A subprime car loan can turn into a debt that outlives the car. Under a settlement announced September 17, 2026, Credit Acceptance Corporation must now forgive 95 percent of what is owed when certain at-risk borrowers default within 12 or 18 months and the vehicle is repossessed and sold. New York Attorney General Letitia James’s office describes the term in its announcement of the deal, saying the lender “will only be allowed to collect the remaining five percent.”
How the 95 percent rule works
The rule covers one bad outcome. A borrower falls behind early, the lender takes the car and sells it, and the sale does not cover the loan. Normally the borrower still owes the gap. For covered borrowers, Credit Acceptance keeps only five percent of the balance.
The attorney general’s release says “certain at-risk borrowers” are covered. It does not define who falls in that group, and it does not say which loan dates apply to the 95 percent term. Maryland’s attorney general, who helped lead the multistate side of the deal, says in its own announcement that the 95 percent relief comes with a five-year “off ramp” period for qualifying risky loans made from December 2025 onward.
Who is covered, and who is told
Credit Acceptance is a subprime auto lender. The settlement reaches loans made from November 1, 2015 through November 30, 2025, according to Maryland, and the New York attorney general says it brings more than $630 million in debt relief for tens of thousands of borrowers across the country. More than 55,000 consumers nationwide are included, about 2,500 of them in New York.
Maryland says the relief is split between $388 million for people whose cars were repossessed and $246 million for people who kept their cars. The open question for a household is whether a Credit Acceptance loan, current or past, sits in one of those groups.
Nobody has to file a form to get any of this. Maryland says that “customers eligible for debt relief will be notified by CAC” and that people eligible for restitution will hear from a claims administrator. California Attorney General Rob Bonta’s office says eligible consumers “have already been identified, will be notified, and do not need to take action.”
A settlement letter that arrives with several dates in it is easy to misread, and The Settlement & Refund Recovery System includes the four-date rule for reading a settlement notice and a claim log and payment tracker for relief that arrives without a form.
Open the four-date notice guide for a Credit Acceptance letter →
Restitution is a different track
Debt relief and restitution are not the same thing. Debt relief lowers or erases what a borrower still owes. Restitution is cash paid to borrowers who were misled and lost their vehicles within months of getting the loan, according to the New York attorney general. Maryland puts the cash pool at $60 million and says a claims administrator, not the lender, will contact the people who qualify. New York says thousands of consumers will receive that restitution.
California’s office adds a deadline for the lender: all relief must be provided by November 2, 2026. For a borrower, that means any letter about debt relief should show up soon, and a balance that still shows the old amount after that date is worth a call to the lender and a question to the state attorney general.
Rules for new Credit Acceptance loans
The deal also changes how the company does business going forward. According to Maryland, Credit Acceptance must give clearer disclosures about default risk and vehicle value before a loan is signed, and about vehicle service contracts and GAP coverage afterward, including a way to cancel them. The state says the vehicle price is capped at 109 percent of retail book value for seven years, and dealers can no longer raise a price because of the buyer’s credit.
Those limits matter for the 95 percent rule because the rule covers early failures. A loan that starts with a price near book value and a plain explanation of default risk is less likely to become the kind of loan that ends in a repossession within a year.
Keeping Credit Acceptance paperwork in order
The route that costs nothing is the settlement page of the state attorney general. California’s announcement explains the debt relief and restitution tracks, and each state attorney general’s office has its own consumer line for questions. The New York office takes calls at 1-800-771-7755.
Anyone with a Credit Acceptance loan can pull together the loan contract, the most recent statement, any repossession or sale notice, and every letter that has come from the lender or a claims administrator since September. Write down the date on each letter and what it says about the balance. If a repossession notice shows the sale price, keep it, since the gap between that price and the loan balance is what the 95 percent term works on.
Because eligible borrowers are to be notified, a call or text asking for a fee, a bank login or a Social Security number to unlock relief does not match anything the attorneys general describe. The California attorney general’s office says plainly that eligible consumers “do not need to take action,” and Maryland says the lender and the claims administrator will do the notifying.
For borrowers sorting letters from a lender and a claims administrator, The Settlement & Refund Recovery System adds a claim log and payment tracker, along with the scam-proof rules for telling real notices from imitations.
Get the payment tracker for Credit Acceptance relief letters →
This article was produced with AI assistance and edited for accuracy against the attorney general announcements linked above.
