UPDATED: Credit Acceptance Corporation Reaches $694M Settlement With 41 States Including Delaware and Maryland
September 18, 2026/
Maryland and 40 other states, including Delaware, have reached a $694-million settlement with Credit Acceptance Corporation (CAC), a major auto lender that serves consumers with limited or poor credit. The settlement resolves allegations that CAC made unaffordable auto loans that led to defaults and repossessions, and failed to adequately prevent dealers from adding unwanted vehicle service contracts and GAP products to loans.
The agreement includes $60-million in cash restitution, $388-million in debt relief for borrowers whose vehicles were repossessed, and $246-million for borrowers who kept their vehicles. CAC must also make changes to its lending practices, including providing clearer loan-risk disclosures, strengthening protections against unwanted add-on products and offering 95% debt relief on certain qualifying high-risk loans that fail quickly.
The settlement takes effect November 2nd, 2026, and eligible consumers will be notified. Delaware will receive $183,523 from the settlement.
Additional information from Delaware AG Kathy Jennings:
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.
“Access to a reliable vehicle is critical for so many people—it is their lifeline for commuting to work, obtaining groceries, and attending medical appointments. Those who seek out financing to cover their purchase should not be forced into loans they cannot afford,” said AG Jennings. “My office will continue to fight to ensure that Delawareans can access life’s basic necessities without being preyed upon.”
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.
The settlement, which will be effective as of November 2, 2026, also resolves allegations that CAC encouraged and failed to reasonably prevent unlawful VSC and GAP product “packing” by auto dealers in CAC’s network. The attorneys general allege that CAC’s dealer compensation methodology and lack of reasonable dealer oversight resulted in dealers aggressively selling VSCs and GAP products in connection with CAC loans when consumers were either unaware they were purchasing the products or were led to believe the products had to be purchased for the consumer to get financing.
The settlement provides $60 million in cash restitution that will be distributed to consumers to whom CAC gave particularly risky loans. For certain risky CAC loans made between November 1, 2015, and November 30, 2025, CAC is also required to 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 must also pay an additional $15 million to the attorneys general.
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 VSC and GAP 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.