Document:

<PAGE>
                                                                EXHIBIT 4(f)(49)

                             INTERCREDITOR AGREEMENT

         This Intercreditor Agreement (this "Agreement"), dated June 27, 2003,
is among Credit Acceptance Corporation ("CAC"), CAC Warehouse Funding Corp.,
Credit Acceptance Funding LLC 2003-1, Credit Acceptance Auto Dealer Loan Trust
2003-1 (the "2003-1 Trust"), Wachovia Securities, LLC (f/k/a Wachovia
Securities, Inc.), as agent under the Wachovia Securitization Documents (as
hereinafter defined) ("Wachovia"), JPMorgan Chase Bank, as trustee under the
2003-1 Securitization Documents (as hereinafter defined) (the "Trustee"),
Comerica Bank, as agent under the CAC Credit Facility Documents (as hereinafter
defined) ("Comerica"), and each other creditor who becomes a party hereto after
the date hereof.

                                   BACKGROUND

         A.       Pursuant to the terms of the various Dealer Agreements between
CAC and the Dealers, Collections from a particular Pool are first used to pay
certain collection costs, CAC's servicing fee and to pay back the Pool's Advance
balance. After the Advance balance under such Pool has been reduced to zero, the
Dealer to whom the Pool relates has a contractual right under the related Dealer
Agreement to receive a portion of any further Collections with respect to the
Pool (such portion of further Collections otherwise payable to the Dealer is
referred to herein as "Back-end Dealer Payments"), subject to CAC's right of
offset as described in paragraph F below.

         B.       CAC has granted a security interest in CAC's rights with
respect to its Pools (to the extent not released) and related assets generally
under the CAC Credit Facility Documents to Comerica, as collateral agent for the
banks which are parties thereto.

         C.       CAC and Wachovia have entered into a transaction as set forth
in the Wachovia Securitization Documents (the "Wachovia Securitization")
pursuant to which the security interest with respect to certain specifically
identified Pools and related assets was released by Comerica, CAC contributed
such Pools and related assets to its wholly-owned subsidiary, CAC Warehouse
Funding Corp., and CAC Warehouse Funding Corp. granted Wachovia a security
interest in CAC Warehouse Funding Corp.'s rights to such Pools and related
assets (such Pools and related assets are referred to herein as the "Wachovia
Pools").

         D.       CAC and the Trustee are entering into a transaction as set
forth in the 2003-1 Securitization Documents (the "2003-1 Securitization")
pursuant to which the security interest with respect to certain specifically
identified Pools and related assets is being released by Comerica, CAC is
contributing such Pools and related assets to its wholly-owned subsidiary,
Credit Acceptance Funding LLC 2003-1, who is subsequently selling such Pools and
related assets to the 2003-1 Trust, a trust the depositor of which is Credit
Acceptance Funding LLC 2003-1, and the 2003-1 Trust is granting the Trustee a
security interest in its right, title and interest in and to such Pools and
related assets (such Pools and related assets are referred to herein as the
"2003-1 Pools").

         E.       Comerica retains a security interest in Pools and related
assets which have not been released pursuant to the Wachovia Securitization, and
which security interest is not being

                                       1.

<PAGE>

released, and has not been granted to the Trustee, pursuant to the 2003-1
Securitization (such unreleased Pools and related assets are referred to herein
as the "Comerica Pools").

         F.       The Dealer Agreements permit CAC and its assignees, under
certain circumstances, to set off any Collections received with respect to any
Pool of a Dealer against Advances under other Pools of that Dealer and such set
off rights are authorized and permitted under the 2003-1 Securitization
Documents.

         G.       The parties hereto acknowledge that the rights of CAC or its
assigns, pursuant to the Dealer Agreements, to set off Collections received with
respect to a Pool against the outstanding balance under any other Pool are not
intended, and should not be permitted, to be used to prejudice the collateral
position of any of the parties hereto, and therefore the exercise of such rights
should be limited to Back-end Dealer Payments.

         In consideration of the mutual premises and promises set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:

                                   AGREEMENTS

         1.       Confirmation. Notwithstanding any statement or provision
contained in the Financing Documents or otherwise to the contrary, and
irrespective of the time, order or method of attachment or perfection of
security interests granted pursuant to the Financing Documents, respectively, or
the time or order of filing or recording of any financing statements, or other
notices of security interests, liens or other interests granted pursuant to the
Financing Documents, respectively, or the giving of or failure to give notice of
the acquisition or expected acquisition of purchase money or other security
interests, and irrespective of anything contained in any filing or agreement to
which any Creditor may now or hereafter be a party and irrespective of the
ordinary rules for determining priority under the Uniform Commercial Code or
under any other law governing the relative priorities of secured creditors,
subject, however, to the terms and conditions of this Agreement:

         (a)      RELEASE BY WACHOVIA. Wachovia (i) releases any and all rights
in and to any Collections with respect to the Comerica Pools or the 2003-1 Pools
or in any Back-end Dealer Payments; provided, that no release shall have been
granted with respect to amounts collected under any Pools which Back-end Dealer
Payments that have been set off by CAC or by Comerica pursuant to the CAC Credit
Facility Documents against amounts owing under the Wachovia Pools, and (ii)
relinquishes all rights it has or may have to require CAC, individually or as
servicer, any successor servicer or CAC Warehouse Funding Corp. to use
Collections on its behalf contrary to clause (a)(i). Wachovia agrees that the
lien and security interest granted to it pursuant to the Wachovia Securitization
Documents to which it is a party does not and shall not attach to any Comerica
Pools or 2003-1 Pools (or related Collections) or to any Back-end Dealer
Payments and shall not assert any claim thereto.

         (b)      RELEASE BY THE TRUSTEE. The Trustee (i) releases any and all
rights in and to any Collections with respect to the Comerica Pools or the
Wachovia Pools or in any Back-end Dealer Payments; provided, that no release
shall have been granted with respect to amounts collected

                                       2.

<PAGE>

under any Pools which Back-end Dealer Payments that have been set off by CAC or
by Comerica pursuant to the CAC Credit Facility Documents against amounts owing
under the 2003-1 Pools, and (ii) relinquishes all rights it has or may have to
require CAC, individually or as servicer, any successor servicer or Credit
Acceptance Funding LLC 2003-1 or Credit Acceptance Auto Dealer Loan Trust 2003-1
to use Collections on its behalf contrary to clause (b)(i). The 2003-1 Trust
agrees that the lien and security interest granted to the Trustee pursuant to
the 2003-1 Securitization Documents to which it is a party does not and shall
not attach to any Comerica Pools or Wachovia Pools (or related Collections) or
to any Back-end Dealer Payments and shall not assert any claim thereto.

         (c)      RELEASE BY COMERICA. Comerica (i) releases any and all rights
in and to any Collections with respect to the Wachovia Pools and the 2003-1
Pools, other than amounts collected under the Wachovia Pools or the 2003-1 Pools
which are owed to Dealers as Back-end Dealer Payments and which are subject to
set off by CAC pursuant to the related Dealer Agreement and which have not been
set off by CAC or by Comerica pursuant to the CAC Credit Facility Documents
against amounts owing under the Wachovia Pools or the 2003-1 Pools, and (ii)
relinquishes all rights it has or may have to require CAC, individually or as
servicer, or any successor servicer to use Collections on its behalf contrary to
clause (c)(i). Except for Back-end Dealer Payments to the extent provided in
(c)(i), Comerica agrees that the lien and security interest granted to it
pursuant to the CAC Credit Facility Documents does not and shall not attach to
any Wachovia Pools or 2003-1 Pools and shall not assert any claim against the
Wachovia Pools or the 2003-1 Pools or Collections related thereto.

         2.       Covenant of the CAC Entities.

         (a)      Each of the CAC Entities covenants that it shall not use any
right it may have under the Dealer Agreements, whether at the direction of
Comerica, Wachovia or the Trustee or otherwise, to set off any Collections,
other than amounts which are owed to Dealers as Back-end Dealer Payments, from
one Pool against amounts owed under another Pool encumbered in favor of another
Creditor.

         (b)      Each of the CAC Entities covenants that it will require any
other person or entity which hereafter acquires any security interest in the
Pools, Dealer Agreements and related assets from a CAC Entity to become parties
to this Agreement by executing an amendment or acknowledgment, in form and
substance reasonably satisfactory to CAC and the Creditors, by which such
persons or entities agree to be bound by the terms of this Agreement, and
delivering such signed amendment or acknowledgement hereof to each of the CAC
Entities and the Creditors; provided, however, that in the event the amount owed
by the CAC Entities to any Creditor shall be reduced to zero and such Creditor
shall have no obligation or agreement to make any further advances to any CAC
Entity, such Creditor shall have no rights under this Section 2(b).

         3.       Turnover of Proceeds. The parties hereto agree that if, at any
time, a Creditor (a "Receiving Creditor") (x) receives any payment,
distribution, security or the proceeds thereof to which another Creditor or
Creditors shall, under the terms of Section 1 of this Agreement, be entitled and
(y) the Receiving Creditor either (A) had actual knowledge, at the time of such
receipt, that such payment, distribution or proceeds were wrongfully received by
it or (B) another

                                       3.

<PAGE>

Creditor or Creditors shall have given written notice to the Receiving Creditor,
prior to such receipt, of its good faith belief that such payments,
distributions or proceeds are being misapplied, and such notice contains
evidence reasonably satisfactory to the Receiving Creditor of such
misapplication then such Receiving Creditor shall receive and hold the same
separately and in trust for the benefit of, and shall forthwith pay over and
deliver the same to the relevant Creditor. For purposes of the foregoing, the
actual knowledge of the Trustee shall be determined based on the actual
knowledge of the Trustee's Responsible Officers (as defined the Indenture dated
as of June 27, 2003 between the Trustee and the 2003-1 Trust), it being
understood that each such Responsible Officer shall have no duty to make any
inquiry regarding the propriety of any payment, distribution or proceed.

         4.       Further Assurances. Each Creditor and CAC Entity agrees that
it shall be bound by all of the provisions of this Agreement. Without limiting
any other provision hereof, each of the Creditors and CAC Entities agrees that
it will promptly execute such instruments, notices or other documents as may be
reasonably requested in writing by any party hereto for the purpose of
confirming the provisions of this Agreement or better effectuating the intent
hereof. CAC will reimburse each Creditor for all reasonable expenses incurred by
such Creditor pursuant to this Section 4.

         5.       Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
regard to its conflicts of laws rules. Each of the parties hereto agrees to the
non-exclusive jurisdiction of any federal court located within the State of New
York. Each of the Parties hereto hereby waives any objection based on forum non
conveniens, and any objection to venue of any action instituted hereunder in any
of the aforementioned courts and consents to the granting of such legal or
equitable relief as is deemed appropriate by such court.

         6.       Counterparts. This Agreement may be executed in two or more
counterparts including facsimile transmission thereof (and by different parties
on separate counterparts), each of which shall be an original, but all of which
together shall constitute one of the same instrument.

         7.       Severability. If any one or more of the covenants, agreements,
provisions or terms of this Agreement shall for any reason whatsoever be 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.

         8.       No Proceedings. Each of the parties hereto hereby agrees that
it will not institute against, or join any other person in instituting against
CAC Warehouse Funding Corp., Credit Acceptance Funding LLC 2003-1 or Credit
Acceptance Auto Dealer Loan Trust 2003-1, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any federal or state bankruptcy or similar law so long as there shall not have
elapsed one year and one day after there are no remaining amounts owed to any of
the Creditors by any of the CAC Entities pursuant to the Wachovia Securitization
Documents and the 2003-1 Securitization Documents.

                                       4.

<PAGE>

         9.       Amendment. This Agreement and the rights and obligations of
the parties hereunder may not be changed orally, but only by an instrument in
writing executed by all of the parties hereto; provided further that if the
amount owed by the CAC Entities to any Creditor shall be reduced to zero and
such Creditor shall have no obligation or agreement to make any further advances
to any CAC Entity, this Agreement may be amended by the other parties hereto
without the consent of such Creditor.

         10.      Capitalized Terms. Capitalized terms used but not otherwise
defined herein shall have the meaning set forth in Appendix A attached hereto
and made part of this Agreement.

         11.      No Third Party Beneficiaries. This Agreement is not intended
to confer upon any person other than the parties hereto any rights or remedies
hereunder.

         12.      Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of each of the parties hereto and their respective
successors and assigns, including any successor or assignor trustee under the
2003-1 Securitization Documents. On or about July 1, 2003, certain businesses of
Wachovia Securities, LLC ("WSL") will be transferred, assigned or otherwise
conveyed (the occurrence of such event, the "Transfer") to Wachovia Capital
Markets, LLC or another newly formed affiliate of WSL ("WCM"). Each of the
parties hereto expressly consents to the assignment by WSL of all of its rights
and obligations hereunder to WCM simultaneous with the Transfer. Each of the
parties acknowledges and agrees that upon the occurrence of the Transfer, such
assignment shall be effective without any further action by any of the parties
hereto and from and after the Transfer: (i) WCM shall be a party hereto and
shall have all rights and obligations of WSL hereunder and (ii) WSL shall cease
to be a party hereto and shall be released from its obligations hereunder.

         13.      Notices. Except as otherwise provided herein, all notices or
demand hereunder to the parties hereto shall be sufficient if made in writing,
and either: (i) sent via certified or registered mail (or the equivalent
thereof), postage prepaid, (ii) delivered by messenger or overnight courier, or
(iii) transmitted via facsimile with a confirmation of the receipt thereof.
Notice shall be deemed to be given for purposes of this Agreement on the day of
receipt. Unless otherwise specified in a notice sent or delivered in accordance
with the foregoing provisions of this Section, notices, demands and other
communications in writing shall be given to or made upon the respective parties
hereto: (a) in the case of any of the CAC Entities, to Silver Triangle Building,
25505 West Twelve Mile Road, Southfield, Michigan 48034-8339, Attention: James
D. Murray, Jr., telephone: (248) 353-2700 (ext. 884), facsimile: (248) 827-8542;
(b) in the case of Wachovia, to One Wachovia Center, Charlotte, North Carolina
28288-0610, Attention: Conduit Administration, telephone: (704) 383-9343,
facsimile: (704) 383-9579; (c) in the case of the Trustee, to its Corporate
Trust Office, 4 New York Plaza, 6th Floor, New York, NY 10024, Attention:
Institutional Trust Services/Structured Finance, telephone: (212) 623-5600,
facsimilie: (212) 623-5932; and (d) in the case of Comerica, to One Detroit
Center, 6th Floor, 500 Woodward Avenue, Detroit, Michigan 48226, Attention:
Scott Dorn, telephone: (313) 222-5868, facsimile: (313) 222-7475.

         14.      Termination. Each party's rights and obligations under this
agreement shall terminate at the time all amounts due to or owed by such party
have been paid in full and such party's applicable Financing Documents have been
terminated so long as each party whose rights

                                       5.

<PAGE>

and obligations are subject to termination pursuant to this Section 14 (i) has
no actual knowledge or written notice of payments, distributions, security or
the proceeds thereof to which another Creditor or Creditors is entitled, as
provided in Section 3, and (ii) has not received a written notice from the Agent
under the CAC Credit Facility Documents that there is a Default or an Event of
Default (as such terms are defined therein) at the time of the termination of
the applicable Financing Documents..

         15.      Termination of Prior Agreement. This Agreement is intended to
supersede the Prior Agreement in its entirety. Each of Comerica, Wachovia and
the CAC Entities that were parties to the Prior Agreement further acknowledge
and agree that, as among themselves, this Agreement supersedes the Prior
Agreement with respect to their rights as against each other and that this
Agreement shall govern their rights against each other and the other parties
hereto.

                            [signature page follows]

                                       6.

<PAGE>

         This Intercreditor Agreement has been executed and delivered by the
parties hereto on June 27, 2003.

CREDIT ACCEPTANCE CORPORATION               WACHOVIA SECURITIES, LLC, AS AGENT

/S/ Douglas W. Busk                         /S/ Prakash B. Wadhwani
----------------------------------          -------------------------------
BY: Douglas W. Busk                         BY: Prakash B. Wadhwani
TITLE: Chief Financial Officer &            TITLE: Vice President
 Treasurer

JPMORGAN CHASE BANK, NOT IN ITS             COMERICA BANK, AS AGENT
INDIVIDUAL CAPACITY BUT SOLELY AS
TRUSTEE                                     /S/ Scott Dorn
                                            -------------------------------
/S/ Esther D. Antoine                       BY: Scot Dorn
----------------------------------          TITLE: Assistant Vice President
BY: Esther D. Antoine
TITLE: Trust Officer                        CREDIT ACCEPTANCE FUNDING LLC 2003-1

CAC WAREHOUSE FUNDING CORP.                 /S/ Douglas W. Busk
                                            -------------------------------
/S/ Douglas W. Busk                         BY: Douglas W. Busk
----------------------------------          TITLE: VP Finance & Treasurer
BY: Douglas W. Busk
TITLE: Chief Financial Officer &
 Treasurer

CREDIT ACCEPTANCE AUTO DEALER
LOAN TRUST 2003-1

BY: WACHOVIA BANK OF DELAWARE, NATIONAL
ASSOCIATION, NOT IN ITS INDIVIDUAL
CAPACITY BUT SOLELY AS OWNER TRUSTEE

/S/ Sterling C. Correia
----------------------------------
BY: Sterling C. Correia
TITLE: Vice President

                   [Signature Page to Intercreditor Agreement]

                                       7.

<PAGE>

                                   APPENDIX A

                                   DEFINITIONS

         2003-1 Securitization Documents: The Sale and Serving Agreement dated
as of June 27, 2003 among Credit Acceptance Auto Dealer Loan Trust 2003-1,
Credit Acceptance Funding LLC 2003-1, CAC, the Trustee, and Systems & Services
Technologies, Inc., the Indenture dated as of June 27, 2003 between the Trustee
and the 2003-1 Trust, and the documents related thereto.

         Advance: Amounts advanced to a Dealer upon the acceptance of a Contract
by CAC pursuant to a Dealer Agreement.

         CAC Credit Facility Documents: The Second Amended and Restated Credit
Acceptance Corporation Credit Agreement, dated as of June 9, 2003, as amended,
by and among the Banks signatory thereto, Comerica Bank, CAC, Credit Acceptance
Corporation UK Limited, CAC of Canada Limited and Credit Acceptance Corporation
Ireland Limited and the documents related thereto.

         CAC Entities: Each of CAC, CAC Warehouse Funding Corp., Credit
Acceptance Funding LLC 2003-1 and Credit Acceptance Auto Dealer Loan Trust
2003-1.

         Collections: All money, amounts or other payments received or collected
by CAC, individually or as servicer, or any successor servicer or any other CAC
Entity with respect to a Contract in the form of cash, checks, wire transfers or
other form of payment in accordance with the Contracts or the Dealer Agreements,
including, without limitation, with respect to a Pool amounts collected under
any other Pool which are Back-end Dealer Payments that have been set off by CAC
or by Comerica pursuant to the CAC Credit Facility Documents, against amounts
owing under such Pool.

         Contract: A retail installment contract for the sale of new or used
motor vehicles assigned outright by Dealers to CAC or a subsidiary of CAC or
written by Dealers in the name of CAC or a subsidiary of CAC (and funded by CAC
or such subsidiary) or assigned by Dealers to CAC or a subsidiary of CAC, as
nominee for the Dealer, for administration, servicing, and Collection, in each
case pursuant to an applicable Dealer Agreement.

         Creditor: Each of Comerica, Wachovia and the Trustee.

         Dealer: A person engaged in the business of the retail sale or lease of
new or used motor vehicles, including both businesses exclusively selling used
motor vehicles and businesses principally selling new motor vehicles, but having
a used vehicle department, including any such person which constitutes an
affiliate of CAC.

         Dealer Agreement: The sales and/or servicing agreements between CAC or
its subsidiaries and a participating Dealer which sets forth the terms and
conditions under which CAC or its subsidiaries (i) accepts, as nominee for such
Dealer, the assignment of Contracts for purposes of administration, servicing
and collection and under which CAC

                                       8.

<PAGE>

or its subsidiary may make Advances to such Dealers and (ii) accepts outright
assignments of Contracts from Dealers or funds Contracts originated by such
Dealer in the name of CAC or any of its subsidiaries, in each case as such
agreements may be in effect from time to time.

         Financing Documents: The CAC Credit Facility Documents, the Wachovia
Securitization Documents and the 2003-1 Securitization Documents.

         Pool: A grouping on the books and records of CAC or any of its
subsidiaries of Advances, Contracts originated or to be originated with CAC or
any of its subsidiaries by a Dealer and bearing the same pool identification
number assigned by CAC's computer system.

         Prior Agreement: The Intercreditor Agreement dated September 27, 2002
among CAC, CAC Warehouse Funding Corp., CAC Funding Corp., Bank of America,
N.A., Wachovia and Comerica.

         Wachovia Securitization Documents: The Loan and Security Agreement
dated as of September 27, 2002 among CAC Warehouse Funding Corp., CAC, the
Investors named therein, Variable Funding Capital Corporation, Wachovia
Securities, LLC (f/k/a Wachovia Securities, Inc.), Wachovia Bank, National
Association and OSI Portfolio Services, Inc. and the documents related thereto.

                                       9.<PAGE>

                                                                EXHIBIT 4(f)(50)

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

                 CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2003-1
                           CLASS A ASSET BACKED NOTES

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

                CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2003-1,
                                  as the Issuer

                      CREDIT ACCEPTANCE FUNDING LLC 2003-1,
                                  as the Seller

                         CREDIT ACCEPTANCE CORPORATION,
                                 as the Servicer

                              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 June 27, 2003

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

<PAGE>

                                TABLE OF CONTENTS

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

   SECTION 1.01.           Definitions..................................................................................         1
   SECTION 1.02.           Usage of Terms...............................................................................        22
   SECTION 1.03.           Closing Date and Record Date.................................................................        22
   SECTION 1.04.           Section References...........................................................................        22
   SECTION 1.05.           Compliance Certificates......................................................................        22
   SECTION 1.06.           Directions...................................................................................        22

ARTICLE II            CONVEYANCE OF SELLER PROPERTY; FURTHER ENCUMBRANCE THEREOF........................................        22

   SECTION 2.01.           Sale of the Initial Seller Property to the Trust.............................................        22
   SECTION 2.02.           Revolving Period; Principal Collection Account...............................................        23
   SECTION 2.03.           Title to Trust Property......................................................................        26

ARTICLE III           THE DEALER LOANS AND THE CONTRACTS................................................................        27

   SECTION 3.01.           Representations and Warranties of Seller with respect to the Seller Property.................        27
   SECTION 3.02.           Payment Upon Breach..........................................................................        29
   SECTION 3.03.           Custody of Dealer Agreements and Contract Files..............................................        30

ARTICLE IV            ADMINISTRATION AND SERVICING OF DEALER LOANS AND CONTRACTS........................................        33

   SECTION 4.01.           Appointment; Duties of Servicer..............................................................        33
   SECTION 4.02.           Collection and Application of Payments on the Dealer Loans and Contracts.....................        35
   SECTION 4.03.           Realization Upon Contracts...................................................................        36
   SECTION 4.04.           Physical Damage Insurance....................................................................        36
   SECTION 4.05.           Maintenance of Security Interests in Financed Vehicles.......................................        36
   SECTION 4.06.           Covenants of Servicer........................................................................        36
   SECTION 4.07.           Payments in Respect of Contracts Upon Breach.................................................        41
   SECTION 4.08.           Servicer Fee.................................................................................        42
   SECTION 4.09.           Servicer's Certificate.......................................................................        42
   SECTION 4.10.           Annual Statement as to Compliance; Notice of Default.........................................        44
   SECTION 4.11.           Annual Independent Certified Public Accountant's Report......................................        44
   SECTION 4.12.           Access to Certain Documentation and Information Regarding Dealer Loans and Contracts.........        45
   SECTION 4.13.           Servicer Expenses............................................................................        45
   SECTION 4.14.           Servicer Not to Resign as Servicer...........................................................        45
   SECTION 4.15.           The Backup Servicer..........................................................................        46
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                                                             <C>
   SECTION 4.16.           Fidelity Bond................................................................................        46

ARTICLE V             TRUST ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS...................        47

   SECTION 5.01.           Establishment of Trust Accounts..............................................................        47
   SECTION 5.02.           Collections; Allocation......................................................................        49
   SECTION 5.03.           Certain Reimbursements to the Servicer.......................................................        50
   SECTION 5.04.           Additional Deposits..........................................................................        50
   SECTION 5.05.           Reserve Account..............................................................................        50
   SECTION 5.06.           Reserved.....................................................................................        52
   SECTION 5.07.           Payments under the Class A Note Insurance Policy.............................................        52
   SECTION 5.08.           Transfers and Distributions..................................................................        53
   SECTION 5.09.           Distributions from the Class A Note Distribution Account.....................................        54
   SECTION 5.10.           Certificate Distribution Account.............................................................        55
   SECTION 5.11.           Statements to Certificateholders and Noteholders.............................................        56

ARTICLE VI            THE SELLER AND THE ISSUER.........................................................................        58

   SECTION 6.01.           Representations and Warranties of the Seller.................................................        58
   SECTION 6.02.           Limitation on Liability of Seller and Others.................................................        61
   SECTION 6.03.           Seller May Own Notes.........................................................................        62
   SECTION 6.04.           Additional Covenants of the Seller...........................................................        62
   SECTION 6.05.           Indemnities of the Issuer....................................................................        63

ARTICLE VII           THE SERVICER......................................................................................        64

   SECTION 7.01.           Representations of Servicer..................................................................        64
   SECTION 7.02.           Indemnities of Servicer......................................................................        67
   SECTION 7.03.           Merger or Consolidation of, or Assumption of the Obligations of, Servicer; Resignation.......        69
   SECTION 7.04.           Limitation on Liability of Servicer and Others...............................................        69
   SECTION 7.05.           Delegation of Duties.........................................................................        70
   SECTION 7.06.           Certification Upon Satisfaction..............................................................        70

ARTICLE VIII          DEFAULT...........................................................................................        70

   SECTION 8.01.           Servicer Defaults............................................................................        70
   SECTION 8.02.           Appointment of Successor.....................................................................        72
   SECTION 8.03.           Notification to Class A Noteholders and Certificateholders...................................        74
   SECTION 8.04.           Waiver of Past Defaults......................................................................        74

ARTICLE IX            THE TRUST COLLATERAL AGENT........................................................................        74

   SECTION 9.01.           Duties of the Trust Collateral Agent.........................................................        74
   SECTION 9.02.           Rights of the Trust Collateral Agent.........................................................        76
   SECTION 9.03.           Individual Rights of Trust Collateral Agent..................................................        77
   SECTION 9.04.           Reports by Trust Collateral Agent to Holders.................................................        77
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                                             <C>
   SECTION 9.05.           Compensation.................................................................................        77
   SECTION 9.06.           Eligibility..................................................................................        78
   SECTION 9.07.           Trust Collateral Agent's Disclaimer..........................................................        78
   SECTION 9.08.           Limitation on Liability......................................................................        79
   SECTION 9.09.           Reliance Upon Documents......................................................................        79
   SECTION 9.10.           Successor Trust Collateral Agent.............................................................        79
   SECTION 9.11.           Representations and Warranties of the Trust Collateral Agent.................................        82
   SECTION 9.12.           Waiver of Setoffs............................................................................        83

ARTICLE X             TERMINATION.......................................................................................        83

   SECTION 10.01.          Optional Purchase............................................................................        83

ARTICLE XI            MISCELLANEOUS PROVISIONS..........................................................................        83

   SECTION 11.01.          Amendment....................................................................................        83
   SECTION 11.02.          Protection of Title to Trust.................................................................        85
   SECTION 11.03.          Limitation on Rights of Class A Noteholders..................................................        87
   SECTION 11.04.          Governing Law................................................................................        88
   SECTION 11.05.          Notices......................................................................................        88
   SECTION 11.06.          Severability of Provisions...................................................................        89
   SECTION 11.07.          Assignment...................................................................................        89
   SECTION 11.08.          Further Assurances...........................................................................        89
   SECTION 11.09.          No Waiver; Cumulative Remedies...............................................................        89
   SECTION 11.10.          Third-Party Beneficiaries....................................................................        90
   SECTION 11.11.          Actions by Noteholders.......................................................................        90
   SECTION 11.12.          Corporate Obligation.........................................................................        90
   SECTION 11.13.          Covenant Not to File a Bankruptcy Petition...................................................        90
   SECTION 11.14.          Class A Insurer Control Right................................................................        91
</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 Trust Collateral Agent'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 June 27, 2003,
among CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2003-1 (the "Issuer" or the
"Trust"), CREDIT ACCEPTANCE FUNDING LLC 2003-1, a Delaware limited liability
company, as Seller (the "Seller"), CREDIT ACCEPTANCE CORPORATION, a Michigan
corporation, 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 December 2003 Distribution Date,
and (ii) the automatic occurrence or declaration of an Early Amortization Event
pursuant to Section 2.02 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.

                  "Authorized Officer" has the meaning assigned to such term in
the Indenture.

                  "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 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, 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

                                       2

<PAGE>

Intercreditor Agreement, the Premium Letter, the Class A Notes, the Certificates
and all other documents and certificates delivered in connection therewith.

                  "Benefit Plan" means any pension plan (other than a
Multiemployer Plan) covered by Title IV of ERISA, which is maintained by an
ERISA Affiliate or in respect of which an ERISA Affiliate has liability.

                  "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 $2,500 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" means a Trust Certificate (as defined in the
Trust Agreement).

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

                  "Certificateholder" means the person in whose name the
respective Certificates shall be registered in the Certificate Register.

                  "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.

                                       3

<PAGE>

                  "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; or (iv) 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 Reimbursement Obligations" means any overdue
Premium and 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
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.

                  "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 Class A Note
guaranty insurance policy issued by the Class A Insurer to the Indenture Trustee
for the benefit of the Class A Noteholders with respect to the Class A Notes.

                  "Class A Note Rate" means 2.77% per annum computed on the
basis of a 360-day year consisting of twelve 30-day months.

                                       4

<PAGE>

                  "Class A Notes" means the 2.77% Class A Asset Backed Notes of
the Issuer issued pursuant to the Indenture.

                  "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.

                  "Class A Termination Date" means the date on which all amounts
owing to the Class A Noteholders and, as certified in writing by the Class A
Insurer to the Owner Trustee, all amounts owing to the Class A Insurer under the
Basic Documents shall be paid in full.

                  "Closing Date" shall be June 27, 2003.

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

                  "Collateral Amount" means, on any Distribution Date, an amount
equal to the Aggregate Outstanding Net Eligible Loan Balance (less all
Overconcentration Contracts and Ineligible Loans), after giving effect to all
purchases of Dealer Loans on such date.

                  "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 Second Amended
and Restated Credit Acceptance Corporation Credit Agreement, dated as of June 9,
2003, with Comerica

                                       5

<PAGE>

Bank, as administrative agent and collateral agent, and Bank 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 Class
A Insurer) in a readable format acceptable to the Backup Servicer and the Class
A Insurer.

                  "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 or light-duty truck 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 File" means with respect to each Contract, the fully
executed original counterpart (for UCC purposes) of the Contract, either a copy
of the application to the appropriate state authorities for a certificate of
title with respect to the related Financed Vehicle or 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, all 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" means (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee, which at the
time of execution of this Agreement is One Rodney Square, 920 No. King Street,
1st Floor, Wilmington, Delaware 19801 and (ii) with respect to the Trust
Collateral Agent, the principal corporate trust office of the Trust Collateral
Agent, which at the time of execution of this Agreement is 4 New York Plaza, 6th
Floor, New York, NY 10004, Attention: Institutional Trust Services/Structured
Finance.

                  "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 and
light-duty truck dealers in respect of retail installment contracts for the sale
of automobiles and/or light-duty trucks, 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.

                  "Cut-off Date" means, (i) with respect to Dealer Loans and
related collateral to be sold to the Issuer on the Closing Date, the close of
business on April 30, 2003, and (ii) with respect to Dealer Loans and related
collateral purchased by the Issuer on each Distribution Date

                                       6

<PAGE>

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 and/or light-duty
truck 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: (i) in the case of Dealer Loans related to any
Dealer: (A) with respect to the Closing Date, 3.0% 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, 3.0% 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; and (ii) in the case of Contracts related to any
Dealer: (A) with respect to the Closing Date, 2.0% of the Outstanding Balance of
all Eligible Contracts 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, 2.0% of the Outstanding Balance of all Eligible
Contracts 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, however, that for no more than three (3)
Dealers, such limit shall be 2.3%, of the Outstanding Balance of all Eligible
Contracts on the Closing Date or Distribution Date, 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.

                  "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 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.

                                       7

<PAGE>

                  "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 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

                                       8

<PAGE>

         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 Class A Insurer.

                  "Determination Date" means the fourth 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.

                  "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

                                       9

<PAGE>

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 Agency, 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 Class A Insurer, and,
as confirmed in writing by the Rating Agency, will not result in the downgrade
of the ratings of the Class A Notes, without regard to the Class A Note
Insurance Policy.

                  "Eligible Contract" means each Contract which (i) at the time
of its pledge by the applicable Dealer to the Originator, satisfied the
requirements for "Qualified Loan" set forth in the related Dealer Agreement and
(ii) is not an Overconcentration 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 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;

                                       10

<PAGE>

                  (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 sold 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 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;

                                       11

<PAGE>

                  (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 no Class A
         Insurer Default has occurred and is continuing, to the Class A Insurer
         and, as confirmed in writing by the Rating Agency, will not result in
         the downgrade of the ratings of the Class A Notes, without regard to
         the Class A Note 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 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;

                                       12

<PAGE>

                  (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;

                  (o)      is not an Overconcentration Loan; 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.

                                       13

<PAGE>

                  "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 July 15, 2003.

                  "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 collection fee, dealer
servicing fee, or finance charge as stated in, and determined in accordance
with, each respective Dealer Agreement.

                  "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.

                  "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 of the Indenture.

                  "Indenture Trustee" means JPMorgan Chase Bank, in its capacity
as trustee under the Indenture.

                                       14

<PAGE>

                  "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 of nationally
recognized certified public accountants that is Independent and is acceptable to
the Class A Insurer.

                  "Ineligible Contract" means each contract other than an
Eligible Contract.

                  "Ineligible Loan" means each Dealer Loan other than an
Eligible Loan; provided, however, 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.

                  "Initial Purchaser Agreement" means the Initial Purchaser
Agreement dated June 17, 2003, by and among the Issuer, Credit Acceptance, the
Seller and Wachovia Securities, 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 Agreement dated as
of the date hereof, among the Class A Insurer, the Servicer, the Seller, the
Issuer, the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee and
the Originator.

                  "Intercreditor Agreement" means the Intercreditor Agreement
dated as of the date hereof among Credit Acceptance, CAC Warehouse Funding
Corp., Seller, Issuer, Wachovia Securities, LLC, as agent, JPMorgan Chase Bank,
as trustee, 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 2003-1, 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

                                       15

<PAGE>

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, equal to the amount
by which the Outstanding Balance of such Dealer Loans exceeds the present value
of Forecasted Collections of the Contracts securing such Dealer Loans.

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

                  "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.

                  "Note Register" and "Note Registrar" shall have the meanings
set forth in the Indenture.

                  "Noteholder", "Holder" or "Class A Noteholder" means the
Person in whose name a Class A Note shall be registered in the Class A Note
Register, except that, solely for the purposes of giving any consent, waiver,
request, or demand pursuant to any Basic Document, 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.

                  "Notes" means the Class A Notes.

                  "Obligor" means, with respect to any Contract, the person or
persons obligated to make payments with respect to such Contract, including any
guarantor thereof.

                  "Officer's Certificate" means a certificate signed by the
chairman of the board, the vice chairman, the president, the chief financial
officer, any executive vice president, any

                                       16

<PAGE>

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 Class A Insurer, be
employees of or counsel to the Issuer and who shall be reasonably satisfactory
to the Trust Collateral Agent and the Class A Insurer, 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 Class A Insurer.

                  "Optional Purchase" means the optional purchase of the Trust
Property as set forth in Section 10.01 hereof.

                  "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. The
Outstanding Balance with respect to a Contract shall be deemed to have been
created at the end of the day on the date of processing of such Contract, 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 the reduction of the balance of
such Dealer Loan.

                  "Overconcentration Contract" means, with respect to any
Dealer, the amount by which the aggregate Outstanding Balance of all Eligible
Contracts on the Closing Date or on any Distribution Date during the Revolving
Period on which the Issuer purchases Dealer Loans, as the case may be, related
to such Dealer, exceeds the Dealer Concentration Limit described in clause (ii)
of the definition thereof.

                  "Overconcentration Loan" means, with respect to any Dealer,
the amount by which the Aggregate Outstanding Net Eligible Loan Balance on the
Closing Date or on any Distribution Date during the Revolving Period on which
the Issuer purchases one or more Dealer Loans, as the case may be, related to
such Dealer, exceeds the Dealer Concentration Limit described in clause (i) of
the definition thereof.

                  "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.

                  "Owner Trustee's Fees" means $3,000, payable by the Issuer to
the Owner Trustee annually in advance, 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.

                                       17

<PAGE>

                  "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.

                  "Physical Property" has the meaning assigned to such term in
the definition of "Delivery" above.

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

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

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

                  "Premium Supplement" has the meaning set forth in the Premium
Letter.

                  "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 June 17, 2003, 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 hereof.

                  "Purchase Amount" means: (i) with respect to an Ineligible
Loan (or Dealer Loan with respect to which payment is required to be made),
shall be equal to the product of: (A) the Net Loan Balance related to such
Ineligible Loan as of the last day of the preceding Collection Period and (B)
the Advance Rate in effect of the date of such payment; and (ii) with respect to
an Ineligible Contract (or Contract with respect to which payment is required to
be made), is equal to the product of: (A) the Outstanding Balance of such
Contract as of the last day of the preceding Collection Period and (B) a
fraction, 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

                                       18

<PAGE>

Outstanding Balance of all Eligible Contracts as of the last day of the
preceding Collection Period.

                  "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 Agency" means, collectively, 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.

                  "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, $4,000,000; provided, however, that the Reserve Account
Requirement can never exceed the then outstanding Class A Note Balance.

                  "Responsible Officer" means, with respect to the Indenture
Trustee, the Trust Collateral Agent or the Owner Trustee, any officer within the
Corporate Trust Office of the Indenture Trustee, the Trust Collateral Agent or
the Owner Trustee, as the case may be, including any Vice President, Assistant
Vice President, Assistant Treasurer, Assistant Secretary, Corporate Trust
Officer or any other officer of the Indenture Trustee, the Trust Collateral
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 any familiarity with the particular subject.

                                       19

<PAGE>

                  "Revolving Period" means the period beginning on the Closing
Date and terminating on the earlier of (i) the close of business on December 15,
2003, 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 2003-1 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 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.

                  "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 $2,500.

                                       20

<PAGE>

                  "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, June 16, 2008.

                  "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 product of $7.50 and the
number of Contracts to be serviced.

                  "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, the Certificate
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 Collateral Agent" means JPMorgan Chase Bank as Trust
Collateral Agent hereunder, its successors in interest and any successor Trust
Collateral Agent hereunder.

                  "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.

                                       21

<PAGE>

                  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).

                  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,
and so long as no Class A Insurer Default has occurred and is continuing, to the
Class A 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.

                  Any directions required to be given hereunder by the Class A
Insurer shall, in the case of the occurrence and continuance of a Class A
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

                                       22

<PAGE>

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 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 collection 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").

                  (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

                                       23

<PAGE>

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 Servicer and the Trust Collateral Agent on each Distribution Date
during the Revolving Period; (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 collection 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 Trust Collateral Agent and the Class A
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)      Collections for any two (2) consecutive
         Collection Periods are less than 75.0% of Forecasted Collections for
         such Collection Periods; or

                           (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.

                                       24

<PAGE>

                  (c)      The occurrence of any one of the following events
shall constitute a "Discretionary Amortization Event" only if after any
applicable grace period either the Class A Insurer, or if a Class A Insurer
Default has occurred and is 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 the applicable
         grace 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 unremedied for 30 days after
         written notice of such failure to the Issuer by the Class A Insurer, or
         if a Class A Insurer Default has occurred, 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 the Class A Insurer, of if a Class A Insurer Default has
         occurred and is 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 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 the Class A Insurer, or, if a Class A Insurer Default has occurred
and is continuing, the Majority Noteholders, that an Early

                                       25

<PAGE>

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 Servicer, the Rating Agency, 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.

                  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 and the Class A Noteholders to secure the repayment of the Class A Notes
and amounts owed to the Class A 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

                                       26

<PAGE>

         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.

                  (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, 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 and the Class A Insurer relies in issuing the Class A Note
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

                                       27

<PAGE>

         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 or the Class A Insurer by the Seller or the Servicer
         was true and correct in all material respects as of the date such
         information was provided to the Trust Collateral Agent or the Class A
         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 sold 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 or
         the Class A 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

                                       28
<PAGE>

         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 incorporated herein
         by reference as if made by the Seller to the Trust Collateral Agent and
         the Class A 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
         630 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 and
the Class A Insurer promptly, in writing, upon the discovery of (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) 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) any failure of a Contract File to contain an original Contract
following the review described in Section 3.03(d). Unless the breach or failure
shall have been cured by the last day of the first full Collection Period
following the discovery thereof the Seller shall have an 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 Credit Acceptance
under the Contribution Agreement, to make a payment in respect of any
nonconforming Dealer Loan or any Contract for which the Contract File fails to
contain the original Contract, in each case, that is materially and adversely
affected by the breach or failure or which materially and adversely affects the
interests of the Indenture Trustee or the Class A Insurer, as of such last day.
In consideration thereof, the Seller shall remit, or cause Credit Acceptance to
remit, the Purchase Amount, in the manner specified in Section 5.04 hereof.

                  (b)      [Reserved.]

                  (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 Class A
Noteholders or the Class A 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

                                       29
<PAGE>

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).

                  (d)      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, the Seller's obligation to make such
payments may be waived with the prior written consent of the Class A Insurer.
The Class A Insurer shall notify the Rating Agency of any such waiver.

                  (e)      Any Contract which is subject to a payment in
accordance with Section 3.02(a), 3.03(d) or 4.07 of this Agreement shall be an
Ineligible Contract.

                  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 (or other evidence of lien) related to the Financed Vehicles. Credit
Acceptance hereby accepts such appointment and agrees to hold each Dealer
Agreement, Contract File and certificate of title (or other evidence of lien)
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, the
Servicer shall provide an Acknowledgment substantially in the form of Exhibit E
hereto dated as of the Closing Date to the Owner Trustee, the Trust Collateral
Agent and the Class A Insurer confirming that the Servicer has received and is
in possession of the original of each Dealer Agreement listed on Schedule A
hereto. On or prior to the 120th day and the 180th day after the Closing Date,
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 and the Class A Insurer confirming that the Servicer has
received and is in possession of the original Contract with respect to 75% or,
the remaining 25%, as applicable, of the Contracts listed on Schedule A hereto.

                           (ii)     On or prior to 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
         Distribution Date to the Owner Trustee, the Trust Collateral Agent and
         the Class A Insurer confirming that the Servicer has received and is in
         possession of the original of each Dealer Agreement listed on Schedule
         A hereto as amended or supplemented on the related Distribution Date.
         On or prior to the 120th day 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 and the
         Class A Insurer

                                       30
<PAGE>

         confirming that the Servicer has received and is in possession of the
         original Contract with respect to 75%, or, the remaining 25%, as
         applicable, of the Contracts listed on Schedule A hereto as amended or
         supplemented on the related Distribution Date.

                  (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 (or other evidence of lien) 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 (or other evidence
of lien) 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 and the Class A Insurer by written notice. The Servicer shall maintain
such certificates of title physically segregated from other files of automotive
receivables owned or serviced by it 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 and the Class A Insurer.

                  (d)      (i)      The Servicer shall within: (a) 120 days
after the Closing Date, review 75% of the Contract Files related to the
Contracts transferred to the Issuer on the Closing Date; and (b) 180 days after
the Closing Date, review the remainder of the Contract Files related to the
Contracts transferred to the Issuer on the Closing Date, in each case, to verify
the presence of the original Contract, provided, however, that the certificate
of title or other evidence of lien with respect to a Contract need not be
verified. With respect to any Contract for which any of the foregoing documents
have not been delivered to the Servicer within 120 days, or 180 days, as
applicable, of the Closing Date, or corrected, the Seller shall make a payment
in respect of the related Contract in an amount equal to the related Purchase
Amount, in accordance with the provisions of Section 3.02(a) hereof.

                           (ii)     The Servicer shall within: (a) 120 days
         after each Distribution Date during the Revolving Period, review 75% of
         the Contract Files relating to the Dealer Loans sold to the Trust on
         such Distribution Date; and (b) 180 days after such Distribution Date,
         review the remainder of the Contract Files relating to the Dealer Loans
         sold to the Trust on such Distribution Date, in each case, to verify
         the presence of the original Contract, provided, however, that the
         certificate of title or other evidence of lien with respect to a
         Contract need not be verified. With respect to any Contract for which
         any of the foregoing documents have not been delivered to the Servicer
         within 120 days, or 180 days, as applicable, of the relevant
         Distribution Date, or corrected, the Seller shall make a payment in
         respect of the related Contract in an amount equal to the related
         Purchase Amount, in accordance with the provisions of Section 3.02(a)
         hereof.

                  (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.

                                       31
<PAGE>

                  (f)      The Servicer shall have and perform the following
powers and duties:

                           (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 Control 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
         Control Party, in its sole discretion, take all steps necessary to
         cause the certificate of title or other evidence of ownership 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

                                       32
<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 and the Class A 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 Class A Insurer, upon written notice to the Indenture Trustee,
the Trust Collateral Agent, the Servicer, the Rating Agency 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 Class A Insurer, upon written notice to the Indenture Trustee, the
Trust Collateral Agent, the Servicer, the Rating Agency 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 Class A Insurer does not renew any such
servicing term in writing, the servicing term of Credit Acceptance shall
automatically expire. Upon the occurrence of a Servicer Default, the Class A
Insurer shall have the rights set forth in Section 8.01 hereof. Notwithstanding
anything herein to the contrary, the provisions of 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 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,

                                       33
<PAGE>

such Dealer Loan or Contract to the Servicer. The Servicer shall not make the
Seller, the Trust, the Trust Collateral Agent, the Indenture Trustee or the
Class A 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, 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 no
Class A Insurer Default has occurred and is continuing, the Class A Insurer, 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 no Class A
Insurer Default has occurred and is continuing, and the Class A Insurer, 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 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

                                       34
<PAGE>

         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 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 and the Class A 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 or the Class A 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 and the Class A 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 or any Class A Noteholder except as provided in Section 3.03 herein.

                  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 and the Class A 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. The
Servicer shall hold in trust for the Issuer, the Trust Collateral Agent and the
Class A 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 all records which
evidence or relate to all or any part of the Trust Property.

                                       35
<PAGE>

                  SECTION 4.03. Realization Upon Contracts.

On behalf of the Trust, the Indenture Trustee, and the Class A 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 Servicer as noted lienholder on each certificate of title relating
to a Financed Vehicle in all states where such notation is a means of
perfection. The Servicer shall take such steps as are necessary to reperfect
such security interest on behalf of the Trust 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.

                  (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

                                       36
<PAGE>

         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 and the Class A 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 and the Class A 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 and the Class A
         Insurer, quarterly.

                           (vii)    Books and Records. The Servicer shall keep,
         or cause to be kept, in reasonable detail, books and records of account
         of its assets and business, and shall clearly reflect therein the
         ownership of the Trust Property by the Issuer.

                           (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, permit the Class A Insurer
         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.

                                       37
<PAGE>

         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 Internal Revenue
         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 or, if a Class
         A Insurer Default has occurred and is continuing, to the Indenture
         Trustee for distribution to the Class A Noteholders, and to the Rating
         Agency 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.

                           (B)      Quarterly Financial Statements. As soon as
         available, and in any event within 45 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,
         shareholders' equity 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

                                       38
<PAGE>

         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 financial officer 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 or the Rating Agency may reasonably request.

                  (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 and the Class A Insurer an Officer's Certificate and an
         Opinion of Counsel each stating that any consolidation,

                                       39
<PAGE>

         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 and the Class A
         Insurer may reasonably request;

                           (B)      the Servicer shall have delivered written
         notice of such consolidation, merger, conveyance or transfer to the
         Trust Collateral Agent and the Class A 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 and the Class A 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
         regarding payments to be made directly or indirectly, unless the Trust
         Collateral Agent and the Class A Insurer 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).

                           (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 and the Class A 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.

                                       40
<PAGE>

                           (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 or the Class A Insurer under this Agreement
         or any other Basic Document, without the prior written consent of the
         Trust Collateral Agent and the Class A Insurer.

                           (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 payment in full by or on behalf of the Obligor
         thereunder or repossession, nor shall the Servicer impair the rights of
         the Class A Noteholders or the Class A Insurer in the Contracts, except
         as may be required by applicable law.

                  SECTION 4.07. Payments in Respect of Contracts Upon Breach.

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 and the Class A
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 or the Class A 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 the Class A Insurer, 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 the Class A Insurer; 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 in
the manner specified in Section 5.04 hereof. 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, the
Servicer's obligation to make such payments may be waived with the prior written
consent of the Class A Insurer. 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 Contract which is subject to a payment in
accordance with this Section shall be deemed to be an Ineligible Contract.

                                       41
<PAGE>

                  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
Rating Agency, the Backup Servicer, and Wachovia Securities, 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 make available statements to Class A Noteholders and the Class A 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 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

                                       42
<PAGE>

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 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 Class A Insurer, 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.

                                       43
<PAGE>

                  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 Agency, the Indenture Trustee, the Class A
Insurer and the Class A Noteholders, on or before March 31st of each year
beginning in the year 2004, 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 and to the
Rating Agency, 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 and to such Rating Agency, 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.

The Servicer will deliver to the Trust Collateral Agent, the Owner Trustee, the
Indenture Trustee, each Class A Noteholder, the Class A Insurer and the Rating
Agency, on or before March 31st of each year beginning in the year 2004, 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 and the Class A
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 certain procedures performed on
the documents, records and accounting records that such accountants considered
appropriate under the circumstances) 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.

                                       44
<PAGE>

                  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.

                  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 and the Class A 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 and the Class A 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 Agency, the
Class A Insurer and the Indenture Trustee within five (5) Business Days
thereafter (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 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

                                       45
<PAGE>

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 Agency.

                  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 Class
A Insurer, with not less than 30 days' notice delivered to the Class A 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 no Class A Insurer Default has occurred and is continuing, the Class A
Insurer shall have the right to remove the Backup Servicer for cause at any time
and replace the Backup Servicer. In the event that the Class A Insurer 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

                                       46
<PAGE>

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.

                                   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 and 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 and 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 and the
         Class A Insurer, 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 and the
         Class A Insurer as their interests may appear. The Class A Note
         Distribution Account shall initially be established with the Trust
         Collateral Agent.

                           (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 and 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
         and the Certificateholders as their interests may appear. The Reserve
         Account shall initially be established with the Trust Collateral Agent.

                                       47
<PAGE>

                  (b)      Funds on deposit in the Collection Account, subject
to Section 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 and 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.

                  (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 and the
Certificateholders as their interests may appear.

                                       48
<PAGE>

                           (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 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
Class A Insurer, the Trust Collateral Agent, by the Indenture Trustee or by the
Owner Trustee, each with the prior written consent of the Class A Insurer (so
long as no Class A Insurer Default has occurred and is 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 the 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.

                                       49
<PAGE>

The Servicer shall determine each month the amount of Collections received
during such month which constitute 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.

                  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 fourth
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

                                       50
<PAGE>

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 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;

                           (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 Class A Insurer 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.

                                       51
<PAGE>

                  SECTION 5.06. Reserved.

                  SECTION 5.07. Payments under the Class A Note Insurance
Policy.

                  (a)      (i)      If, on the close of business on the fourth
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) 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 Class A Interest Distributable Amount and the Principal Deficiency,
the Trust Collateral Agent shall, no later than 12:00 noon New York time, on the
third 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.

                           (ii)     If, on the close of business on the fourth
         Business Day immediately prior to the Stated Final Maturity, the Class
         A Note Balance, as of the opening of business on such Distribution
         Date, exceeds the sum of (x) Available Funds remaining in the
         Collection Account and available for payment of Class A Principal
         Distributable Amount hereof and (y) the amount available on the Stated
         Final Maturity in the Reserve Account and available for payment of
         Class A Principal Distributable Amount, the Trust Collateral Agent
         shall, no later than 12:00 noon New York time, on the third 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.

                  (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)      In addition, 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 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 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. The proceeds of any such claim 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 be disbursed to the Trust Collateral Agent for
distribution to such Class A Noteholder.

                                       52
<PAGE>

                  (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.

                  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) 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 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 the Class A Insurer: (A) so long as no
         Class A Insurer Default described in clause (i) of such definition has
         occurred and is continuing, the Premium due to the Class A Insurer,
         including any past due Premium and any Premium Supplement; (B) so long
         as no Class A Insurer Default has occurred and is continuing, any
         expenses owed to the Class A Insurer under the Insurance Agreement; and
         (C) so long as no Class A Insurer Default has occurred and is
         continuing, any Class A Insurer Reimbursement Obligations owed for any
         draw on the Class A Note Insurance Policy for 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;

                                       53
<PAGE>

                           (vi)     during the Revolving Period, to the
         Principal Collection Account, 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;

                           (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 the Class A Insurer, the Class A
         Reimbursement Obligations and any other amounts owed to the Insurer, 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) 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.

                  (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

                                       54
<PAGE>

                           (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. The Class A Note Insurance Policy does not cover any shortfalls
relating to withholding taxes.

                  (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

                                       55
<PAGE>

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 (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 a
copy to the Rating Agency). 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 Class A Noteholders, the Certificateholder, the Initial
Purchaser and Bloomberg, L.P. (at 499 Park Avenue, New York, New York 10022,
Attention: Credit Acceptance 2003-1). 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;

                                       56
<PAGE>

                           (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

                           (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 and
the Class A 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 Agency 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/absmbs (Help Desk phone no.
1-877-722-1095) 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

                                       57
<PAGE>

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 and the Class A Insurer relied in
issuing the Class A Note 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.

                           (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

                                       58
<PAGE>

         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.

                           (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 2003-1" 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 or the Class A 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 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.

                                       59
<PAGE>

                           (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 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 are members of an affiliated group within the
         meaning of Section 1504 of the Internal Revenue Code which 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 the Employee Retirement Income Security Act of
         1974, as amended.

                           (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 (ii) 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.

                                       60
<PAGE>

                           (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 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 intends 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

                                       61
<PAGE>

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 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 Class A Insurer 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 Class A Insurer:

                           (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.

                                       62
<PAGE>

                  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 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 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 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, 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
         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

                                       63
<PAGE>

         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
         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 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 and the Class A Insurer relies in issuing the
Class A Note 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

                                       64
<PAGE>

         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 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
         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.

                                       65
<PAGE>

                           (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.

                           (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 or the Class A Noteholders.

                  SECTION 7.02. Indemnities of Servicer.

                                       66
<PAGE>

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 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 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 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,
         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 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

                                       67
<PAGE>

         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 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.

                  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.

                  (a)      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

                                       68
<PAGE>

(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 Class A Insurer 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 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 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, 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 Agency shall have confirmed the "shadow ratings" of the Class A Notes
without regard to the Class A Note Insurance Policy. The Servicer shall provide
notice of any merger, conversion, consolidation or succession pursuant to this
Section to the Class A Insurer and the Rating Agency 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,

                                       69
<PAGE>

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 sub-contractor
acceptable to the Class A Insurer; 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) 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 any amount required to be deposited therein
         by the Servicer (and, in the event the Backup Servicer is acting as
         successor Servicer, such failure shall continue for two (2) Business
         Days) or (y) to deliver to the Trust Collateral Agent or the Class A
         Insurer the Servicer's Certificate on the related Determination Date;
         or

                           (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 Class A Notes, this
         Agreement or any other 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

                                       70

<PAGE>

         remedied, (1) to the Servicer, by the Trust Collateral Agent, or (2) to
         the Servicer by the Class A Insurer, or if a Class A Insurer Default
         has occurred and is 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 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
         therein; 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, any of the Trust Collateral Agent, if so
requested by the Class A Insurer, or if a Class A Insurer Default has occurred
and is 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 Agency, the Class A 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

                                       71

<PAGE>

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 successor Servicer
by the predecessor Servicer, such Transition Expenses shall be paid under
Section 5.08(a)(i) hereof. In addition, the Class A Insurer shall have the
option to pay the Transition Expenses. If the Class A Insurer elects to pay any
such Transition Expenses, the amount paid by the Class A Insurer shall
constitute part of the Class A Insurer Reimbursement Obligations due to the
Class A Insurer.

                  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 no Class A
Insurer Default has occurred and is continuing, if the Class A Insurer 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 no Class A Insurer Default has
occurred and is continuing, the Class A Insurer otherwise directs, the Class A
Insurer 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

                                       72

<PAGE>

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 and the Class A Insurer) or, so long as no
Class A Insurer Default has occurred and is continuing, the Class A Insurer
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
long as no Class A Insurer Default has occurred and is continuing, the Class A
Insurer otherwise directs, the outgoing Servicer shall continue to act as
Servicer hereunder until a successor Servicer which, so long as no Class A
Insurer Default has occurred and is continuing, shall be acceptable to the Class
A Insurer 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.

                  (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 Class A Insurer (so long as no Class A
Insurer Default has occurred and is 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

                                       73

<PAGE>

addresses appearing in the Note Register and the Certificate Register and to
each of the Rating Agency then rating the Class A Notes and the Class A Insurer.

                  SECTION 8.04. Waiver of Past Defaults.

So long as no Class A Insurer Default has occurred and is continuing, the Class
A Insurer, may, on behalf of all Class A Noteholders and the Certificateholders,
waive any or all default(s) by the 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.

                                   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.

                                       74

<PAGE>

                  (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 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 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.

                                       75

<PAGE>

                  (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.

                  (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 Class A Insurer (so long as no Class A
Insurer Default has occurred and is 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

                                       76

<PAGE>

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).

                  (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

                                       77

<PAGE>

received by the Trust Collateral Agent from a financial institution in
connection with the purchase of such Eligible Investments.

                  (b)      [Reserved.]

                  (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 Class A Insurer, so long as no Class A Insurer Default has
occurred and is 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,

                                       78

<PAGE>

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 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 and the Rating
Agency 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 Agency and the Class A Insurer;
provided, that such resignation shall not be effective

                                       79

<PAGE>

until a successor Trust Collateral Agent is appointed and accepts appointment in
accordance with clause (d) below.

                  (c)      Removal.

                           (i)      The Issuer, prior to the Class A Termination
         Date with the prior written consent of the Class A Insurer, 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 Class A Insurer 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 Class A Insurer 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 Class A Insurer.
         After the Class A Termination Date, the Issuer

                                       80

<PAGE>

         may appoint a successor Trust Collateral Agent without the consent of
         the Class A Insurer.

         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 and the Rating Agency. 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 Class A Insurer does not take office within
60 days after the retiring Trust Collateral Agent resigns or is removed, the
retiring Trust Collateral Agent, or the Control 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 Class A Insurer, 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 Class A Insurer.

         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 Class A
Insurer 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
no Class A Insurer Default has occurred and is continuing, the Class A Insurer
has the right to appoint a successor Trust Collateral Agent and if it fails to,
or if a Class A Insurer Default has occurred and is 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 Agency, the Class A 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

                                       81

<PAGE>

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 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 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.

                                       82

<PAGE>

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 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 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 and the Rating Agency 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 Class A Insurer, so long as no Class A Insurer Default has
occurred and is 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

                                       83

<PAGE>

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, the Class A 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 rating on the Class A Notes to be qualified, reduced or
withdrawn without regard to the Class A Note 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 Class A Insurer or, if a Class A Insurer
Default has occurred and is 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 Class A Insurer 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.

                  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 and the Class A 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.

                                       84

<PAGE>

                  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 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 and the
Class A 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 ss.9-506 or
ss.9-507 of the UCC, unless it shall have given the Trust Collateral Agent and
the Class A 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 and the Class A 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 Control 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 in
such Dealer Loan or Contract and that such Dealer Loan or Contract is owned by
the Trust.

                                       85

<PAGE>

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 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 and the Class A 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 and the Class A 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 executed 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
                  executed and 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) stating that, in the opinion of such
                  Counsel, no such action shall be

                                       86

<PAGE>

                  necessary to preserve and protect such interest. Such Opinion
                  of Counsel shall also describe the execution and 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 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 no Class A Insurer Default has occurred and is
continuing, the Class A Insurer 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

                                       87

<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 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 2003-1/James D. Murray, Jr., Silver Triangle
Building, 25505 West Twelve Mile Road, Southfield, Michigan 48034-8339; phone
number: (248) 353-2400 (ext. 884); fax number: (248) 827-8542; (b) in the case
of the Servicer at the following address: Attention: Credit Acceptance
Corporation/James D. Murray, Jr., Silver Triangle Building, 25505 West Twelve
Mile Road, Southfield, Michigan 48034-8339; phone number: (248) 353-2400 (ext.
884); fax number: (248) 827-8542; (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) [reserved]; (f) 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; (g) 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 (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"); and (h) in the
case of the Rating Agency, to: Standard & 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. Any
notice required or permitted to be mailed to a Class A Noteholder or

                                       88

<PAGE>

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.

                  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 Class A Insurer.

                  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 Class A Insurer 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, 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.

                  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. The Class A Insurer is an express
third party beneficiary of this Agreement.

                                       89

<PAGE>

                  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 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. Class A Insurer Control Right. So long as any
Class A Note is outstanding, the Class A Insurer shall have the power to
exercise the voting rights granted to the Class A Noteholders, except as set
forth in Section 11.01; provided, however, that

                                       90

<PAGE>

during the continuance of a Class A Insurer Default, all voting, consent or
control rights of the Class A Insurer shall be suspended. Upon the cure of a
Class A Insurer Default, such voting, consent and control rights shall be
reinstated.

                                       91

<PAGE>

                  IN WITNESS WHEREOF, the Issuer, Seller, Servicer, 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 2003-1, as Seller

                  By: /S/ Douglas W. Busk
                      -------------------
                      Name: Douglas W. Busk
                      Title: VP Finance & Treasurer

                  CREDIT ACCEPTANCE CORPORATION, as Servicer

                  By: /S/ Douglas W. Busk
                      ------------------
                      Name: Douglas W. Busk
                      Title: Chief Financial Officer & Treasurer

                  [Sale and Servicing Agreement Signature Page]

<PAGE>

                  CREDIT ACCEPTANCE AUTO DEALER
                  LOAN TRUST 2003-1, 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: /S/ Sterling C. Correia
                      -----------------------
                      Name: Sterling C. Correia
                      Title: Vice President

                  JPMORGAN CHASE BANK, as Trust Collateral
                  Agent and Indenture Trustee

                  By: /S/ Esther D. Antoine
                      ---------------------
                      Name: Esther D. Antoine
                      Title: Trust Officer

                  SYSTEMS & SERVICES TECHNOLOGIES, INC., as
                  Backup Servicer

                  By: /S/ Joseph D. Booz
                      ------------------
                      Name: Joseph D. Booz
                      Title: EVP/Secretary/General Counsel

                  [Sale and Servicing Agreement Signature Page]

<PAGE>

                                                                       EXHIBIT A

                                   [Reserved]

                                       A-1

<PAGE>

                                                                       EXHIBIT B

                 Credit Acceptance Auto Dealer Loan Trust 2003-1
                             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 2003-1

                  In accordance with Section 5.11 of the Sale and Servicing
Agreement dated as of June 27, 2003 (the "Agreement"), by and among Credit
Acceptance Funding Corporation Trust 2003-1, as the Issuer, Credit Acceptance
Funding LLC 2003-1, 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 $________ in
 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 June 27, 2003 (the "Sale and Servicing
Agreement") among Credit Acceptance Auto Dealer Loan Trust 2003-1, Credit
Acceptance Funding LLC 2003-1, JPMorgan Chase Bank, Systems & Services
Technologies, Inc. and the Trust Collateral Agent, pursuant to which the
Servicer holds on behalf of the Class A Noteholders, the Class A 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 ________, 2003.

                                    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

<TABLE>
<S>                                                                             <C>
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
</TABLE>

                                      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  FORECASTED
COLLECTION PERIOD                                 COLLECTIONS
-----------------                         -----------------------------
<S>                                       <C>
May-2003                                         11,200,367.70
Jun-2003                                         10,942,012.61
Jul-2003                                         10,662,697.52
Aug-2003                                         10,366,792.64
Sep-2003                                         10,038,493.32
Oct-2003                                          9,705,149.80
Nov-2003                                          9,372,774.18
Dec-2003                                          8,996,011.80
Jan-2004                                          8,662,330.52
Feb-2004                                          8,329,837.04
Mar-2004                                          7,892,065.31
Apr-2004                                          7,409,127.70
May-2004                                          6,945,983.85
Jun-2004                                          6,472,824.24
Jul-2004                                          6,076,782.91
Aug-2004                                          5,676,140.87
Sep-2004                                          5,269,839.19
Oct-2004                                          4,926,555.25
Nov-2004                                          4,606,534.79
Dec-2004                                          4,318,109.95
Jan-2005                                          4,098,674.86
Feb-2005                                          3,882,682.25
Mar-2005                                          3,615,245.74
Apr-2005                                          3,341,255.16
May-2005                                          3,084,156.50
Jun-2005                                          2,769,677.48
Jul-2005                                          2,466,661.70
Aug-2005                                          2,241,349.10
Sep-2005                                          1,999,244.22
Oct-2005                                          1,810,415.83
Nov-2005                                          1,606,005.89
Dec-2005                                          1,392,250.18
Jan-2006                                          1,215,785.91
Feb-2006                                          1,004,414.76
Mar-2006                                            736,511.28
Apr-2006                                            549,025.67
May-2006                                            529,722.86
Jun-2006                                            528,399.41
</TABLE>

                                      B-1

<PAGE>

<TABLE>
<CAPTION>
                                          CREDIT ACCEPTANCE  FORECASTED
COLLECTION PERIOD                                 COLLECTIONS
-----------------                         -----------------------------
<S>                                       <C>
Jul-2006                                            526,570.92
Aug-2006                                            524,893.25
Sep-2006                                            523,137.52
Oct-2006                                            520,678.16
Nov-2006                                            518,554.15
Dec-2006                                            516,347.44
Jan-2007                                            514,460.00
Feb-2007                                            512,007.87
Mar-2007                                            505,699.85
Apr-2007                                            498,894.91
May-2007                                            493,010.35
Jun-2007                                            487,933.81
Jul-2007                                            482,973.19
Aug-2007                                            480,124.25
Sep-2007                                            477,233.45
Oct-2007                                            473,620.86
Nov-2007                                            470,043.35
Dec-2007                                            467,534.81
Jan-2008                                            463,295.54
Feb-2008                                            455,461.32
Mar-2008                                            426,067.25
Apr-2008                                            392,899.01
May-2008                                            373,202.56
Jun-2008                                            357,841.77
Jul-2008                                            331,421.35
Aug-2008                                            307,118.19
Sep-2008                                            287,039.67
Oct-2008                                            273,925.31
Nov-2008                                            261,591.70
Dec-2008                                            249,348.39
Jan-2009                                            238,943.74
Feb-2009                                            219,091.25
Mar-2009                                            191,709.81
Apr-2009                                            180,143.87
May-2009                                            153,935.95
Jun-2009                                            145,517.10
Jul-2009                                            129,735.13
Aug-2009                                             98,147.67
Sep-2009                                             82,099.22
Oct-2009                                             78,234.56
Nov-2009                                             65,125.89
Dec-2009                                             42,360.56
Jan-2010                                             33,510.94
Feb-2010                                             22,206.63
Mar-2010                                              7,292.64
Apr-2010                                             21,006.45
</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 rating of the Class A Notes (without giving effect to the Class
A Note Insurance Policy), waive any of the Perfection Representations,
Warranties or Covenants; (ii) shall provide the Rating Agency with prompt
written notice of any breach of the Perfection Representations, Warranties

                                      C-2

<PAGE>

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
Note 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 other than Debt represented by Intercompany Loans incurred by the English
Special Purpose Subsidiary pursuant to the UK Restructuring) 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
Forty-Five Million Dollars ($245,000,000), 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, 2003, (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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]