The news is encouraging for thousands of debtors in the United States: more than 55,000 consumers will cease to owe the outstanding balance of certain car loans as part of a $700 million deal reached with Credit Acceptance Corporation. And there’s more: other thousands of people who lost their vehicles could get compensation. Who is qualifying? What should those who can access the refund do? Let us see.
A multi-billion dollar deal reached with one of the leading car lending companies targeting low-credit people could relieve the finances of tens of thousands of consumers in the United States.
Credit Acceptance Corporation (CAC) will have to clear more than $630 million in debt related to car loans from more than 55,000 people, the New York Attorney General’s Office announced on September 17.
The deal also includes $60 million in compensation for thousands of consumers who lost their vehicles because of the embargo and another $15.5 million in fines for participating states.
The resolution puts an end to several years of litigation and investigations into the practices used by the company to finance consumer vehicles with low credit scores or no credit history.
The main benefit from the deal affects more than 55,000 Credit Acceptance Corporation borrowers in different parts of the country. For those consumers, the company will have to completely remove certain outstanding balances from their loans. The New York Attorney General’s Office estimates that the measure represents more than $630 million in debt relief.
The company itself confirmed that the agreement envisages the condonation of all pending balances for certain customers.
Not all current or previous Credit Acceptance customers are necessarily included. The agreement is aimed at certain loans achieved by the investigation and the conditions established in the consent sentences.
At the moment, the official announcement does not establish a general form that consumers must complete to apply for debt cancellation.
Those who have funded a vehicle through Credit Acceptance should therefore pay attention to any communications related to their account and verify the information through the company’s official channels or the state’s prosecutor’s office.
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Credit Acceptance will have to contribute $60 million to a consumer compensation fund, which will be administered by the participating prosecutors.
That money will go to thousands of people who, according to authorities, were affected by the loans and lost their vehicles through re-seizure processes or embargo shortly after obtaining funding.
The New York Attorney General’s Office provides details of the deal and the planned financial relief for consumers.
In New York alone, around 2,500 consumers will be included in debt cancellation. Authorities estimate that the state will receive approximately $34 million in debt relief, restitutions and fines.
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Credit Acceptance specializes in the market known as subprime auto lending, i.e. loans to buy vehicles intended primarily for people with low credit scores or with little financial history.
The investigation that gave rise to the case began years ago. In January 2023, the New York Attorney General and the U.S. Office for Financial Consumer Protection (CFPB) filed a lawsuit against the company.
The authorities argued that some consumers had been placed on loans that they could hardly cope with and that, in addition, certain transactions incorporated additional costly products.
The CFPB documents in its official file that the lawsuit filed in 2023 accused Credit Acceptance of misleading and abusive practices related to its loans. The body subsequently withdrew from the cause in April 2025.
The New York research found that the average annual interest rate of the loans analyzed exceeded 38%, while some loans reached more than 100%.
According to the prosecutor’s office, half of certain consumers ended up losing their vehicles during the validity of their loans.
Credit Acceptance, for its part, noted that the resolution was reached without admitting responsibility or undue conduct when announcing the agreement. The company assured that the deal will allow it to close the dispute and have greater clarity about regulatory expectations for the sector.
The deal also introduces measures that go beyond $700 million. Credit Acceptance must modify or strengthen controls related to the information consumers receive before borrowing, the price of vehicles, the additional products included in the financing and the supervision of dealers.
It also established a protection relevant to some risk-rated lenders. If certain customers stop paying a loan within a period of 12 or 18 months and subsequently the vehicle is embarked and sold, the company must forgive 95% of the remaining debt and can only attempt to collect the remaining 5%.
In those cases, it will not be able to sue the consumer to collect that debt or subsequently sell it to another collection company, according to the New York Attorney General.
Another of the reforms seeks to prevent a buyer from ending up paying for additional products without understanding that they were incorporated into the loan. The company must inform consumers directly about certain extra purchases and offer a procedure to cancel them without having to return the vehicle.
The resolution has a broad scope and was negotiated by a coalition of state authorities. Participate, among others, California, Florida, New York, New Jersey, Arizona, Colorado, Illinois, Michigan, North Carolina, Pennsylvania, Washington and Wisconsin, as well as the District of Columbia.
Also part are Alabama, Alaska, Arkansas, Connecticut, Delaware, Georgia, Hawaii, Indiana, Kentucky, Louisiana, Maine, Maryland, Minnesota, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont and Virginia.
For consumers with Credit Acceptance loans, the recommendation is to check whether their state participates in the agreement and review any notices they receive about changes in their account balance or possible compensations.
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The deal comes at a time when financing a vehicle represents a significant burden for millions of U.S. homes.
Car loans are among the main sources of consumer debt in the country. By 2026, the total balance of this type of loans runs around $1.7 trillion, in a context in which vehicle prices and financing rates continue to pressure household budgets.
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For those who have difficulty paying for a vehicle, the Credit Acceptance case also shows the importance of reviewing not only the monthly fee, but the APR, the total cost of the loan, the additional products included and how much will end up being paid over the entire life of the loan.
In this case, more than 55,000 consumers will see the balance of certain loans removed as a result of the agreement. For others affected, the resolution opens up the possibility of receiving part of the $60 million reserved for restitutions.
