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North Carolinians will receive $9.5 million after a bipartisan coalition of about 40 state attorneys general settled with a national auto finance company accused of predatory lending.
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Attorney General Jeff Jackson announced the $694 million settlement with Credit Acceptance Corp. The settlement was reached without admission of wrongdoing by Credit Acceptance, the company’s CEO, Vinayak Hegde, said in a statement.
“This company preyed on vulnerable North Carolinians by convincing them to take out car loans they couldn’t afford,” Jackson said in a statement. “We’re getting money back for a lot of those customers, and we’re making sure that they can’t harm other people in this way again.”
The settlement comes as Americans continue to rack up auto debt. At the end of last year, auto debt (including traditional loans and leases) in the United States reached $1.68 trillion, which is about $450 billion more than in late 2018.
The $694 million will be split between restitution and debt relief.
Of it, $60 million — including $2 million for about 1,300 North Carolina drivers — is allocated for restitution for customers who got particularly risky loans. Each North Carolina customer will get, on average, about $1,435.
The remaining $634 million is debt relief for customers who received loans made between Nov. 1, 2015 and Nov. 30, 2025. Of that, $246 million will go to customers whose cars have not been repossessed, and $388 million will go to people whose cars have been repossessed. North Carolina customers will get about $7.5 million in debt relief.
If you’re eligible for restitution, you’ll be notified by a claims administrator. If you’re eligible for debt relief, you’ll be notified by Credit Acceptance. The company said fewer than 3% of its open accounts are affected by settlement-related debt forgiveness.
Credit Acceptance allegedly profited by offering high-interest loans to low-income and high-risk borrowers, knowing that the customers wouldn’t be able to pay off the debt, according to a news release from Jackson’s office. The company allegedly misled customers about the true costs of the loans.
A new report from Durham-based Center for Responsible Lending found that in 2025, subprime borrowers, who are more likely to confront higher interest rates and predatory practices, paid about twice the interest rate of prime borrowers for new and used vehicles. On average, the APR was 20%.
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Credit Acceptance scored loans based on how much it expected it would collect on them, according to the release.
Many people couldn’t afford the low-scored loans, sometimes being unable even to repay the principal amount.
The company allegedly “used aggressive debt-collection tactics” when borrowers defaulted, including repossessing vehicles.
In addition to the restitution and debt relief, the settlement requires Credit Acceptance to take several steps to protect consumers, according to the statement from Jackson’s office.
For example, the company has to disclose to borrowers the value of their vehicle and the risks of defaulting on their loan.
It also has to work to keep optional add-ons such as vehicle service contracts and guaranteed asset products from being packed into a loan, including by making pre-purchase disclosures and allowing customers to more easily cancel products.
Credit Acceptance also has to take steps to prevent dealers from raising vehicle prices because of a customer’s credit worthiness or above advertised prices.
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