The Shadow
RICHMOND, VA (VR) – 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.
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; of this Virginia will see over $2 million. 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 $15.5 million to the attorneys general, of which Virginia will receive nearly $350,000.00.
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 cancelation, 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.
The Executive Committee leading the settlement comprises the attorneys general of Maryland, Arkansas, California, Illinois, Minnesota, and New Jersey. Joining the settlement are the attorneys general of Alabama, Alaska, Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaiʻi, Indiana, Kentucky, Louisiana, Maine, Michigan, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, and Wisconsin. New York is concurrently settling litigation it brought against CAC in the Southern District of New York.
Consumers with questions about the settlement can contact CAC directly at (800) 634-1506, or call the OAG’s Consumer Protection Hotline, (804) 786-2042. CAC is also required to inform consumers of their eligibility for relief. A settlement administrator will be retained to provide restitution to consumers, and consumers will be able to contact the administrator with questions or to update their information.
The Consent Judgment was filed on September 17, 2026, for approval and entry by the City of Richmond Circuit Court.
