Complaint Review: Credit Acceptance Corporation

Louis is talking about a different situation where they won't refund the amount due under the rule of 78 -- see below. Obviously this company is totally crooked and you need to be very careful dealing with them. The best way is to phone as little as possible and always follow up everything that was discussed with a letter.

Keara, you do owe at least the entire "Amount Financed" on the contract to the finance company as soon as you get the car. The contract does allow you to pay it over time. So you are not required to make a payment right now but you do owe money now. Your argument is like buying something with a credit card and saying you don't owe any money for it because you haven't gotten the bill yet.

The are 3 ways to not owe any money to CAC now:
*Pay them off according to contract
*Have the dealer agree to undo the deal and return the car (will never happen, unless you can get the AG to force them to do it)
*File bankruptcy (you don't want to do that)

So that leaves the payoff option. On a precomputed loan, there is no such thing as a "principal balance." There is only the "balance" which includes all the interest already computed in. But, should you pay off the balance early you should get credit for "unearned interest" according to the archaic "rule of 78." The amount to pay off the loan now is going to be a little more than the original "amount financed" minus your $4000 payment, but not the entire "balance" that you see now.

So as I suggested in your original post about this, get the "payoff quote" from CAC and take it to another bank to "refinance" your car. The new bank will send enough money to CAC to get the title to the car, and then you have a new loan with that bank.

I recently had the misfortune of getting approved credit through CAC. I was told that I could pay down the financed amount of the loan and would only have to pay interest on the remaining balace. My first payment wasn't even due for almost 2 weeks when i sent them a check for $4000. When I realized that they didn't apply it to my principal balance, but instead applied it to the entire loan amount over 30mos. worth of financing, I said,"My first payment isn't due yet so I owe you nothing as of now so please refund me my $4000 until I can get my contract disputes resolved." They followed by saying that "they don't issue refunds". I DIDN'T EVEN OWE THEM ANY MONEY YET!!!! HOW IS THAT LEGAL!!!????