Tuesday, March 28Welcome

True cost of Credit Acceptance Corporation loan is ‘hidden’, regulator says

Southfield-based Credit Acceptance Corporation has found success in providing auto loans to people with poor credit ratings who might otherwise not be eligible for auto loans, but financially vulnerable. It has been accused by regulators of engaging in predatory deals that lead unsuspecting buyers to failure.

A lawsuit filed on Wednesday said that even lenders have to pay back the full amount because used car auto loans are “loaded with exorbitant interest rates, expensive add-on items, and borrowers are in debt.” I believe we can’t afford it.

New York State Attorney General Letitia James and the Consumer Financial Protection Bureau jointly sued Credit Acceptance Corporation on Wednesday for tricking thousands of low-income New Yorkers into high-interest auto loans.

Add-on products that are ultimately financed and drive up borrowing costs include vehicle service contracts that promise to repair or replace certain parts, or asset protection products with guarantees that cover the amount owed by the borrower after insurance is paid, or “GAP” is included. If your used car or truck is stolen or wrecked in an accident.

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