If you have lower credit and you go to a dealership to buy a car, any dealerships may try to get you a loan by a company like Consumer Portfolio Services. Consumer Portfolio Services works among dealerships not directly with consumers to provide auto loans to car buyers with past credit difficulties, minimal credit history, or low incomes. The company is a subprime auto lender, which means its focus is lending to people with rough credit. But be prepared: The cost of this kind of loan can be high.
Consumer Portfolio Services Auto Loans: What to know
Consumer Portfolio Services is an indirect auto loan lender. Very than working directly with prospective car customers, Consumer Portfolio Services partners with dealerships to extend loans to eligible applicants with bad credit. This may look greatest, but keep in mind that you can end up paying a steep price when borrowing from a subprime auto lender that targets people with credit issues.
While Consumer Portfolio Services works only through auto dealers, it does have a lending arm called New Roads that works directly with consumers.
Financing for shaky credit
It’s essential to be aware that lenders targeting people with not-so-great credit profiles usually charge higher interest rates and fees. This is because lenders typically consider someone with dinged-up credit to be a greater risk.
Also, when a car dealership finds a loan for you through a finance company like Consumer Portfolio Services, it’s the dealer and the finance company — not you — that’s arranging the loan. That means there’s room for the dealer to potentially add its markup to the mix, driving your costs up higher.
Consumer Portfolio Services offers participating dealerships several financing options depending on a customer’s credit profile and other factors.
For example, someone with a shakier or more limited credit history may have to meet more strict payment-to-income ratio requirements than someone whose credit profile has a mix of negative and some positive marks.
A closer look at Consumer Portfolio Services Auto Loans
One more thing to keep in mind is that when a dealership submits your info to Consumer Portfolio Services to apply for a loan, the company will pull your credit reports to determine eligibility. This is known as a hard credit query, which can negatively impact your credit scores.
Is a Consumer Portfolio Services Auto Loan right for you?
If you have bad credit and the dealership you’re shopping with has a relationship with Consumer Portfolio Services, you may be able to get an auto loan from the company.
But interest rates can be high, and your loan may cost you even more if the dealership adds its markup. Even if you have bad credit, a loan like this may not be your only choice, though.
You might want to consider trying to get prequalified with some online auto lenders so you can compare other options. While prequalification isn’t a guarantee for loan approval — you still have to apply formally — it can give you a pretty good idea of different choices you may have.
How to does apply for an auto loan from Consumer Portfolio Services.
Consumer Portfolio Services works directly with dealerships — that means you can’t apply now with the company. Keep in mind that if you go to Consumer Portfolio Services’ website and find your way to its Car Payment Calculator link near the bottom of the home page, a click will redirect you to a calculator on the New Roads website. You can use that car payment calculator to estimate terms for a New Roads loan — not for any CPS loan you might get through a dealer.
Not sure if Consumer Portfolio Services is right for you? Consider these alternatives.
If you have less-than-ideal credit, make sure you understand the hidden risks of subprime lending before applying for a car loan — either directly or through a dealership that works with a company like Consumer Portfolio Services. Here are some other options to consider.
- Tresl: If you’re looking to refinance your car and want to apply for prequalification before formally applying, Tresl might be a good option.
- MotoRefi: MotoRefi may be an option for borrowers with fair credit who wish to refinance their current auto loan.