The box at the bottom of this story explains how to tell whether you’re owed money or debt relief, who will contact you, and what to check before you sign a used-car loan.
Credit Acceptance Corp., one of the country’s largest lenders to car buyers with poor credit, will cancel an average of about $7,700 in car-loan debt for each of 60 Vermonters. It will also repay 87 others about $1,400 apiece under a settlement with New York’s attorney general and 40 others, including Vermont’s.
The bigger change is what the Michigan lender has to do for the next five to seven years. Credit Acceptance must cap the prices dealers can charge its riskiest borrowers. It must tell those borrowers the odds of falling behind before they sign. And it must forgive most of what they owe if the car is repossessed in the first year or so.
What Vermont Gets
Vermont’s share is $701,251:
Debt canceled: $462,871 across 60 borrowers, about $7,715 each
Cash repaid: $124,841 across 87 borrowers, about $1,435 each
Paid to the state: $113,539, about 16 cents of every dollar in Vermont’s share. The consent judgment lets the Attorney General use it for consumer-protection work or any other lawful purpose.
Nationally, New York’s attorney general said the deal erases about $634 million in debt for more than 55,000 borrowers. Vermont’s 60 are about one in every 900 of those borrowers. Vermonters are about one in every 525 Americans, so Vermont’s share of the debt relief is smaller than its share of the population.
Whose Loans Qualify
Credit Acceptance gives every loan its own score. The score is the company’s prediction of what percentage of the loan it will collect. The attorneys general allege that borrowers could not reasonably afford many of the low-score loans. That includes loans where Credit Acceptance predicted it would not collect even the amount it lent.
The debt relief covers loans written between November 2015 and November 2025 that met three tests:
Credit Acceptance’s score was below 56.
The car payment took 13% or more of the borrower’s income. On $3,000 a month, that’s a $390 payment.
The borrower still owed money on Dec. 1, 2025.
Borrowers who qualify fall into two situations:
The car was repossessed within 18 months and sold at auction. Many of these borrowers still owed a deficiency balance, the part of the loan the auction didn’t cover. That balance is wiped out.
The car was not repossessed and sold. These borrowers get the rest of the loan canceled, the lien released and the title sent to them.
In both situations, Credit Acceptance must ask the three credit bureaus to delete the account from the borrower’s credit report.
Why a Lender Makes a Loan It Doesn’t Expect to Be Repaid
The answer is in how Credit Acceptance pays dealers. According to Credit Acceptance’s annual filings with the SEC, the dealer gets the buyer’s down payment plus a cash advance from Credit Acceptance. The size of that advance is based on what Credit Acceptance forecasts it will collect. The filings say this combination typically gives the dealer a cash profit at the time of sale.
Credit Acceptance then collects the payments. It doesn’t need a borrower to pay off the full loan to come out ahead. It needs to collect more than it advanced. New York’s attorney general said the average annual interest rate on the loans exceeded 38%.
What Changes at the Dealership
These rules cover buyers with a credit score under 600 who finance through Credit Acceptance. Most also cover buyers with no credit score:
A price cap, for scores under 600. A car can’t sell for more than 109% of its highest book value, from a guide such as Kelley Blue Book or NADA. A car that books at $15,000 tops out at $16,350.
A book-value sheet before you sign. This applies to every buyer whose dealer runs the loan through Credit Acceptance’s system. The dealer must show the car’s estimated retail value so you can compare it to the sticker price. Dealers also can’t raise the price after entering a buyer’s loan application.
A warning about the odds. The dealer must show what share of borrowers with similar credit have fallen behind on car payments, and what happens if you stop paying.
A limit on loan length. A used-car loan can’t run longer than 75 months, or the industry average plus 12 months, whichever is longer.
Income checks. Credit Acceptance must verify what you earn and keep the records.
Add-on products get their own protections. A vehicle service contract is an extended warranty. GAP coverage pays the difference between what you owe and what insurance pays if the car is totaled. The attorneys general allege dealers were packing these products into loans without buyers really agreeing to them. Under the settlement:
You must sign a form showing your monthly payment with and without each add-on.
Credit Acceptance must remind you in writing within 10 days what you bought and how to cancel it.
Canceling has to be simple, and the refund goes toward your loan.
The Repossession Off-Ramp
For loans written after Dec. 1, 2025, Credit Acceptance must forgive 95% of the deficiency balance if the car is repossessed early. It also can’t sue the borrower or sell the debt to a collector. Two groups qualify:
borrowers with credit scores under 500 whose payment took at least 13% of their income
borrowers with no credit score whose payment took a quarter or more of their income
The repossession has to happen within 12 to 18 months, depending on the borrower’s score and income. The off-ramp applies to loans written through November 2031.
Two Readings of the Same Deal
Attorney General Charity Clark said in her release that “there is no room for deception in the marketplace.” Credit Acceptance denies any violation of law, and the judgment includes no finding of liability.
Credit Acceptance’s statement to investors says the settlement “does not require material changes to the Company’s operations.” The statement also says the settlement required no charges beyond money Credit Acceptance had already set aside.
The settlement takes effect Nov. 2, and Credit Acceptance must wipe out the qualifying debt by then. The dealership rules follow within about six months.
SERVICE BOX: Are You Owed Anything?
You don’t apply. If you qualify, you’ll be contacted:
Debt relief: Credit Acceptance will notify you by letter, email or text that your account is closed and nothing more is owed.
Cash repayment: a claims administrator chosen by the states will notify you.
You may qualify for debt relief if:
your car-loan payments go to Credit Acceptance, and
the loan was written between November 2015 and November 2025, and
you still owed money on it as of Dec. 1, 2025.
Cash repayment goes to borrowers the states select, mostly people whose cars were repossessed. The claims administrator will contact you if you’re one of them.
If your debt is canceled: the lien comes off your title, and the account should come off your credit report. You can check your report for free at annualcreditreport.com a few months after Nov. 2.
Before you sign a used-car loan:
Ask for the book-value sheet.
Read the add-on form that shows your payment with and without the extras.
If you already bought an add-on you didn’t want, you can cancel it through Credit Acceptance.
Questions: Vermont Attorney General’s Consumer Assistance Program, 800-649-2424 or ago.vermont.gov/cap.