent to a petition seeking relief on
behalf of the Seller or the Trust under the Bankruptcy Law; or (iii) consent to
the appointment of a

                                       98
<PAGE>

receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
the Seller or the Trust or any portion of the property of the Seller or the
Trust. The parties hereto agree that all obligations of the Issuer and the
Seller are non-recourse to the Trust Property except as specifically set forth
in the Basic Documents.

      SECTION 11.14. Controlling Party. So long as any Class A Note is
outstanding, the Controlling Party shall have the power to exercise the voting,
consent and control rights granted to the Class A Noteholders, except as set
forth in Section 11.01 hereof; provided, however, that after the occurrence and
during the continuance of a Class A Insurer Default, all voting, consent or
control rights of the Class A Insurer shall be suspended and the Backup Insurer
shall be the Controlling Party. Upon the cure of a Class A Insurer Default, such
voting, consent and control rights shall be reinstated and the Backup Insurer
shall no longer be the Controlling Party. If the Backup Insurer is the
Controlling Party, after the occurrence and during the continuance of a Backup
Insurer Default, any voting, consent or control rights granted to the Backup
Insurer shall be suspended. Upon the cure of any such Backup Insurer Default,
the Backup Insurer's voting, consent and control rights shall be reinstated.

                                       99
<PAGE>

      IN WITNESS WHEREOF, the Issuer, Seller, Credit Acceptance, as Servicer and
in its individual capacity, Backup Servicer and the Trust Collateral Agent have
caused this Sale and Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.

                                  CREDIT ACCEPTANCE FUNDING
                                  LLC 2004-1, as Seller

                                  By:  ______________________________________
                                       Name:
                                       Title:

                                  CREDIT ACCEPTANCE CORPORATION, as Servicer
                                  and in its individual capacity

                                  By:  ______________________________________
                                       Name:
                                       Title:

                                      100
<PAGE>

                  [Sale and Servicing Agreement Signature Page]

                                      101
<PAGE>

                        CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1, as
                        Issuer

                        By: Wachovia Bank of Delaware, National Association, not
                        in its individual capacity but solely as Owner Trustee
                        on behalf of the Trust

                        By:_____________________________________________________
                           Name:
                           Title:

                        JPMORGAN CHASE BANK, as Trust Collateral Agent and
                        Indenture Trustee

                        By:_____________________________________________________
                           Name:
                           Title:

                        SYSTEMS & SERVICES TECHNOLOGIES, INC., as Backup
                        Servicer

                        By:_____________________________________________________
                           Name:
                           Title:

                [Sale and Servicing Agreement Signature Page 2]

                                      102
<PAGE>

                                                                       EXHIBIT A

                                   [Reserved.]

                                      A-1
<PAGE>

                                                                       EXHIBIT B

                 Credit Acceptance Auto Dealer Loan Trust 2004-1
                             Servicer's Certificate

                                      B-1
<PAGE>

                                                                       EXHIBIT C

                             Investor Certification
                             for Electronic Password

                                      Date:

JPMORGAN CHASE BANK

Attention: Corporate Trust Services -- Asset-Backed Administration
           Credit Acceptance Auto Dealer Loan Trust 2004-1

      In accordance with Section 5.11 of the Sale and Servicing Agreement dated
as of August 25, 2004 (the "Agreement"), by and among Credit Acceptance Funding
Corporation Trust 2004-1, as the Issuer, Credit Acceptance Funding LLC 2004-1,
as the Seller, Credit Acceptance Corporation, as the Servicer, JPMorgan Chase
Bank, as the Trust Collateral Agent, and Systems & Services Technologies, Inc.,
as the Backup Servicer, with respect to the Class A Asset Backed Notes (the
"Class A Notes") and the Asset Backed Certificates the ("Certificates"), the
undersigned hereby certifies and agrees as follows:

      1. The undersigned is a beneficial owner of $________ principal balance of
the Class A Notes.

      2. The undersigned is requesting a password pursuant to Section 5.11 of
the Agreement for access to certain information (the "Information") on the Trust
Collateral Agent's website.

      3. In consideration of the Trust Collateral Agent's disclosure to the
undersigned of the Information, or the password in connection therewith, the
undersigned will keep the Information confidential (except from such outside
persons are as are assisting it in connection with the related Notes, from its
accountants and attorneys, and otherwise from such governmental or banking
authorities or agencies to which the undersigned is subject), and such
Information will not, without the prior written consent of the Trust Collateral
Agent, be otherwise disclosed by the undersigned or by its officers, directors,
partners, employees, agents or representatives (collectively, the
"Representatives") in any manner whatsoever, in whole or in part.

      4. The undersigned will not use or disclose the Information in any manner
which could result in a violation of any provision of the Securities Act of
1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934,
as amended, or would require registration of any Class A Note pursuant to
Section 5 of the Securities Act.

      5. The undersigned shall be fully liable for any breach of this agreement
by itself or any of its Representatives and shall indemnify each of the parties
to the Agreement for

                                      C-1
<PAGE>

any loss, liability or expense incurred thereby with respect to any such breach
by the undersigned or any of its Representatives.

      6. Capitalized terms used but not defined herein shall have the respective
meanings assigned thereto in the Agreement.

      IN WITNESS WHEREOF, the undersigned has caused its name to be signed
hereby by its duly authorized officer, as of the day and year written above.

                                            ___________________________________
                                            Beneficial Owner

                                            By:_________________________________
                                            Title:______________________________
                                            Company:____________________________
                                            Phone:______________________________

                                      C-2
<PAGE>

                                                                       EXHIBIT D

                            FORM OF DEALER AGREEMENT

                                      D-1
<PAGE>

                                                                       EXHIBIT E

                                     FORM OF
                            SERVICER'S ACKNOWLEDGMENT

      Credit Acceptance Corporation (the "Servicer") under the Sale and
Servicing Agreement, dated as of August 25, 2004 (the "Sale and Servicing
Agreement") among Credit Acceptance Auto Dealer Loan Trust 2004-1, Credit
Acceptance Funding LLC 2004-1, JPMorgan Chase Bank, Systems & Services
Technologies, Inc. and Credit Acceptance Corporation, as the Servicer and in its
individual capacity, pursuant to which the Servicer holds on behalf of the Class
A Noteholders, the Class A Insurer, the Backup Insurer and the Trust Collateral
Agent certain [Dealer Agreements] [Contracts] as described in the Sale and
Servicing Agreement, hereby acknowledges receipt thereof, listed on Schedule A
to said Sale and Servicing Agreement except as noted in the Exception List
attached as Schedule I hereto.

      IN WITNESS WHEREOF, the Servicer has caused this acknowledgment to be
executed by its duly authorized officer as of this ____ day of __________, 20__.

                                            CREDIT ACCEPTANCE CORPORATION,
                                            as Servicer

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                      E-1
<PAGE>

                                                                       EXHIBIT F

                                FORM OF CONTRACTS

                                      F-1
<PAGE>

                                                                       EXHIBIT G

                              COLLECTION GUIDELINES

                                      G-1
<PAGE>

                                                                       EXHIBIT H

                                CREDIT GUIDELINES

                           [On file with the Servicer]

                                      H-1
<PAGE>

                                                                       EXHIBIT I

                           COVENANT COMPLIANCE REPORT

1.       Asset Coverage Ratio

         Consolidated Net Assets                                        $
         Consolidated Funded Debt
         Excess Net Assets                                              $
                                                                        -----
2.       Total Liabilities Ratio

         Consolidated Total Liabilities                                 $
         Consolidated Tangible Net Worth
         Ratio
                                                                        -----
         Permitted
                                                                        -----

3.       Minimum Tangible Net Worth

         Base Net Worth                                                 $
         80% Consolidated Net Income
         Minimum Tangible Net Worth                                     $
         Actual Consolidated Tangible Net Worth
         Excess Consolidated Tangible Net Worth                         $
                                                                        -----
4.       Fixed Charge Coverage Ratio

         Consolidated Net Income, as adjusted (last four quarters)      $
              Add:

              Income Taxes
              Interest
              Depreciation and Amortization
              Rent
                  Consolidated income available for fixed charges       $
              Fixed Charges:

              Interest                                                  $
              Rent
                  Total Fixed Charges                                   $
              Fixed Charge Coverage Ratio
              Allowable fixed charge coverage ratio

                                      I-1
<PAGE>

                                                                      SCHEDULE A
                                                                     to Sale and
                                                             Servicing Agreement

                  Dealer Loans, Dealer Agreements and Contracts

                                      A-1
<PAGE>

                                                                      SCHEDULE B
                                                                     to Sale and
                                                             Servicing Agreement

                             FORECASTED COLLECTIONS

<TABLE>
<CAPTION>
                                         CREDIT ACCEPTANCE
COLLECTION PERIOD                      FORECASTED COLLECTIONS
-----------------                      ----------------------
<S>                                    <C>
    Jul-04                                   11,362,125
    Aug-04                                   11,189,429
    Sep-04                                   10,941,809
    Oct-04                                   10,691,403
    Nov-04                                   10,416,844
    Dec-04                                   10,142,136
    Jan-05                                    9,862,100
    Feb-05                                    9,559,223
    Mar-05                                    9,206,020
    Apr-05                                    8,862,697
    May-05                                    8,530,931
    Jun-05                                    8,174,849
    Jul-05                                    7,806,554
    Aug-05                                    7,454,739
    Sep-05                                    7,078,852
    Oct-05                                    6,780,099
    Nov-05                                    6,429,626
    Dec-05                                    6,086,504
    Jan-06                                    5,785,415
    Feb-06                                    5,464,658
    Mar-06                                    5,091,838
    Apr-06                                    4,749,266
    May-06                                    4,425,381
    Jun-06                                    4,110,990
    Jul-06                                    3,735,723
    Aug-06                                    3,357,937
    Sep-06                                    3,051,996
    Oct-06                                    2,785,597
    Nov-06                                    2,544,986
    Dec-06                                    2,296,996
    Jan-07                                    2,031,341
    Feb-07                                    1,759,906
    Mar-07                                    1,351,943
    Apr-07                                    1,035,298
    May-07                                      834,566
    Jun-07                                      654,149
    Jul-07                                      606,925
    Aug-07                                      606,216
    Sep-07                                      605,375
</TABLE>

                                      B-1
<PAGE>

<TABLE>
<CAPTION>
                                          CREDIT ACCEPTANCE
COLLECTION PERIOD                       FORECASTED COLLECTIONS
-----------------                       ----------------------
<S>                                     <C>
    Oct-07                                      604,894
    Nov-07                                      603,946
    Dec-07                                      603,608
    Jan-08                                      603,091
    Feb-08                                      601,761
    Mar-08                                      595,660
    Apr-08                                      589,164
    May-08                                      583,734
    Jun-08                                      578,465
    Jul-08                                      570,405
    Aug-08                                      561,400
    Sep-08                                      551,239
    Oct-08                                      541,522
    Nov-08                                      532,343
    Dec-08                                      525,643
    Jan-09                                      518,623
    Feb-09                                      510,975
    Mar-09                                      499,325
    Apr-09                                      490,049
    May-09                                      483,132
    Jun-09                                      478,938
    Jul-09                                      478,071
    Aug-09                                      471,318
    Sep-09                                      463,135
    Oct-09                                      453,561
    Nov-09                                      440,065
    Dec-09                                      432,527
    Jan-10                                      430,535
    Feb-10                                      421,234
    Mar-10                                      402,537
    Apr-10                                      382,354
    May-10                                      366,629
    Jun-10                                      346,031
    Jul-10                                      336,824
    Aug-10                                      332,239
    Sep-10                                      300,461
    Oct-10                                      285,911
    Nov-10                                      242,974
    Dec-10                                      224,440
    Jan-11                                      222,082
    Feb-11                                      164,648
    Mar-11                                       99,899
    Apr-11                                       85,295
    May-11                                       59,044
    Jun-11                                       47,416
</TABLE>

                                      B-2
<PAGE>

                                                                      SCHEDULE C
                                                                     to Sale and
                                                             Servicing Agreement

              PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

      In addition to the representations, warranties and covenants contained in
the Agreement, the Seller hereby represents, warrants, and covenants to the
Trust and the Indenture Trustee as follows on the Closing Date and on each
Distribution Date on which the Trust purchases Dealer Loans, in each case only
with respect to the Seller Property conveyed to the Trust on such Closing Date
or the relevant Distribution Date:

                                     GENERAL

1.    The Agreement creates a valid and continuing security interest (as defined
in UCC Section 9-102) in the Seller Property in favor of the Trust, which
security interest is prior to all other Liens, and is enforceable as such as
against creditors of and purchasers from and assignees of the Seller.

2.    Each Contract constitutes "tangible chattel paper" or a "payment
intangible", within the meaning of UCC Section 9-102. Each Dealer Loan
constitutes a "payment intangible" or a "general intangible" within the meaning
of UCC Section 9-102.

3.    Each Dealer Agreement constitutes either a "general intangible" or
"tangible chattel paper" within the meaning of UCC Section 9-102.

4.    The Seller has taken or will take all steps necessary actions with respect
to the Dealer Loans to perfect its security interest in the Dealer Loans and in
the property securing the Dealer Loans.

                                    CREATION

1.    The Seller owns and has good and marketable title to the Initial Seller
Property or Subsequent Seller Property, as applicable, free and clear of any
Lien, claim or encumbrance of any Person, excepting only liens for taxes,
assessments or similar governmental charges or levies incurred in the ordinary
course of business that are not yet due and payable or as to which any
applicable grace period shall not have expired, or that are being contested in
good faith by proper proceedings and for which adequate reserves have been
established, but only so long as foreclosure with respect to such a lien is not
imminent and the use and value of the property to which the Lien attaches is not
impaired during the pendency of such proceeding.

                                   PERFECTION

1.    The Seller has caused or will have caused, within ten days after the
effective date of the Indenture, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the contribution and sale of the Contributed
Property from the Originator to the Seller, the transfer and sale of the Seller
Property

                                      C-1
<PAGE>

from the Seller to the Issuer, and the security interest in the Collateral
granted to the Indenture Trustee under the Indenture.

2.    With respect to Seller Property that constitutes tangible chattel paper,
such tangible chattel paper is in the possession of the Servicer, in its
capacity as custodian for the Trust and the Trust Collateral Agent, and the
Trust Collateral Agent has received a written acknowledgment from the Servicer,
in its capacity as custodian, that it is holding such tangible chattel paper
solely on its behalf and for the benefit of the Trust Collateral Agent, the
Seller, the Trust and the relevant Dealer(s). All financing statements filed or
to be filed against the Seller in favor of the Issuer or its assignee in
connection with this Agreement describing the Seller Property contain a
statement to the following effect: "A purchase of or security interest in any
collateral described in this financing statement will violate the rights of the
Secured Party."

                                    PRIORITY

1.    Other than the security interest granted to the Issuer pursuant to this
Agreement, the Seller has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Seller Property. None of the
Originator, the Servicer nor the Seller has authorized the filing of, or is
aware of any financing statements against either the Seller, the Originator or
the Trust that includes a description of the Seller Property and proceeds
related thereto other than any financing statement: (i) relating to the sale of
Contributed Property by the Originator to the Seller under the Contribution
Agreement, (ii) relating to the security interest granted to the Trust
hereunder, (iii) relating to the security interest granted to the Trust
Collateral Agent under the Indenture; or (iv) that has been terminated or
amended to reflect a release of the Seller Property.

2.    Neither the Seller, the Originator nor the Trust is aware of any judgment,
ERISA or tax lien filings against either the Seller, the Originator or the
Trust.

3.    None of the tangible chattel paper that constitutes or evidences the
Contracts or the Dealer Agreements has any marks or notations indicating that it
has been pledged, assigned or otherwise conveyed to any Person other than the
Originator, the Servicer, the Seller, the Trust, a collection agent or the Trust
Collateral Agent.

                     SURVIVAL OF PERFECTION REPRESENTATIONS

1.    Notwithstanding any other provision of the Agreement, the Contribution
Agreement, the Indenture or any other Basic Document, the Perfection
Representations, Warranties and Covenants contained in this Schedule shall be
continuing, and remain in full force and effect (notwithstanding any replacement
of the Servicer or termination of Servicer's rights to act as such) until such
time as all obligations under the Sale and Servicing Agreement, Contribution
Agreement and the Indenture have been finally and fully paid and performed.

                                    NO WAIVER

1.    The parties hereto: (i) shall not, without obtaining a confirmation of the
then-current ratings of the Class A Notes (without giving effect to the Class A
Note Insurance Policy or the Backup Insurance Policy), waive any of the
Perfection Representations, Warranties or Covenants; (ii) shall provide the
Rating Agencies with prompt written notice of any breach of the

                                      C-2
<PAGE>

Perfection Representations, Warranties or Covenants, and shall not, without
obtaining a confirmation of the then-current ratings of the Class A Notes
(without giving effect to the Class A Note Insurance Policy or the Backup
Insurance Policy) as determined after any adjustment or withdrawal of the
ratings following notice of such breach) waive a breach of any of the Perfection
Representations, Warranties or Covenants.

                                      C-3
<PAGE>

                                                                      SCHEDULE D
                                                                     to Sale and
                                                             Servicing Agreement

                               FINANCIAL COVENANTS
                             AND RELATED DEFINITIONS

1.    Maintain Asset Coverage Ratio. Credit Acceptance shall, on a Consolidated
basis, maintain at all times, Consolidated Net Assets at a level greater than or
equal to Consolidated Funded Debt.

2.    Maintain Total Liabilities Ratio Level. Credit Acceptance shall, on a
Consolidated basis, maintain as of the end of each fiscal quarter a ratio of
Consolidated Total Liabilities (including in the calculation thereof, all Debt
incurred by a Special Purpose Subsidiary, whether or not included therein under
GAAP) to Credit Acceptance's Consolidated Tangible Net Worth equal to or less
than 1.75 to 1.0.

3.    Minimum Tangible Net Worth. Credit Acceptance shall, on a Consolidated
basis, maintain Consolidated Tangible Net Worth of not less than Two Hundred
Twenty Million Dollars ($220,000,000), plus the sum of (i) eighty percent (80%)
of Consolidated Net Income for each fiscal quarter of Credit Acceptance (A)
beginning on or after April 1, 2004, (B) ending on or before the applicable date
of determination thereof, and (C) for which Consolidated Net Income as
determined above is a positive amount and (ii) the Equity Offering Adjustment.

4.    Maintain Fixed Charge Coverage Ratio Liabilities. Credit Acceptance shall,
on a Consolidated basis, maintain as of the end of each fiscal quarter a Fixed
Charge Coverage Ratio of not less than 2.50 to 1.0.

                                   DEFINITIONS

Other than the term "Credit Acceptance," which shall have the meaning given to
it in this Sale and Servicing Agreement, capitalized terms used in this Schedule
D shall have the meanings given such terms in the Comerica Credit Agreement as
in effect on the date of this Sale and Servicing Agreement.

                                      D-1

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