Understand any stock in simple English
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Consumer Portfolio Services, Inc.
Consumer Portfolio Services buys auto loans made to people with damaged credit and collects the payments.
Consumer Portfolio Services is a specialty auto lender. It doesn't sell cars. It buys the loans that car dealers arrange for buyers whose credit is bruised — people with past bankruptcies, missed payments, or scores too low for a regular bank. The dealer finds the customer and the car; Consumer Portfolio Services provides the money that lets the sale happen, then collects it month by month.
The loans are "indirect" because the borrower never walks into a Consumer Portfolio Services office. They sit down at a dealership, pick a car, and sign financing paperwork; the dealer handles the sales pitch, and the loan gets sold to Consumer Portfolio Services afterward. The company earns interest on those loans, and it also packages them into securities sold to investors to fund the whole engine. The catch is risk. Subprime borrowers default at much higher rates than prime ones, and a used car can be repossessed and resold but for far less than the loan is worth. The company's real skill is pricing that risk, screening dealerships, and managing collections. Its competitors are other subprime auto lenders, such as Credit Acceptance and Ally Financial, and its results swing with used car prices and interest rates.
Headquartered in Las Vegas, Consumer Portfolio Services has been doing this since the late 1980s, surviving the 2008 financial crisis when funding for specialty lenders dried up. Today it makes most of its money from interest on its loan portfolio and from selling loans it originates. When used car values are strong and borrowers pay, the profits are solid; when they aren't, this is a tough, unforgiving business.
Saved answer · last researched 15 Nov 2026