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                                                                EXHIBIT 4(C)(16)

                                                                  EXECUTION COPY

                                                                 (COMERICA LOGO)

                                  May 31, 2005

Credit Acceptance Corporation
Suite 3000
25505 West Twelve Mile Road
Southfield, Michigan 48034

     Re: EXTENSION, WAIVER AND AMENDMENT under Third Amended and Restated
         Credit Acceptance Corporation Credit Agreement dated as of June
         9, 2004, as amended by First Amendment dated as of December 10, 2004
         ("Credit Agreement") by and among Credit Acceptance Corporation
         ("Company"), the Lenders which are parties thereto from time to time
         (each a "Bank" and collectively, the "Banks"), and Comerica Bank as
         Administrative Agent for the Banks (in such capacity, "Agent")

Ladies and Gentlemen:

     Reference is made to the Credit Agreement and to the Extension, Waiver and
Amendment dated April 30, 2005 issued by the Agent under the Credit Agreement
("April Waiver"). Except as defined to the contrary herein, capitalized terms
used in this Extension, Waiver and Amendment shall have the meanings given them
in the Credit Agreement, and if not defined therein, then as defined in the
April Waiver.

     As you have previously indicated, until certain accounting issues have been
resolved with the Company's auditors (such issues, referred to in the April
Waiver as the "Unresolved Accounting Issues"), the Company is unable to complete
its audited financial statements for the fiscal year ending December 31, 2004
and to deliver those financial statements to the Banks as required under Section
7.3(b) of the Credit Agreement or to file the Company's 10-K report with the
federal Securities and Exchange Commission as required under Section 7.3 (f) of
the Credit Agreement and under applicable law. Under the April Waiver, Agent and
the Banks, among other things, extended the applicable time periods for such
deliveries to May 31,2005 and waived the defaults under the Credit Agreement
resulting from the Company's failure to file its Form 10-K.

     In your request letter dated May 18, 2005 ("Request Letter"), you have
indicated that there has been no resolution of the Unresolved Accounting Issues
and, in fact, the matter may not be resolved for several months. Consequently,
you have requested a further extension of the

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Credit Acceptance Corporation
May 31, 2005
Page 2


required time period for delivery of the Company's audited financial statements
and filing of the Company's Form 10-K and an extension of the related waivers
and, in addition, an extension of the required time period for the filing of the
Company's Form 10-Q report required under Section 7.3(f) of the Credit Agreement
and under applicable law and for related waivers. Furthermore, recognizing the
Banks' difficulty in considering an extension of the Revolving Credit Maturity
Date in the absence of audited financial statements and a resolution of the
Unresolved Accounting Issues, you have asked that the Banks agree to amend the
payment schedule for the Additional Commitment Fee under Section 2.13(c).

     The Company represents and warrants to Agent and the Banks, as a continuing
representation and warranty until the Indebtedness under the Credit Agreement
has been repaid and discharged in full and no commitment to extend any credit
thereunder remains outstanding, that except as disclosed on Schedule 1 hereto
("Scheduled Waivers") it has obtained (directly or through a Subsidiary, as
applicable) all of the waivers, extensions and/or amendments ("Other Waivers")
in respect of (i) all agreements for borrowed money, (ii) all Permitted
Securitizations and (iii) all other contractual obligations, the occurrence of a
default under which could reasonably be expected to have a Material Adverse
Effect, in each case, to address the Unresolved Accounting Issues so as to
eliminate or continue to postpone the occurrence thereunder of any event of
default or other event or consequence which could reasonably be expected to have
a Material Adverse Effect as a result of such issues.

     Based on the approval of the requisite Banks (attached to this letter), the
Agent hereby confirms the following matters:

1.   The Banks extend (i) the time for delivery of the Company's audited
     financial statements under Section 7.3(b) of the Credit Agreement, the time
     for filing of the Company's Form 10-K under Section 7.3(f) of the Credit
     Agreement, in each case for its fiscal year ending December 31,2004, from
     May 31, 2005 (as currently required thereunder) to July 31, 2005 and (ii)
     the time for filing the Company's Form 10-Q under Section 7.3(f) of the
     Credit Agreement (for its first fiscal quarter ending March 31, 2005) from
     May 31, 2005 to July 31, 2005 (such required Form 10-K and 10-Q filings
     being referred to herein as the "Required SEC Filings").

2.   The Banks waive any Default or Event of Default due to the Company's
     failure to make its Required SEC Filings arising or that may arise under
     any provision of the Credit Agreement or any of the other Loan Documents
     requiring the Company to make its Required SEC Filings on a timely basis,
     such waiver to be given retroactive effect to March 31,2005 (in the case of
     its Form 10-K) and May 10, 2005 (in the case of its Form 10-Q), provided
     that the waivers under this paragraph shall expire (unless otherwise
     extended by the Majority Banks) on the earlier of July 31, 2005 or the date
     on which the Agent, at the direction or with the concurrence of the
     Majority Banks, terminates this Waiver by written notice to the Company
     ("Waiver Expiration Date") due to the

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Credit Acceptance Corporation
May 31, 2005
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     Company's failure to obtain a Scheduled Waiver or upon any of the Other
     Waivers ceasing to be effective, unless replaced with a comparable Other
     Waiver. The Company agrees to notify the Agent and Banks in writing
     promptly upon becoming aware that any of the Other Waivers has ceased to be
     effective and shall deliver to the Agent, promptly following receipt
     thereof, a copy of any Scheduled Waiver or any replacement of an Other
     Waiver. In the event this Extension, Waiver and Amendment ceases to be
     effective with respect to any of the defaults described above, (x) this
     Extension, Waiver and Amendment shall satisfy any requirement that written
     notice of such defaults be provided to the Company pursuant to the terms of
     the Credit Agreement or the other Loan Documents before any remedies may be
     exercised in respect thereof and (y) any grace periods applicable to such
     defaults pursuant to the terms of the Credit Agreement and other Loan
     Documents shall be deemed to have commenced on April 30, 2005 (with respect
     to the Company's Form 10-K) and on May 31, 2005 (with respect to the
     Company's Form 10-Q), regardless of this Extension, Waiver and Amendment.

3.   Until the Waiver Expiration Date, and notwithstanding Sections 7.2, 13.1 or
     any other provision of the Credit Agreement, (a) the Company shall not be
     required, to the extent of the Unresolved Accounting Issues, (i) to prepare
     its financial statements, projections and similar financial information on
     a basis consistent with GAAP or (ii) to make any representation or warranty
     thereunder (or under any Request for Advance or similar document or
     instrument delivered pursuant to the Credit Agreement) that such financial
     statements, projections or similar financial information has been prepared
     on a basis consistent with GAAP, and (b) any misrepresentation, Default or
     Event of Default resulting from the Company's failure prior to the date
     hereof, to the extent of the Unresolved Accounting Issues, to report on a
     basis consistent with GAAP is hereby waived. The Company agrees and
     acknowledges that it shall continue to be obligated (without limitation) to
     deliver the financial reports and other information required (without
     limitation) under Section 7.3(c) of the Credit Agreement, certified by the
     chief financial officer of the Company on the same basis as set forth in
     condition (a) hereof.

4.   The Banks agree with the Company that the last sentence of Section 2.13(c)
     of the Credit Agreement is amended and restated in its entirety, as
     follows:

          "One-quarter of the Additional Commitment Fee, if applicable, shall be
          due and payable on the first day of each calendar quarter if, on such
          date, the remaining maturity of the Revolving Credit shall be less
          than 366 days, but shall not otherwise be due and payable."

     This Extension, Waiver and Amendment shall become effective, according to
the terms and as of the date hereof (except where given retroactive effect
hereunder), upon satisfaction by the Company of the following conditions:

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Credit Acceptance Corporation
May 31, 2005
Page 4


     (a)  The Company shall have delivered to the Banks, prior to the proposed
          effective date of this Extension, Waiver and Amendment, a draft of its
          Form 10-Q (as it would have been filed with the Securities and
          Exchange Commission) containing a Consolidated and Consolidating
          balance sheet, income statement and statement of cash flows of Company
          and its Subsidiaries for its first quarter ending March 31, 2005,
          certified by the chief financial officer of the Company as to
          consistency with prior financial reports and accounting periods
          (including the method of handling the Unresolved Accounting Issues,
          but excluding the restated tax items discussed in the Company's March
          10, 2005 press release), accuracy and fairness of presentation, and
          accompanied by a Covenant Compliance Report and a Borrowing Base
          Certificate;

     (b)  Agent shall have received (i) counterpart originals of this Extension,
          Waiver and Amendment, in each case duly executed and delivered by the
          Company and its Subsidiaries, as applicable, and the Majority Banks,
          in form satisfactory to Agent and (ii) duly executed copies of the
          Other Waivers, other than the Scheduled Waivers, if any; and

     (c)  Agent shall have received from a responsible senior officer of the
          Company a certification (i) that all necessary actions have been taken
          by the Company to authorize execution and delivery of this Extension,
          Waiver and Amendment, and that no consents or other authorizations of
          any third parties are required in connection therewith; and (ii) that,
          after giving effect to this Extension, Waiver and Amendment, no
          Default or Event of Default has occurred and is continuing on the
          proposed effective date of this Extension, Waiver and Amendment.

     The Company ratifies and confirms, as of the date hereof after giving
effect to the waivers and amendments contained herein, each of the
representations and warranties set forth in Sections 6.1 through 6.18,
inclusive, of the Credit Agreement and acknowledges that such representations
and warranties are and shall remain continuing representations and warranties
until the Indebtedness under the Credit Agreement has been repaid and discharged
in full and no commitment to extend any credit thereunder remains outstanding.

     This Extension, Waiver and Amendment shall be governed by Michigan law and
is limited to the specific matters described above and shall not be deemed to be
a waiver of or consent to any other matter, including without limitation any
failure to comply with any provision of the Credit Agreement or any other Loan
Document or to comply with any financial covenant or any other reporting period,
or to amend or alter in any respect the terms and conditions of the Credit
Agreement (including without limitation all conditions for Advances) or to
constitute a waiver or release by the Banks or the Agent of any right, remedy,
Default or Event of Default under the Credit Agreement or any other Loan
Documents, except as specifically set forth above. Furthermore, this Extension,
Waiver and Amendment shall not affect in any manner

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Credit Acceptance Corporation
May 31, 2005
Page 5


whatsoever any rights or remedies of the Banks with respect to any other
non-compliance by the Company or any Guarantor with the Credit Agreement or the
other Loan Documents, whether in the nature of a Default or an Event of Default,
and whether now in existence or subsequently arising.

     By signing and returning a counterpart of this letter to the Agent, the
Company acknowledges its acceptance of the terms of this letter.

                                        Very truly yours,

                                        COMERICA BANK, as Agent and as
                                        Collateral Agent


                                        By:
                                            ------------------------------------
                                        Its:
                                             -----------------------------------

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Credit Acceptance Corporation
May 31, 2005
Page 6


Acknowledged and Agreed
on the 31st day of May, 2005

CREDIT ACCEPTANCE CORPORATION


By: /s/ Douglas W. Busk
    ---------------------------------
Its: Treasurer

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                      REAFFIRMATION OF OTHER LOAN DOCUMENTS

     Each of the undersigned hereby acknowledges that it is a party to the
Domestic Guaranty, certain of the Collateral Documents and/or certain of the
other Loan Documents, as the case may be, (collectively, the "Other Loan
Documents") and that it has received and reviewed a copy of the foregoing
Extension, Waiver and Amendment ("May 2005 Waiver") to which this Reaffirmation
is attached. Each of the undersigned parties hereby ratifies and confirms such
party's obligations under the Other Loan Documents to which it is a party, and
agrees that such Other Loan Documents remain in full force and effect according
to their respective terms after giving effect to the May 2005 Waiver, subject to
no setoff, defense or counterclaim. Each of the undersigned parties confirms
that this Reaffirmation is not required by the terms of the Other Loan Documents
to which it is a party and need not be obtained in connection with this or any
prior or future amendments, waivers or extensions of or under the Credit
Agreement. Capitalized terms not otherwise defined herein will have the meanings
given them in the Credit Agreement.

     Dated as of May 31, 2005.

                                        AUTO FUNDING AMERICA OF NEVADA, INC.
                                        BUYERS VEHICLE PROTECTION PLAN, INC.
                                        CAC LEASING, INC.
                                        CREDIT ACCEPTANCE CORPORATION OF
                                             NEVADA, INC.
                                        CREDIT ACCEPTANCE CORPORATION OF
                                             SOUTH DAKOTA, INC.
                                        VEHICLE REMARKETING SERVICES, INC.
                                        CAC (TCI), LTD.
                                        CAC REINSURANCE, LTD.


                                        By: /s/ Douglas W. Busk
                                            ------------------------------------
                                        Its: Treasurer

               [REAFFIRMATION TO EXTENSION, WAIVER AND AMENDMENT]

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                       EXTENSION, WAIVER AND AUTHORIZATION

     The undersigned Bank, by signing below, approves the matters described in
paragraphs 1 through 4 of this letter, and authorizes the Agent to execute and
deliver the foregoing Extension Waiver and Amendment, in the form to which this
Authorization is attached.

                                        ----------------------------------------
                                                         [Bank]


                                        By:
                                            ------------------------------------
                                        Its:
                                             -----------------------------------
                                        Date: May 31, 2005

            [BANK SIGNATURE PAGE TO EXTENSION, WAIVER AND AMENDMENT]

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Credit Acceptance Corporation
May 31, 2005
Page 9


                  SCHEDULE 1 TO EXTENSION, WAIVER AND AMENDMENT
                               DATED MAY 31, 2005

                                      NONE