EXHIBIT 4.1


                                                                    June 7, 2002




Union Acceptance Corporation
250 North Shadeland Avenue
Indianapolis, Indiana  46219
Attention:  Mr. Rick A. Brown

     Re:  Amendment to Note Purchase Agreement

Ladies and Gentlemen:

     Reference is hereby made to the Note Purchase  Agreement  dated as of March
24, 1997 among Union  Acceptance  Corporation (the "Company") and the Purchasers
identified therein (the "Note Purchase Agreement").  All terms used herein which
are defined in the Note  Purchase  Agreement and not  otherwise  defined  herein
shall have the meaning ascribed to them in the Note Purchase Agreement.

     The Company has requested that certain terms of the Note Purchase Agreement
be  amended.  This letter  amendment  responds to that  request.  The  amendment
contained in this letter amendment and the  effectiveness  thereof is subject to
the execution and delivery of this letter  amendment by the Required Holders and
the Company.

     Subject to the  conditions  set forth above,  the Required  Holders and the
Company  hereby  agree that the Note  Purchase  Agreement  is hereby  amended as
follows:

     1. The definition of the term "Securitization" contained in Section 12.1 of
the Note Purchase Agreement is hereby amended and restated as follows:

          "Securitization"  means a public or private  transfer of auto loan and
     other consumer loans and related consumer  contracts in the ordinary course
     of business  which  transfer  is  recorded  as a sale or secured  financing
     according to GAAP as of the date of such transfer, and by which the Company
     or one of its  Subsidiaries  directly or  indirectly  securitizes a pool of
     specified consumer auto loans or other consumer loans and related contracts
     including  but not limited to any such  transactions  involving the sale of
     specified  Auto  Receivables or consumer  receivables  to a  securitization
     entity  established  for such  purpose in  connection  with the issuance of
     asset-backed  securities and including  without  limitation the outstanding
     UFSB and UACSC Grantor Trust or Auto Trust securitizations  entered into by
     the Company's  predecessor  or its  Subsidiaries  prior to the date of this
     Agreement.

     Except as hereby amended or otherwise modified, the Note Purchase Agreement
shall remain in full force and effect and is hereby  ratified  and  confirmed in
all respects;  each of the other Credit Documents shall remain in full force and
effect after the amendment of the Note Purchase  Agreement  contemplated  hereby
and each such other  Credit  Document is hereby  ratified  and  confirmed in all
respects.  This letter  amendment may be executed in any number of  counterparts
and by different  parties on separate  counterparts,  and each such  counterpart
shall be deemed to be an  original,  but all such  counterparts  shall  together
constitute one and the same letter  amendment.  This letter amendment shall be a
contract made and governed under the internal laws of the State of New York.

     The terms and provisions of the above letter amendment to the Note Purchase
Agreement are hereby agreed and  consented to. As additional  consideration  for
the  amendments  contained in the above  letter  agreement,  the Company  hereby
confirms that all information provided to the Purchasers in connection with this
amendment is true and correct in all material respects as of the date hereof and
as of the effective date of this amendment.

                           UNION ACCEPTANCE CORPORATION

                           By: /s/ Rick A. Brown
                              -------------------------------------
                              Rick A. Brown, Executive Vice President, and
                                      Chief Financial Officer
Date:    7/1/02

<PAGE>

                           THE NOTE PURCHASERS:

                           PRINCIPAL LIFE INSURANCE COMPANY

                           By: Principal Capital Management, LLC,
                               a Delaware limited liability company,
                               its authorized signatory

                           By: /s/ Douglas A. Drees
                               -------------------------------------
                               Name:    Douglas A. Drees
                               Title:   Counsel

                           By: /s/ Joellen J. Watts
                               -------------------------------------
                               Name:    Joellen J. Watts
                               Title:   Counsel

                      Current principal balance as of June 7, 2002:  $15,000,000


                           STATE STREET BANK & TRUST CO

                           By: /s/ Scott Hockman
                               -------------------------------------
                               Name:    Scott Hockman
                               Title:   Assistant Vice President

                       Current principal balance as of June 7, 2002:  $5,000,000


                           EMSEG & CO

                           By: /s/ Sandrea Bland
                               -------------------------------------
                               Name:    Sandrea Bland
                               Title:   OPS Manager

                       Current principal balance as of June 7, 2002:  $4,000,000
                                                             No. 54 @ 2MM
                                                             No. 34 @ 2MM



                           NEW YORK LIFE INSURANCE COMPANY


                           By: /s/ Anthony Malloy
                               -------------------------------------
                               Name:    Anthony Malloy
                               Title:   Investment Vice President

                       Current principal balance as of June 7, 2002:  $8,333,333



                           NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

                           By: New York Life Investment
                               Management, LLC, its Investment
                               Manager

                           By: /s/ Anthony Malloy
                               --------------------------------------
                               Name:    Anthony Malloy
                               Title:   Director



                      Current principal balance as of June 7, 2002:  $10,333,333