Colorado joins $694M nationwide settlement with subprime auto lender Credit Acceptance Corporation

Colorado joins $694M nationwide settlement with subprime auto lender Credit Acceptance Corporation

Sept. 17, 2026 (DENVER) - Attorney General Phil Weiser announced today that Colorado, along with 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 histories. 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. 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 multistate investigation found that CAC originated car loans that the company knew or should have known consumers could not afford, and the company deceived consumers into purchasing add on products to get financing for their car purchase. Buying a new vehicle is stressful enough without having to deal with the kind of predatory practices we allege in the CAC case. I'll continue to fight to protect consumers and hold irresponsible businesses accountable," said Attorney General Weiser.

The settlement, effective November 2, 2026, also resolves allegations that CAC encouraged and failed to reasonably prevent unlawful Vehicle Service Contracts and Guaranteed Asset Protection product "packing" by auto dealers in CAC's network. 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 million in debt relief to consumers whose cars were repossessed, and $246 million in debt relief to consumers whose cars were not repossessed, allowing those consumers to keep their cars. CAC must also pay an additional $15 million to the attorneys general.

Nearly 500 Colorado consumers will receive $678,736 in restitution, and the state will receive a $186,455 cash payment. Customers eligible for debt relief will be notified by CAC. Consumers eligible for restitution will be notified by a claims administrator.

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.

Joining the settlement are the attorneys general of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaiʻi, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, and Wisconsin.

Read the complaint (PDF).

Read the consent judgment (PDF).

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Media Contact:
Lawrence Pacheco
Chief Communications Officer
(720) 508-6553 office
[email protected]