Exhibit 4.1
                                                                     -----------

                          UNION ACCEPTANCE CORPORATION

                              SENIOR NOTES DUE 2002
                             NOTE PURCHASE AGREEMENT
                              AMENDMENT AND CONSENT


                                                                   April 2, 1996

     Reference  is made to the Note  Purchase  Agreement,  dated as of August 7,
1995,  as  amended by the  Amendment  thereto  dated  November  22,  1995 (as so
amended, the "Note Purchase Agreement"), among Union Acceptance Corporation (the
"Company") and Anchor National Life Insurance Company,  The Travelers  Insurance
Company,  The Lincoln National Life Insurance Company, The Minnesota Mutual Life
Insurance  Company,  Cova  Financial  Services Life  Insurance Co., The Lutheran
Church - Missouri Synod Foundation,  The Ohio Casualty Insurance Company, Safeco
Life Insurance  Company,  The Travelers  Insurance Group,  Inc., First Cova Life
Insurance Co., Guarantee Mutual Life Company,  John Alden Life Insurance Company
of New York,  Physicians Mutual Insurance Company,  Trustmark Insurance Company,
Cincinnati  Life Insurance  Co.,  Acacia  National Life Insurance Co.,  Republic
Western Insurance Company, Standard Insurance Company,  Trustmark Life Insurance
Company,  Physicians  Life Insurance  Company - Annuity Pocket 2, Cova Financial
Life  Insurance Co., Fort Dearborn Life Insurance  Company,  Frontier  Insurance
Company,  Guarantee  Trust Life  Insurance  Company,  Security-Connecticut  Life
Insurance  Company,  CSA  Fraternal  Life and General  American  Life  Insurance
Company (each such entity, a "Purchaser" and  collectively,  the  "Purchasers").
Capitalized  terms used but not otherwise defined herein shall have the meanings
set forth in the Note Purchase Agreement.

     1.  Pursuant to Section  14C of the Note  Purchase  Agreement,  the parties
hereto hereby agree to amend the Note Purchase Agreement as follows:

     (a) Section 8D of the Note Purchase Agreement is hereby amended by deleting
clause (i) thereof and inserting in lieu thereof:

          "(i) The Company may not make any  payments on  Subordinated
     Debt except as permitted by the  subordination  provisions of the
     Subordination Debt Document governing such Subordinated Debt."

     (b)  Section  12A of the Note  Purchase  Agreement  is  hereby  amended  by
deleting the definition of "Subordinated Debt" and inserting in lieu thereof:

          "'Subordinated  Debt'  means Debt of the  Company  (i) whose
     first scheduled  principal payment date is at least 92 days after
     the maturity  date of the Senior Notes (as such maturity may have
     been  extended at the time of  issuance  of such Debt),  and (ii)
     which  either (a) is issued  pursuant  to the  Subordinated  Note
     Purchase Agreement, or (b) is (x) subordinated or junior in right
     of payment to the Senior Notes on terms and provisions  which are
     no more  favorable  to the  holders  thereof  than the  terms and
     provisions  of  Section  6.1 of the  Subordinated  Note  Purchase
     Agreement  (as in effect on the date of initial  issuance  of the
     Senior  Subordinated Notes described therein and substantially in
     the form  attached to the Amendment and Consent as Exhibit A) are
     to  the  holders  of  the  Senior  Subordinated  Notes  described
     therein, and (y) otherwise evidenced by documentation in form and
     substance satisfactory to the Required Holders."

          (c) Section  12A of the Note  Purchase  Agreement  is hereby
     amended  by  adding  the  following  definitions  in  appropriate
     alphabetical order:

          "'Amendment  and Consent' means the Amendment and Consent to
     this Agreement,  dated as of April 2, 1996, among the Company and
     the Required Holders.

          'Subordinated  Debt  Documents'  means (i) the  Subordinated
     Note  Purchase  Agreement,  as in effect  on the date of  initial
     issuance of the Senior Subordinated Notes described therein,  and
     (ii)  any   other   indenture,   note  or   agreement   governing
     Subordinated Debt which satisfies the requirements of clause (ii)
     of the definition of Subordinated Debt.

          'Subordinated  Note Purchase  Agreement'  means that certain
     Note  Purchase  Agreement,  dated as of April 3, 1996,  among the
     Company and the note purchasers named therein with respect to the
     Senior  Subordinated  Notes due 2003,  as amended,  modified  and
     supplemented in accordance with the terms thereof.'"

     2. Except as hereby  amended,  the Note Purchase  Agreement shall remain in
full force and effect and is hereby ratified and confirmed in all respects,  and
all  references  to the  "Agreement"  therein  shall be  deemed to mean the Note
Purchase Agreement as amended hereby.

     3. The  Purchasers  hereby (i) consent to the execution and delivery by the
Company of the Subordinated Note Purchase  Agreement and the consummation by the
Company of the transactions  contemplated thereby, and (ii) deem the Senior Note
Purchase Agreement  substantially in the form attached hereto as Exhibit A to be
satisfactory in form and substance.

     4. The Company  hereby  confirms  that as of the date hereof (i) all of the
representations and warranties of the Company provided in Section 10 of the Note
Purchase  Agreement  are true and  correct,  (ii) all  covenants  under the Note
Purchase Agreement have been fully performed and (iii) all information  provided
to the  Purchasers in connection  with this Agreement is true and correct in all
material respects.

     5. Upon execution and delivery of this  Agreement by the Required  Holders,
the Company shall pay to the Holders an aggregate of $110,000.

     6. This  Agreement  shall be effective only upon the execution and delivery
hereof by the Company and the Required Holders.

     7. This  Agreement  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 agreement.

     8. This Agreement shall be governed by and construed in accordance with the
laws  of the  State  of New  York,  without  regard  to the  conflicts  of  laws
principles thereof.



<PAGE>



     IN WITNESS WHEREOF, each of the undersigned has executed and delivered this
Agreement as of the date first above written.

                                    UNION ACCEPTANCE CORPORATION


                                    By:  /s/ Cynthia F. Whitaker
                                         ---------------------------------------
                                           Name: Cynthia F. Whitaker
                                           Title:


                                    REQUIRED HOLDERS:

                                    ANCHOR NATIONAL LIFE INSURANCE
                                         COMPANY


                                    By:  /s/ Yvonne Stevens
                                         ---------------------------------------
                                           Name: Yvonne Stevens
                                           Title: Authorized Agent


                                    THE TRAVELERS INSURANCE COMPANY


                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:


                                    THE LINCOLN NATIONAL LIFE
                                         INSURANCE COMPANY

                                    By:  Lincoln Investment Mangement, Inc.,
                                         its Attorney-In-Fact

                                         By:  /s/ Gregory E. Reed
                                              ----------------------------------
                                                Name: Gregory E. Reed
                                                Title: Vice President
<PAGE>





                                    THE MINNESOTA MUTUAL LIFE
                                         INSURANCE COMPANY

                                    By:  MIMLIC Asset Management Company


                                         By:  /s/ Marilyn Froelich
                                              ----------------------------------
                                                Name: Marilyn Froelich
                                                Title: Vice President



                                    COVA FINANCIAL SERVICES LIFE
                                         INSURANCE CO.


                                    By:  /s/ Doug Koester
                                         ---------------------------------------
                                           Name: Doug Koester
                                           Title: Vice President



                                    THE LUTHERAN CHURCH-MISSOURI
                                         SYNOD FOUNDATION


                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:



                                    THE OHIO CASUALTY INSURANCE
                                         COMPANY


                                    By:  /s/ Richard B. Kelly
                                         ---------------------------------------
                                           Name: Richard B. Kelly
                                           Title: Senior Investment Officer

<PAGE>




                                    SAFECO LIFE INSURANCE CO.


                                    By:  /s/ Michael C. Knebel
                                         ---------------------------------------
                                           Name: Michael C. Knebel
                                           Title: Vice President and Treasurer


                                    THE TRAVELERS INSURANCE GROUP
                                         INC.


                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:




                                    FIRST COVA LIFE INSURANCE CO.


                                    By:  /s/ Doug Koester
                                         ---------------------------------------
                                           Name: Doug Koester
                                           Title: Vice President



                                    GUARANTEE MUTUAL LIFE COMPANY



                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:


                                    JOHN ALDEN LIFE INSURANCE
                                         COMPANY OF NEW YORK



                                    By:  /s/ [NOT LEGIBLE]
                                         ---------------------------------------
                                           Name:
                                           Title: Vice President, Investments


<PAGE>



                                    PHYSICIANS MUTUAL INSURANCE
                                         COMPANY


                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title: Senior Portfolio Manager



                                    TRUSTMARK INSURANCE COMPANY


                                    By:  /s/ Michael A. Scelsi
                                         ---------------------------------------
                                           Name:Michael A. Scelsi
                                           Title: Vice President, Investments



                                    CINCINNATI LIFE INSURANCE CO.


                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:


                                    ACACIA NATIONAL LIFE INSURANCE
                                         CO.


                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:


                                    REPUBLIC WESTERN INSURANCE
                                         COMPANY


                                    By:  /s/ Bradley P. Newman
                                         ---------------------------------------
                                         Name: Bradley P. Newman
                                         Title: Vice President/Treasurer

<PAGE>



                                    STANDARD INSURANCE COMPANY


                                    By:  /s/ [NOT LEGIBLE]
                                         ---------------------------------------
                                           Name:
                                           Title:


                                    TRUSTMARK LIFE INSURANCE
                                         COMPANY


                                    By:  /s/ Michael A. Scelsi
                                         ---------------------------------------
                                           Name: Michael A. Scelsi
                                           Title: Vice President, Investments


                                    PHYSICIANS LIFE INSURANCE
                                         COMPANY ANNUITY POCKET 2


                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title: Senior Portfolio Manager


                                    COVA FINANCIAL LIFE INSURANCE CO.


                                    By:  /s/ Doug Koester
                                         ---------------------------------------
                                           Name:Doug Koester
                                           Title: Vice President


                                    FORT DEARBORN LIFE INSURANCE
                                         COMPANY


                                    By:  MIMLIC Asset Management Company

                                         By:  /s/ Loren A. Haugland
                                              ----------------------------------
                                                Name: Loren Haugland
                                                Title: Vice President


<PAGE>


                                    FRONTIER INSURANCE COMPANY


                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title:Senior Portfolio Manager


                                    GUARANTEE TRUST LIFE INSURANCE
                                         COMPANY


                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title: Senior Portfolio Manager


                                    SECURITY - CONNECTICUT LIFE
                                         INSURANCE COMPANY

                                    By:  Lincoln Investment Management,
                                         Inc., its Attorney-In-Fact

                                         By:  /s/ Gregory E. Reed
                                              ----------------------------------
                                                Name: Gregory E. Reed
                                                Title: Vice President


                                    CSA FRATERNAL LIFE


                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title: Senior Portfolio Manager


                                    GENERAL AMERICAN LIFE INSURANCE
                                         COMPANY


                                    By:  /s/ Doug Koester
                                         ---------------------------------------
                                           Name: Doug Koester
                                           Title: Vice President