CAC made loans they knew consumers couldn't repay — and profited anyway.
The "Designed to Fail" Loan Model
Credit Acceptance Corporation used a proprietary internal scoring system to predict exactly how much it would collect on each loan — including cash payments, repossession proceeds, and wage garnishments. In many cases, CAC's own model predicted consumers would not repay even the principal. They made those loans anyway. The average CAC auto loan carried an annual interest rate exceeding 38%, with some loans exceeding 100% APR.
Hidden Add-Ons You May Have Never Agreed To
CAC actively encouraged dealer networks to "pack" consumer contracts with Vehicle Service Contracts (VSCs) and Guaranteed Asset Protection (GAP) products — often without consumers knowing. Many borrowers were told these products were required to get financing. They weren't. CAC knew about these practices and did nothing to stop them.
Repossessions That Shouldn't Have Happened
Nearly half of all CAC borrowers had their vehicles repossessed during the life of their loan. CAC pre-planned for this — it factored repossession and auction proceeds directly into its profit model. Consumers lost their transportation, their credit scores, and in some cases their jobs. The states' investigation found this was not an accident but a feature of CAC's business design.
The Lawsuit & Settlement
New York Attorney General Letitia James and the Consumer Financial Protection Bureau (CFPB) first sued CAC in January 2023. After the CFPB dropped its case in early 2025, AG James continued alone — and ultimately brought 40 additional state AGs into a bipartisan coalition. On September 17, 2026, CAC agreed to a $694 million settlement covering $60 million in cash restitution and over $630 million in debt relief. The settlement takes effect November 2, 2026.
The 41 states in the settlement.
If you had a CAC auto loan and live in any of these states, you may be eligible for direct cash restitution or debt relief through the official settlement. Loans must generally have been originated between November 1, 2015, and November 30, 2025.
Important: According to CAC's own settlement page, fewer than 3% of open accounts are eligible for direct settlement-related relief. If you don't receive a notice from CAC, you may not be in that group — but that does not mean you have no legal options. See below.
Three types of relief — who gets what.
Direct restitution to repossession victims
Consumers who received particularly risky CAC loans and subsequently had their cars repossessed will receive direct cash payments averaging approximately $1,400. CAC will contact eligible consumers — you do not need to file a claim.
For repossessed vehicles (loan balance eliminated)
Consumers with risky CAC loans made between November 1, 2015, and November 30, 2025, whose cars were repossessed, will have their remaining loan balances forgiven entirely. This means CAC cannot come after you for a deficiency balance.
For borrowers who still have their vehicles
Some consumers with qualifying high-risk loans who have not yet been repossessed will receive significant debt reduction — allowing them to keep their vehicles with a substantially reduced remaining balance.
Starting November 2, 2026
For risky loans originated in December 2025 or later that fail quickly, CAC must provide 95% debt relief and is prohibited from filing collections lawsuits. This protection lasts five years.
The settlement covers a fraction of CAC borrowers. Federal law covers far more.
CAC says fewer than 3% of active accounts qualify for settlement relief. But CAC's history of bad practices — unlawful reporting, aggressive collections, unauthorized charges, illegal repossessions — affects a much wider group of consumers. These are separate from the settlement and can be pursued through private arbitration or federal court regardless of whether you received a settlement notice.
FCRA Violations
If CAC is reporting inaccurate information on your credit report — a repossession you didn't owe, a balance that was eliminated, or late payments that were misreported — that may violate the Fair Credit Reporting Act. You may be entitled to damages.
FDCPA / TCPA Violations
Repeated robocalls, calls after you asked them to stop, calls to your workplace, or calls at prohibited hours may violate the Fair Debt Collection Practices Act or Telephone Consumer Protection Act. Each violation carries statutory damages.
Unlawful Repossession
If your vehicle was repossessed without proper notice, while current on payments, or in a manner that breached the peace, you may have a wrongful repossession claim under state and federal consumer protection law.
Unauthorized Loan Add-Ons
If VSC or GAP products were added to your loan without your knowledge or consent — or you were told they were required — that may give rise to a breach of contract or consumer fraud claim separate from the multistate settlement.
Deficiency Balance After Repossession
After repossessing and auctioning your vehicle, CAC may have sent you a bill for a "deficiency balance." If that balance calculation was wrong, inflated, or based on a commercially unreasonable sale, you may have grounds to challenge it.
Breach of Contract
If the terms of your loan were different from what you were shown at signing, or if CAC applied payments differently than agreed, those discrepancies may constitute actionable breach of contract claims in private arbitration.
5 things every CAC borrower should understand.
You do NOT need to file a claim for the settlement.
CAC will identify eligible borrowers and contact them directly. If you qualify for cash restitution or debt relief, you should receive notice automatically. Watch your mail for correspondence from Credit Acceptance or settlement administrators after November 2, 2026.
Not receiving a notice does not mean you have no case.
The settlement targets a narrow set of high-risk loans. Most CAC borrowers won't qualify. That doesn't mean they weren't harmed — it means their harm may need to be addressed through a separate legal channel, like private arbitration under federal consumer protection law.
Watch your credit report — CAC may still be reporting incorrectly.
Even after the settlement, errors on your credit report from CAC-related accounts can linger. A repossession that was forgiven, a balance that was eliminated, or a late payment that was incorrect — these can all continue to drag down your score until challenged under the FCRA.
Statutes of limitations are real — don't wait.
Federal consumer protection claims have time limits. FCRA claims are generally 2 years from the violation. FDCPA claims are 1 year. If CAC violated your rights, that window closes regardless of what happens with the multistate settlement. The time to act is now.
Beware of scammers targeting settlement claimants.
Whenever a high-profile settlement is announced, bad actors flood social media claiming they can "file your claim" or "get you a bigger payout" for a fee. The settlement requires no claim filing and no third-party service. Be skeptical of anyone contacting you unsolicited about this settlement.
Had a Credit Acceptance loan? Let's look at your situation.
Whether or not you qualify for the multistate settlement, you may have federal claims worth pursuing. A $197 case evaluation gives you a written assessment within 3 business days — no commitment required.
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Legal Disclaimer: Monay & Associates LLC is a consumer advocacy firm, not a law firm. The information on this page is for general informational purposes only and does not constitute legal advice. Settlement details are based on publicly available information from participating state attorneys general as of September 17, 2026. Settlement terms, eligibility criteria, and timelines are subject to change. Consult a licensed attorney in your jurisdiction regarding your specific situation.