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Vermont joins 40-state settlement with Credit Acceptance over risky car loans

Attorney General Charity Clark said the auto lender will provide $694 million in cash and debt relief nationwide, including about $701,000 tied to Vermont borrowers, to resolve allegations it made loans consumers could not afford.

Vermont has joined a 40-state settlement with Credit Acceptance Corporation that resolves allegations the auto lender issued loans it knew or should have known borrowers could not afford, Attorney General Charity Clark said Friday.

Under the agreement, the company will provide $694 million in cash and debt relief to consumers nationwide in connection with their car loans, according to the attorney general's office. Vermont's share totals $701,251, including $124,841 in restitution to 87 consumers and $462,871 in debt relief to 60 consumers. The remaining $113,539 goes to the state.

Credit Acceptance, one of the country's largest auto finance companies, lends to buyers with limited or damaged credit histories and assigns each loan an internal score predicting how much of it the company expects to collect, the office said. The attorneys general allege many low-scoring loans were unaffordable — including some where the company predicted borrowers would not repay even the principal — and that many of those borrowers defaulted and lost their cars to repossession and auction.

The settlement also requires the company to disclose default risks and vehicle values before a loan is signed, to cap vehicle prices at 109% of retail book value for certain buyers for seven years, and to curb dealers adding unwanted service contracts and gap coverage to loan agreements.

For certain riskier loans made starting in December 2025 that fail quickly, the company must offer qualifying borrowers 95% debt relief and cannot sue them for collection, the office said. That provision runs for five years beginning Nov. 2.

Borrowers eligible for debt relief will be notified by the company, and those eligible for restitution by a claims administrator, prosecutors said. Vermont consumers with questions can call the attorney general's Consumer Assistance Program at 800-649-2424.

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