October Update on the Credit Acceptance Corporation Settlement
Credit Acceptance Corporation, a subprime auto lender, has agreed to a $694 million settlement with 41 attorneys general, including South Carolina’s. The deal takes effect on November 2, 2026, and it could erase car loan debt for some South Carolina drivers. Hays Cauley, P.C., reviews credit reporting errors for consumers who want to make sure that relief shows up the right way.
What Is in the Credit Acceptance Settlement?
Credit Acceptance Corporation, a subprime auto lender, has agreed to a settlement with 41 attorneys general, including South Carolina’s, that provides $694 million in cash and debt relief to consumers.
Most of the money comes as debt relief rather than cash. The $694 million in consumer relief breaks down like this:
- $60 million in cash restitution for borrowers with especially risky loans
- $388 million in debt relief for borrowers whose cars were repossessed
- $246 million in debt relief for borrowers who still have their cars
Credit Acceptance will also pay an additional $15 million to the attorneys general.
Relief covers certain loans made from November 1, 2015, through November 30, 2025. South Carolina borrowers stand to receive an estimated $1.3 million in restitution and $11.8 million in debt relief.
Why the States Sued Credit Acceptance
The states alleged that the lender approved loans it knew or should have known borrowers could not afford, resulting in defaults and repossessions. They also accused the company of allowing dealers to add charges for vehicle service contracts and Guaranteed Asset Protection (GAP) coverage. Some buyers said dealers included these products without their knowledge or told them the products were required.
The Consumer Financial Protection Bureau and New York sued the company in January 2023. The CFPB withdrew in April 2025, but state attorneys general kept pressing the company. New York joined the multistate deal and is settling its federal lawsuit separately.
Do South Carolina Borrowers Need to File a Claim?
The attorneys general say Credit Acceptance will notify borrowers who qualify for debt relief. A settlement administrator will contact people who qualify for cash restitution. You should not have to pay anyone to receive your share. Keep your mailing address current with the lender so that notices reach you and be careful with unexpected calls requesting account details.
New Limits on Credit Acceptance Loans
The settlement also changes how the company lends going forward. Under the multistate settlement terms, the company must follow these rules:
- A cap on vehicle prices at 109 percent of retail book value for certain buyers, lasting seven years
- 95 percent debt relief and no collection lawsuits for qualifying borrowers on certain risky loans made since December 2025, for five years
- Clearer warnings about default risk and vehicle value before you sign
- Easier ways to cancel add-on products after a purchase
These changes mainly protect future borrowers. They do not replace relief owed under past loans.
Make Sure Forgiven Car Debt Leaves Your Credit Report
Once a balance is waived, your credit report should no longer show it as owed. Hays Cauley, P.C., has over 30 years of experience helping consumers challenge reports that contain incorrect details. Call 843-665-1717 for a free consultation, or reach our office online if you spot a forgiven loan still listed as unpaid.