California Attorney General Rob Bonta joined a coalition of 40 attorneys general on September 17, 2026, to announce a nationwide settlement with Credit Acceptance Corporation (CAC). The settlement addresses allegations that the auto finance company engaged in unlawful business practices, including originating auto loans that the company knew were likely to default.
The settlement provides $694 million in total cash and debt relief to consumers nationwide. For California consumers, the agreement provides an estimated $1.46 million in restitution and $5.4 million in debt relief. Additionally, CAC must pay $15 million to the participating attorneys general, with $574,000 allocated to California.
The agreement includes $60 million in cash restitution for consumers who received particularly risky loans. For certain risky loans issued between November 1, 2015, and November 30, 2025, CAC is required to provide $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 them to keep their vehicles. This debt relief must be provided on or before November 2, 2026.
New injunctive terms require CAC to implement several reforms. For loans starting in December 2025, CAC must provide "off ramps" for loans that fail quickly, offering 95% debt relief and prohibiting collections lawsuits for a five-year period starting November 2, 2026. The settlement also mandates enhanced pre-purchase disclosures regarding loan risks and vehicle values, and requires a price cap for vehicle prices at 109% of retail book value for certain consumers for seven years.
The settlement resolves allegations that CAC encouraged or failed to prevent dealers from unlawfully packing auto-loan contracts with unwanted Vehicle Service Contracts (VSC) and Guaranteed Asset Protection (GAP) products. The attorneys general allege that CAC used a proprietary score to predict loan collections, sometimes originating loans where the company predicted the consumer would not pay back even the principal amount. This settlement also resolves a lawsuit originally filed by the Consumer Financial Protection Bureau and the New York Attorney General.
Eligible consumers who have already been identified will be notified and do not need to take any action to receive restitution or debt relief.
