Credit Acceptance Corporation is an auto finance company founded in 1972 by Dan Foss who was the largest independent used car dealer in the world during the 1970s and 80s. The company was created to offer auto loans to consumers regardless of credit history. These loans are often referred to as credit acceptance auto loans. The companies philosophy is that if given the chance, people will take advantage of an opportunity to rebuild their credit by making timely payments. Once their credit is re-established these people will then have the ability to return to conventional financing options.
Credit Acceptance Corp offers these loans through a nationwide network of auto dealer-partners who then have the ability to offer thirty second approvals to their customers through Credit Acceptance Corps technology.
Who Needs Credit Acceptance Loans
People with poor credit who do not quality for conventional loans and don’t have the cash to buy a car outright will need a credit acceptance auto loan to obtain financing. All customers submitted by the dealer-partners are accepted however, it is at the dealer-partners discretion whether to issue an automobile or not.
What Are the Drawbacks/Benefits
The benefits are straightforward. Everyone qualifies regardless of credit history and these people will then have the opportunity to rebuild their credit. This allows people who would have no other means to do so, to own an automobile and make it work, the hospital, or other essential locations.
The drawbacks are very real but can be a bit murky. These loans are issued at much higher interest rates than conventional loans which increases the financial strain on an already struggling individual and increases the chance of default on the loan. Many people debate that these types of loans and the auto dealerships issuing them are taking advantage of the poor to line their own pockets. The dealers are quick to point out that they are taking on a very high risk loan and the interest rates must be higher to justify the risks. They also note that they are the only ones even willing to take on the risk and give people an opportunity to own a car and rebuild their credit.
Credit Acceptance Corporations Reputation
The reputations of loan companies can be difficult to accurately determine because of the sensitive nature of personal financial situations and a generally lack of financial understanding by the public. Therefore, even the most reputable company will receive occasional irate customers and complaints. The best place to begin research on the reputation of any company is the Better Business Bureau. Credit Acceptance Corps headquarters are located in Michigan and you can find their BBB reports by searching the Detroit Better Business Bureau website or by following this link directly to their review page. At the time of this posting there was no report because their information was being updated or was under review. However, CAC also has a location in Nevada and that locations report can be found here. At the time of this post Credit Acceptance Corporations rating was a C. Not good, but not the end of the world.
Various online reviews and complaints can also be found. An initial search showed a split between people supporting the company and people who had complaints. It’s wise to take these reviews with a grain of salt because anybody could be posting them. Including company employees writing fake positive reviews or competitors and disgruntled former employees writing fake negative reviews.
Our Take
Always do your own due diligence but our personal take is that Credit Acceptance Corp is reputable as long as you understand the type of loan you are getting into. Make sure the dealer goes over the terms and conditions of the loan in detail, get copies in writing of everything they tell you, and take along a financially savvy friend who might be able to spot red flags or think of the proper questions to ask.