I Tracked Down the Company Making Billions Off Deceptive Car Loans

Quick Overview

Credit Acceptance Corporation (CAC) profits by intentionally structuring subprime auto loans to fail, causing borrowers to lose their vehicles and pay dealers inflated prices, as revealed by a lawsuit filed by the CFPB and the New York Attorney General, which was later withdrawn by the Trump administration, allowing CAC to continue its predatory practices.

Key Points: CAC's business model pushes dealers to inflate vehicle prices by about 40% more than the actual value for loans sold to subprime borrowers. The CFPB and NY Attorney General sued CAC, alleging their lending model is indifferent to a consumer's ability to repay, expecting to collect on nearly 39% of loans nationwide even if they default. In the case of Tanniqwa Cross, who bought a 2014 Dodge Durango, the total cost including interest was $46,556.66 against a down payment of $1,940, leading to a monthly payment of $676.01. The lawsuit, initiated in January 2023, was dismissed after the Trump administration's CFPB withdrew its support in April 2025, leaving only the NYAG as the plaintiff. Don Foss, founder of Credit Acceptance, became a billionaire by lending to consumers with median incomes of just $35,000, often on cars worth significantly less than the loan amount. The CFPB found that CAC's algorithm projects how much money it expects to collect on loans, not whether the consumer can afford to repay them.

Context: This video investigates the business practices of Credit Acceptance Corporation (CAC), one of the largest auto lenders specializing in subprime loans. The investigation focuses on how CAC allegedly works with auto dealerships to profit excessively from borrowers with poor credit histories, often leading to loan defaults and vehicle repossessions. The narrative features testimonies from individuals affected by these loans, like Tanniqwa Cross, and analysis from financial counselors and legal experts regarding the predatory nature of the business model.

Detailed Analysis

The investigation reveals that Credit Acceptance Corporation (CAC) profits heavily by structuring high-interest, subprime auto loans where the vehicle price is often significantly inflated, sometimes by 40% above market value, which is crucial for CAC's profit structure when consumers default. The CFPB and the New York Attorney General sued CAC, alleging that its lending algorithm focuses on maximizing collections rather than ensuring affordability, projecting that nearly 39% of loans would result in default. Tanniqwa Cross’s case exemplifies this, where she financed a 2014 Dodge Durango for a total cost of $46,556.66 via a loan with a high APR, only for the vehicle to break down shortly after. The lawsuit against CAC was ultimately weakened when the CFPB withdrew its participation in April 2025, leaving the NYAG to pursue the case alone. Experts confirm that CAC's model incentivizes dealers to sell overpriced cars to high-risk borrowers, as CAC pays dealers regardless of the borrower's long-term success. John Van Alst, a loan officer, notes that his credit union could offer similar borrowers much lower rates (e.g., 7-8% vs. CAC's rates). The founder, Don Foss, built a billion-dollar business by targeting individuals with low incomes, ensuring high profit margins through these risky lending terms and subsequent collection/repossession efforts.