Credit Acceptance Must Erase $634 Million in Car-Loan Debt and Pay $60 Million in Cash to Borrowers Under a Settlement With 41 Attorneys General

The date by which Credit Acceptance Corporation had to provide $634 million in car-loan debt relief was Monday, Nov. 2, when a settlement with state attorneys general took effect. The subprime auto lender must also pay $60 million in cash restitution to borrowers with particularly risky loans.

The Connecticut attorney general’s office says 41 attorneys general joined the deal, which it values at $694 million in cash and debt relief. None of the state releases gives a dollar figure for any one borrower.

Three Pieces Make Up the $694 Million

According to the Connecticut attorney general’s Sept. 17 announcement, the settlement directs $388 million in debt relief to borrowers whose cars were repossessed and $246 million to borrowers whose cars were not repossessed. Together those two pieces are $634 million in debt relief. The third piece is $60 million in cash restitution for consumers with particularly risky loans, which brings the total to $694 million.

The company also pays $15 million to the attorneys general. Connecticut’s release describes that sum as additional to the $694 million, so it does not go to borrowers.

The Michigan attorney general’s release lists the same pieces and says Credit Acceptance must provide the debt relief by Nov. 2, 2026, with eligible consumers allowed to keep their cars.

Loans From 2015 Through November 2025 Qualify

The debt relief covers certain risky Credit Acceptance loans made between Nov. 1, 2015 and Nov. 30, 2025, according to the Connecticut release. The releases do not say how many borrowers that is, and they do not publish a per-borrower amount, so the $634 million cannot be divided into a typical payment.

Newer loans get a different protection. For specified risky loans made from December 2025 onward that fail quickly, Connecticut’s release says borrowers can get 95% debt relief, and Credit Acceptance cannot sue them to collect for five years.

State-level totals show how the money spreads out. Michigan says its consumers will receive about $70.3 million in debt forgiveness, and Michigan itself receives $790,474. The Wisconsin Department of Justice estimates Wisconsin consumers will receive more than $10 million in debt relief and $959,988 in restitution. Connecticut says its consumers are eligible for up to $2 million in relief, plus a $177,650 payment to the state. These are state totals, not individual payments.

Notices Come From Credit Acceptance or an Administrator

Borrowers do not file a claim, according to the way the releases describe the process. Connecticut and Michigan both say Credit Acceptance will notify customers who are eligible for debt relief, and a settlement administrator will notify consumers who are eligible for restitution. Wisconsin’s bulletin says eligible consumers “will be notified,” and none of the releases mention a claim form or filing deadline.

The Wisconsin Department of Justice gives 800-634-1506 for questions. Arkansas Attorney General Tim Griffin’s office lists (501) 682-2007 for Arkansas residents.

The restitution payments are the piece with the least detail. The releases do not state when the $60 million will be paid or how it will be split among eligible consumers.

What the Attorneys General Said the Lender Did

The states allege that Credit Acceptance made loans consumers could not reasonably afford, including loans the company predicted would not repay even the principal, using its proprietary score. They also allege it encouraged, or failed to reasonably prevent, dealers from packing loans with unwanted vehicle service contracts and GAP products.

Connecticut Attorney General William Tong said the company “profited off risky loans destined to fail, padded with worthless services and so-called protections.” In the Arkansas release, Griffin said that since 2015 the company “allowed consumers to enter into loans that the lender knew the consumers could not afford.”

The settlement also changes how the company operates. Michigan’s release lists pre-loan disclosures about default risk and vehicle value, anti-packing measures that include post-purchase alerts with easier cancellation and dealer monitoring, and, for seven years, a price cap at 109% of retail book value for certain consumers.

Releases Disagree on How Many States Signed

The state releases do not use the same count. Connecticut says it joined 40 other attorneys general, for 41. Arkansas says 40 attorneys general are in the coalition, including the District of Columbia. Wisconsin says it and 38 other jurisdictions are in the coalition. This article uses 41 attorneys general because that is the figure in the Connecticut release.

New York is not part of the group. Connecticut, Michigan, Wisconsin and Arkansas all say New York is settling separately, and the Connecticut and Wisconsin releases place that case in the Southern District of New York.

The Arkansas release also names six lead states: Maryland, Arkansas, California, Illinois, Minnesota and New Jersey. The Money Overview reports that the state announcements cite the same dollar pieces and that anyone contacted by a third party asking for a fee or account details should treat it as outside the settlement process.

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This article was produced with AI assistance and edited for accuracy against the sources linked above.

Image: 293.xx.xxx.xx – CC BY-SA 3.0/Wikimedia Commons