Attorney General Sunday Joins $694 Million National Settlement with Subprime Auto Lender Credit Acceptance Corporation

HARRISBURG – Attorney General Dave Sunday announced that Pennsylvania, along with the attorneys general for 40 other states, has settled with Credit Acceptance Corporation, providing $694 million in cash and debt relief to consumers nationwide in connection with their car loans.

CAC, one of the nation’s largest auto finance companies, provided vehicle loans to consumers who could not afford them and who had limited or impaired credit histories. The settlement also includes injunctive terms that, among other things, provide protections and resources for consumers.

Under the settlement, qualifying Pennsylvania consumers are estimated to receive a total amount of more than $17 million in debt relief and approximately $2.97 million in restitution. Pennsylvania is also estimated to receive $469,623 in additional payments from CAC to be used for future public protection and education purposes.

“This auto loan company did not do their due diligence to ensure the loans they were providing were appropriate for consumers,” Attorney General Sunday said. “Furthermore, the unnecessary add-ons they pushed onto consumers burdened those borrowers. This settlement provides necessary restitution and debt relief for impacted consumers, while allowing many people a chance to keep their vehicles.”

The multistate investigation resolves allegations that the company originated loans it knew or should have known consumers could not afford, based off its own internal evaluations. This resulted in some consumers defaulting on their loans and losing their cars when they were repossessed and sold at auction.

The settlement, which will be effective as of November 2, 2026, requires CAC to provide consumers disclosures about loan risks, give consumers protections from bad outcomes from certain risky CAC loans, and help guard consumers from dealers “packing” CAC auto-loan contracts with unwanted Vehicle Service Contracts and Guaranteed Asset Protection products, among other things.

The settlement provides $60 million in cash restitution that will be distributed to consumers to whom CAC gave particularly risky loans. For some of these CAC loans made between November 1, 2015, and November 30, 2025, the company will also provide, on or before November 2, 2026, $388,000,000 in debt relief to consumers whose cars have been repossessed, and $246,000,000 in debt relief to consumers whose cars have not been repossessed, allowing those consumers to keep their cars. CAC will also pay an additional $15 million to the attorneys general, under the settlement.

The settlement’s injunctive terms include the following long- and short-term requirements designed to meaningfully reform the company’s lending practices:

For consumers with certain risky CAC loans that CAC made starting in December 2025, CAC will provide “off ramps” for loans that fail quickly. Qualifying consumers will get 95% debt relief, and CAC is prohibited from filing collections lawsuits against them. CAC must provide these off ramps for a five-year period starting on November 2, 2026.
The settlement mandates a process to prevent unlawful Vehicle Service Contracts and Guaranteed Asset Protection product packing, including enhanced pre-purchase disclosures, a post-purchase process alerting consumers about the purchase(s) and allowing easier product cancellation, and dealer monitoring.
CAC must provide consumers with pre-loan disclosures about the risks of default and the value of the vehicle.
For seven years, CAC must institute a price cap for vehicle prices at 109% of retail book value for certain consumers.
CAC must implement processes to prevent dealers from raising car prices due to credit worthiness or above advertised prices.

Customers eligible for debt relief will be notified by CAC. Consumers eligible for restitution will be notified by a claims administrator.

The Executive Committee leading the settlement comprises the attorneys general of Maryland, Arkansas, California, Illinois, Minnesota, and New Jersey. Joining the settlement with Pennsylvania are the attorneys general of Alabama, Alaska, Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaiʻi, Indiana, Kentucky, Louisiana, Maine, Michigan, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, and Wisconsin. New York is concurrently settling litigation it brought against CAC in the Southern District of New York.

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