The world of automotive financing has changed a great deal in recent years, and that has benefited all involved parties. There are a number of ways by which indirect automotive lenders like Consumer Portfolio Services make life and business easier for others. This increasingly popular style of specialty financing is one that makes sense from a few distinct perspectives, as a quick look at the details will reveal.
A Productive, Appealing Way to Finance Many Car Purchases
Instead of arranging for loans from banks or credit unions, many car shoppers today head directly to dealers that offer financing themselves. These typically independent dealerships are able to do so because of relationships they have with lenders who work behind the scenes.
Under the usual conditions, a lender will vet a car shopper’s qualifications much as a conventional lender might, but will typically hold the buyer to more generous, less strict standards. After the purchase has been finalized with the provided financing, the loan will then be handed over to the lender the dealer works with.
An Arrangement That Benefits Several Different Parties
This type of financing often proves to be one that works well for all involved. The various parties that can benefit from arrangements like this include:
- Buyers. Many people who need access to reliable transportation have credit records that would rule out traditional types of financing. Dealers are often able to work with such shoppers even when their credit scores are well below the level normally judged “prime.” As a result, choosing to patronize a dealership that offers this type of financing can provide a family with a car or truck that would otherwise not be accessible.
- Dealers. Most local automotive markets are highly competitive, and many dealers have to grapple with relatively thin margins. Working with the right type of lender can allow a dealer to sell more vehicles even when times are tough for others.
- Investors. Those who commit capital to indirect automotive lenders behind the scenes get to take advantage of a lucrative development. That has been excellent news in recent years for investors who were dissatisfied with the opportunities found elsewhere.
By having so much to offer across the board, this type of financing has recently become a mainstay of the industry. That is unlikely to change in the future, with many more such loans now being sought and issued every day.