Attorney General Jay Jones Announces $694 Million Settlement with Subprime Auto Lender Credit Acceptance Corporation

RICHMOND, Va. – Attorney General Jay Jones announced that Virginia, along with the attorneys general for 40 other states, has entered into a settlement with Credit Acceptance Corporation (CAC) providing $694 million in cash and debt relief to consumers in connection with their car loans. CAC is one of the nation’s largest auto finance companies, providing car loans to consumers with limited or impaired credit history. The Commonwealth will receive over $2 million in restitution and over $17 million in debt relief.

“Companies that are reckless with consumers’ finances will be held to account. For years, CAC took advantage of Virginians through misleading practices. These deceitful efforts have a tremendous negative impact in a moment when Virginians are already facing financial strain. Every Virginian is entitled to a fair, transparent credit market when they need to buy a car,” said Attorney General Jay Jones. “I am proud of our team for holding lenders accountable for predatory practices. We are thrilled to be putting money back in the pockets of hardworking Virginians.”

The settlement also includes injunctive terms that, among other things, require 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 (VSC) and Guaranteed Asset Protection (GAP) products.

The multistate investigation resolves allegations that CAC originated loans that the company knew or should have known consumers could not afford. CAC gives a proprietary “score” to each of its loans representing its prediction of the percentage amount CAC will collect on the loan from all sources. The attorneys general allege that consumers could not reasonably afford many of CAC’s low “score” loans, including those where CAC predicted the consumer would not pay back even the loan’s principal loan amount. Unsurprisingly, many of those low “score” loans resulted in consumers defaulting on their loans and losing their cars when they were repossessed and sold at auction.

Email Jay Jones at:

Jay Jones: RPickett@oag.state.va.us,

Email Jay Jones at:

Jay Jones: RPickett@oag.state.va.us,