Reliable transportation is essential for people to get back and forth to work or school. In cities with excellent public transportation, the necessity may not be as great, but many rural areas and small towns have no such amenities. Dealerships provide manufacturer incentives and rebates to sell new vehicles to people with approved credit. What about those with no credit history, a low credit score, or a high debt-to-income ratio?
Providing financing for first-time buyers, programs to help people rebuild better credit ratings, and financing for people balancing that fine line of income and expenses is a sure way to attract new customers. Franchised dealers do not have the resources to operate such programs on their own. The risk of having customers default on the loan can make or break a small dealership. So, how do dealers offer these types of programs?
Indirect financing companies, such as Consumer Portfolio Services (CPS), work with dealerships to buy contracts on loans the company approves that are secured with late model vehicles. This allows the dealer to sell late-model, used, and sometimes new vehicles to those who would not otherwise qualify for financing. Customers have the transportation they require, and dealerships sell more cars. It is a win-win situation.
Dealership Benefits from Working with CPS
In addition to attracting more customers, the dealership builds a reputation for investing in the community. CPS, in business since 1991, has grown to a company with branches in five states and the resources to help dealerships develop relationships with customers and get hard-working people into vehicles that will suit their needs. Ongoing support for dealership loan approval via contracts can help a dealership survive lean times when people are not buying new vehicles.
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