Most dealerships sell vehicles with the help of financing purchases for customers. People seldom arrive to search for a car or truck with a suitcase of cash or the ability to write a check for the total amount due. Manufacture financing, local banks that work with dealers, and credit unions offer financing to those with excellent to above average credit ratings.
What About Customers with Credit Issues?
Many customers with past credit issues seek late model used vehicles that have lower sticker pricing. They are aware new car prices are out of financial reach and financing may be difficult. Dealers often have few options in order to get those drivers into reliable cars.
There are credit builder program offers in some dealerships, but those are not as widespread as the need for financing. This leaves dealers losing money and customers who could become loyal ones providing multiple referrals. A private lender, such as Consumer Portfolio Services, can be of service to both the dealer and the driver.
How It Works
The lender indirectly helps drivers by helping dealers offer financing for people with past credit problems, issues with current credit, and no credit histories at all. Dealers submit credit applications to the lender for approval. Once approved, the lender buys the contracts from the dealer and handles customer payments for the life of the loan. The dealer sells more cars and customers drive off the lot happy.
Late Model Vehicles
There are some contracts for new vehicle financing accepted, but most are regarding late model vehicles that serve as collateral. The risk is lower than financing new vehicles because total costs are lower, and depreciation has already begun. The value of the car or truck is more likely to cover the amount financed
Dealers interested in providing this opportunity to customers and selling more vehicles can begin by applying to the lender. Acceptance is typically based on the volume of business, number of late model cars and trucks available, and the location of dealership. Operations in five states for almost thirty years means approval rates are high for dealers. The advantage of working directly with a lender that accepts contracts other lenders will not is the appeal to a broader customer base.