The Story Behind Indirect Automotive Lenders Like Consumer Portfolio Services

The price of the average car has been rising steadily for quite a few years. Even used cars are now more expensive, on average, than they used to be, and that means obtaining financing is often a prerequisite for a purchase.

Companies like Consumer Portfolio Services help many Americans buy vehicles that they would not otherwise be able to acquire. A special arrangement allows such lenders to support many car purchases nationwide every year.

A More Flexible, Accommodating Way to Provide Automotive Financing

It used to be most common for would-be car buyers to arrange financing through banks and other conventional lenders. Someone in the market for a new car would then head to a local dealer with financing already set up.

That is still the preferred option for many, but there are also alternatives. One of the most popular of these is to patronize a car dealer who makes financing arrangements on site.

Compared to the traditional process, this approach tends to be more accessible to people with mixed or negative histories of credit usage. In fact, many car buyers who would be deemed entirely ineligible for financing by banks can qualify for loans to be approved by such dealers.

This type of financing has been made possible by a specialized type of lender who ultimately provides the required capital. Instead of lending directly to buyers as banks do, these companies buy loan contracts from dealers who issued and signed them.

Having car dealers work directly with shoppers who need financing allows for more flexibility than the conventional, bank-centered model. That means many people who might otherwise be forced to pay cash for vehicles can finance their purchases, instead.

Lending a Helping Hand

Some of the lenders who support this increasingly common and important type of activity have been around for quite a few years. In fact, some of them have regularly posted results that rank them among the most successful participants in the financial services industry.

That is a reflection of both healthy demand for this kind of financing and the viability of the underlying business model. As such, tomorrow’s car buyers are likely to have access to even more financing options when they visit local dealers.