With the costs of vehicles steadily going up, many consumers are finding it difficult to borrow the money needed to purchase a much-needed car or truck. Many local banks, and even manufacturers’ financing arms, tend to reject potential borrowers that lack a credit history, have lower incomes, or suffered credit issues in the past. That’s why lenders like Consumer Portfolio Services are now providing a new option to help.
How Does the System Work?
The finance company works with automobile dealerships to provide indirect financing to enable disenfranchised borrowers to purchase clean, late-model used vehicles or, at times, new cars and trucks. Dealers find that having another financing option makes it possible to increase their sales numbers and, at the same time, provide a valuable service for area residents.
Advantages for Customers
Most consumers encounter financial problems at some point in their lives and, when difficulties arise, it can be problematic to recover. These loan opportunities allow consumers with little credit history or other financial issues to build or rebuild their credit scores. Yes, they might pay a slightly higher interest rate than those with solid credit histories, but having a functional vehicle is generally worth the minimally higher payments.
At the same time, the lender also provides a simple way to make payments. The online portal is simple to navigate and eliminates the need to visit a lender in person or mail a payment. The net effect is that purchasers have a better buying experience and enjoy a convenient way to make payments and enhance their credit ratings.
Is This Truly a Win-Win Situation?
The short answer is yes. Dealerships enjoy increased profits with little actual risk involved. That means those dealerships enjoy an increased cash flow that can be used to increase inventory levels or drive improved profits. Using this type of borrowing allows consumers to purchase the vehicles they need at competitive rates. Having quality transportation frequently makes it possible for borrowers to obtain better jobs, which means their incomes increase.
If a dealership is exploring new ways to boost sales, it pays to look at offering new financing options for customers. Vehicle buyers can also ask dealerships if they participate in this type of lending. Everyone comes out ahead when new automobile financing options are explored and used.