$5000 Fee to use Credit Acceptance Corp???

by Christine S.
(Show Low, AZ)




Question: A local dealership told me that Credit Acceptance Corp. charges them $5000.00 to accept my credit application. Is there truth to this and is it legal?




Answer: Hi Christine. Credit Acceptance Corp does have a unique way of structuring their loans and there is to some degree an acquisition fee that the dealer will have to pay in order to get a deal funded.

For them to say $5000 is probably inaccurate as the fee they charge is not specifically stated on their call backs. It's very confusing to explain especially if one were not familiar with subprime finance. It's even confusing to explain to many people that are familiar with subprime financing.

So, just know that yes there is a fee (I've seen it range from $1000 to $3500) and it varies from vehicle to vehicle and customer to customer. The dealer only has to pay this if they actually contract the deal and it's not just for submitting an application.

Lastly, yes it is legal for lenders to charge an acquisition fee and it is quite common for subprime auto loans. That's why it is some times difficult to get a big discount when buying a car with bad credit.

Hope this helps,
Justin


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