Complaint Review: Credit Acceptance Corporation

Regarding how CAC makes it's money...It's old, but this company hasn't changed a bit.

The investor relations page on their site even claims that the company has had the same buisness model since it's inception.

http://www.washingtoncitypaper.com/display.php?id=16926

A large class action was settled against CAC for asessing interest judgments.

Notice just how many times this man defends this company with numbers and false legal principles. Does he work for CAC?

Although we are both liberally sprinkling our comments with the word "may", Thomas misses the point regarding my scenario about the dealer's very possible misrepresentation of the vehicle as in good condition, reliable transportation, cream puff, only driven by a little old lady to church on Sunday, etc. While such expressions can certainly create express warranties, they can also be considered fraudulent, especially if the dealer knows the car is a total piece of junk, which, in my experience, is often the case. It is a common misconception that selling a car "as is" gets the dealer off the hook for fraud. That just isn't so.

As for the statute of limitations issue, if by saying the account remained "active" Thomas means payments were being made on it, he is right that the statute of limitations would only start to run from the date of the last payment. But if he means only that the creditor is actively attempting to collect, the statute of limitations will continue to run if such "active" attempts do not result in payment. The vast majority of state courts faced with this issue have ruled that unless the creditor files suit within four years from the date of default or the date of the last payment on an automobile installment contract, the creditor's claim will be barred by the statute of limitations.

Although we are both liberally sprinkling our comments with the word "may", Thomas misses the point regarding my scenario about the dealer's very possible misrepresentation of the vehicle as in good condition, reliable transportation, cream puff, only driven by a little old lady to church on Sunday, etc. While such expressions can certainly create express warranties, they can also be considered fraudulent, especially if the dealer knows the car is a total piece of junk, which, in my experience, is often the case. It is a common misconception that selling a car "as is" gets the dealer off the hook for fraud. That just isn't so.

As for the statute of limitations issue, if by saying the account remained "active" Thomas means payments were being made on it, he is right that the statute of limitations would only start to run from the date of the last payment. But if he means only that the creditor is actively attempting to collect, the statute of limitations will continue to run if such "active" attempts do not result in payment. The vast majority of state courts faced with this issue have ruled that unless the creditor files suit within four years from the date of default or the date of the last payment on an automobile installment contract, the creditor's claim will be barred by the statute of limitations.

Although we are both liberally sprinkling our comments with the word "may", Thomas misses the point regarding my scenario about the dealer's very possible misrepresentation of the vehicle as in good condition, reliable transportation, cream puff, only driven by a little old lady to church on Sunday, etc. While such expressions can certainly create express warranties, they can also be considered fraudulent, especially if the dealer knows the car is a total piece of junk, which, in my experience, is often the case. It is a common misconception that selling a car "as is" gets the dealer off the hook for fraud. That just isn't so.

As for the statute of limitations issue, if by saying the account remained "active" Thomas means payments were being made on it, he is right that the statute of limitations would only start to run from the date of the last payment. But if he means only that the creditor is actively attempting to collect, the statute of limitations will continue to run if such "active" attempts do not result in payment. The vast majority of state courts faced with this issue have ruled that unless the creditor files suit within four years from the date of default or the date of the last payment on an automobile installment contract, the creditor's claim will be barred by the statute of limitations.

Although we are both liberally sprinkling our comments with the word "may", Thomas misses the point regarding my scenario about the dealer's very possible misrepresentation of the vehicle as in good condition, reliable transportation, cream puff, only driven by a little old lady to church on Sunday, etc. While such expressions can certainly create express warranties, they can also be considered fraudulent, especially if the dealer knows the car is a total piece of junk, which, in my experience, is often the case. It is a common misconception that selling a car "as is" gets the dealer off the hook for fraud. That just isn't so.

As for the statute of limitations issue, if by saying the account remained "active" Thomas means payments were being made on it, he is right that the statute of limitations would only start to run from the date of the last payment. But if he means only that the creditor is actively attempting to collect, the statute of limitations will continue to run if such "active" attempts do not result in payment. The vast majority of state courts faced with this issue have ruled that unless the creditor files suit within four years from the date of default or the date of the last payment on an automobile installment contract, the creditor's claim will be barred by the statute of limitations.

The bill of sale for the car may have stated something like "30 day warranty only". When IS a car unfit for its intended purpose? If a standard repair... or repairs... otherwise known as maintanence.... to WEAR items can make it operable, then it is "fit".

A tranny or motor overhaul IS a standard repair because these ARE wear items. "It broke and was unrepairable after about two months. " does NOT define what the situation was that MIGHT make the vehicle "unfit".

Usually, "unfit" means the vehicle had been "totaled" and was later "restored" with its title "refurbished" from a salavage title to a standard title. A broken frame WOULD NOT BE a "standard repair".

OP posted "They have been in touch with me on and off but I have never been able to settle for the amount they wanted. " raises a HUGE cloud by suggesting that, nay, stating that, Credit Acceptance Corporation has ACTIVELY been pursuing their money. So the statute of limitations you quote may simply not apply because the account was NOT dormant.

The loan was unpaid for many years and the time value of money results in the balance increase.

Thomas is wrong.

If you will look on the reverse side of your installment contract it will have a bold-print clause that says "NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS AND SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER."

This means that Credit Acceptance can be held responsible for the dealer having sold you a piece of junk while undoubtedly misrepresenting it as reliable transportation in good condition.

As for the age of the loan Thomas points to as justifying a $14,000+ judgment, you might want to check New York's Uniform Commercial Code, specifically UCC Article 2, section 725, the statute of limitations for filing suit on a contract for the sale of goods. It is four years in most states, so it may be that CAC's suit is barred by the statute of limitations.

However, it is not clear from Renee's post as to when the judgment was entered or when the suit upon which it was based was filed, so it may well be that CAC's suit was filed within the time limit. Just something to check out.

The car and the car loan are two different items.

The car was junk? Or did you neglect it? Either way, it was YOUR choice to buy and use that particular car, it was NOT Credit Acceptance Corporation's decision that you should buy and use that particular car- right? So the "fate" of the car, so to speak, is irrelevant to how you should have delt with the loan.

The loan was $7497.80 in 1995, and essentially you didn't pay any back;
The JUDGEMENT is $14,526.21 in 2007.

Now let's see:
2007 - 1995 is 12 years!

$14,526 / $7498 is 1.937, or you pay back the original $7498, plus $7028 (93.7% interest on $7498) = $14526 !!!

$7028 accumulated interest on $7498 over 12 years is 5.7% interest per year for that 12 years.

5.7% is a rather low interest rate for a used car.