Lenders Like Consumer Portfolio Services Play an Increasingly Important Role in the Auto Industry
The financial services industry can sometimes seem like a slow-moving place, but such perceptions are most often mistaken. In many cases, impressive and momentous developments are happening in the field even when outsiders are not necessarily aware of them.
The steadily increasing significance of specialty lenders like Consumer Portfolio Services, for instance, has only recently become clear even to many relatively informed observers. In fact, lenders like this that focus on indirect automotive financing are making an impact in several respects that will soon become almost impossible to overlook.
A Formerly Unconventional Type of Automotive Financing Increasingly Becomes Part of the Norm
Not so many years ago, car buyers used to rely on banks and financing companies set up by manufacturers when it came time to make their purchases. Although there were other alternatives, these were mostly relegated to the sidelines because consumers tended to find the more prominent options satisfactory.
The financial meltdown that began at the end of 2007 shook things up in ways that are still being felt. One of the most notable side effects of the ensuing recession for many consumers was drastically reduced access to automotive financing that had formerly been easy to come by.
Fortunately, another type of lender that had previously played a relatively minor role stepped up to fill in that gap. Working with individual and normally independent dealers who formed partnerships with them, these lenders allowed millions of car buyers to obtain the financing they needed.
Since then, loans of this general kind have become more and more common. Instead of heading to banks that frequently stick lending standards far higher than used to be the norm, consumers obtain loans from dealers. On the other side of the equation, these dealers then sell the contracts they sign to lenders who have agreed to support them.
Improved Access to Automotive Financing Benefits Many
With financing arrangements like this now being far more common than in the past, car buyers are increasingly aware they have more viable options to choose from. That benefits many, whether those who might otherwise be denied financing or others who simply find such indirect loans preferable to the alternatives.