Many Americans have discovered how dealer originated financing can open up new options when it comes time to buy a car or truck. Especially for those whose credit records might not qualify them for loans from banks and other traditional sources of financing, dealers who are equipped to help can make a real difference.
Companies like Consumer Portfolio Services enable this increasingly popular type of lending by buying loans from dealers that meet their standards. In addition to producing real benefits for consumers in the process, they also support the dealers who partner with them in important ways.
More Than a Mere Source of Financing
While serving as the lender who allows dealers to issue loans to vehicle buyers is very much the cornerstone of what companies like this do, they also often provide other services of value. In particular, a lender like this will sometimes support its dealer partners through some mixture of:
- Lead provision. Vehicle dealers must typically fight fiercely for customers, with some regarding the industry as one of the most competitive of all. Large lenders who partner with individual dealers will often have far more in the way of resources, reach, and experience. In some cases, lenders will help their dealer partners succeed by allowing them to participate in lead generation programs and the like.
- Loan consulting. The usual arrangement for partnerships like these sees dealers first extending credit on their own to buyers and then selling those loans on to third-party lenders. That means needing to be sure of abiding by standards that lenders will be prone to respect when it comes time to sell a given loan onward. Lenders can help dealers achieve better results by teaching them how to assess particular buyers for creditworthiness.
- Inventory management. In some cases, a dealer will have difficult maintaining an inventory of vehicles that aligns well with demand in the area. Once again, lenders will sometimes be able to help by providing useful advice and support.
A Commitment to Success for All Involved
By providing support of these kinds and others, lenders of this type help dealers achieve improved results. In the process, lenders benefit by gaining access to more loans that will end up being profitable for them to own and service.