Major Auto Lender Pays $694 Million After Knowingly Trapping Borrowers in Unaffordable Loans

A Settlement Built on Broken Deals

Georgia alleged that Credit Acceptance Corporation "engaged in deceptive, unfair, and abusive business practices when offering subprime auto loans to Georgia consumers" — and now, the company is paying a steep price. Credit Acceptance Corporation has agreed to a settlement with 41 attorneys general that will provide $694 million in cash and debt relief nationwide. The announcement, made on September 17, 2026, marks one of the largest multistate auto lending settlements in recent memory.

According to the complaint, Credit Acceptance's internal data showed the company knowingly approved loans for consumers who had a high likelihood of defaulting. The company's internal system predicted some of those borrowers would be unable to repay even the principal. Consumer advocates were blunt about what that means. Sarah Mancini, an attorney with the National Consumer Law Center, called them "really transactions that were built to fail."

What Georgia Borrowers Stand to Gain

Of the total settlement amount, $28 million will go directly to 4,890 Georgia consumers. The relief comes in different forms depending on each borrower's situation. Some consumers whose vehicles were repossessed will receive cash payments, while others will have outstanding loan balances forgiven.

The company will give $388 million in debt relief to qualifying consumers whose cars were repossessed and $246 million to borrowers whose vehicles haven't been repossessed, allowing them to keep their cars. The debt relief applies to certain loans made between November 1, 2015, and November 30, 2025. Eligible consumers don't need to hunt down the right office — consumers eligible for relief will be contacted by mail either by Credit Acceptance or by an administrator working on behalf of the participating states. Those with questions can also call 1-800-634-1506.

A Nationwide Problem, A Nationwide Response

Credit Acceptance Corporation is one of the nation's largest auto finance companies, providing car loans to consumers with limited or impaired credit histories. That focus on vulnerable borrowers is precisely what drew scrutiny. States alleged the company made car loans it knew or should have known many borrowers could not afford, based on its own internal scoring system. Many consumers later defaulted and lost their cars to repossession. "While their customers struggled to make payments, CAC made millions," New York Attorney General Letitia James said in a statement.

Along with South Carolina and Georgia, states in the settlement include Alabama, Alaska, Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Hawaii, Indiana, Kentucky, Louisiana, Maine, Michigan, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, and Wisconsin.

Changes Required — But No Admission of Guilt

Credit Acceptance does not admit wrongdoing as part of the settlement. The company's CEO framed the resolution in measured terms, saying "This resolution provides certainty for our business, our dealer partners and the customers we serve." Still, the deal comes with real strings attached. The settlement includes injunctive terms requiring Credit Acceptance to provide disclosures about loan risks, offer protections from certain risky loans, and help guard consumers from dealers "packing" auto-loan contracts with unwanted Vehicle Service Contracts and Guaranteed Asset Protection products.

The settlement goes into effect November 2, 2026. For the nearly 5,000 Georgians — and hundreds of thousands of borrowers nationwide — who were steered into loans designed to drain rather than build their financial footing, the settlement won't undo the damage already done. But it does signal that state attorneys general are increasingly willing to hold powerful lenders accountable when their own data shows they knew the harm they were causing before the ink even dried.