Many potential automobile buyers will not qualify for traditional dealership financing or an automobile bank loan. They may have past credit problems, a low income, or have no credit history at all, yet still need safe and reliable transportation. Dealerships can offer more financing options through indirect financing companies, such as Consumer Portfolio Services.

How That Works

Customers get financing through the dealership by participating in special programs. Some are advertised as “second chance” or “fresh start” programs. The interest rate is higher, but customers have the transportation they need. These types of programs are typically restricted to late-model used vehicles, but can sometimes be extended to a new vehicle purchase.

The dealership can provide those options via retail installment sales contracts secured with the late-model used cars. Fund contract purchases on a long-term basis allows financing to get approved. The financing company makes the final approval to the dealer, who passes that onto the customer. If the customer is late with payments, or defaults on the terms, the company takes action to collect that debt.


Financing contracts also benefit dealerships, and customers indirectly, by including aggressive marketing. The fact the financing is offered to low-income customers and those with credit issues is emphasized on print and media advertisements for the dealership. A strong internet presence via the dealership website, automotive review sites, and social media attracts the attention of buyers, who are then lead to the dealership.

More people visit the dealership, ask about the financing programs (of which there are eight), and leave with vehicles. An increase in sales, improved lead generation, and satisfied customers combine to allow the dealership to thrive.

Applying for Services

Both franchised and non-franchised dealerships can benefit from installment sales contracts if they meet qualifications. Franchised dealerships are covered by contracts between the financing company and the parent company. Non-franchised dealership owners will need to submit specific documents and meet inventory and size criteria to apply.

Documents Needed

A current financial statement, along with three months of bank statements, are required. A copy of the Department of Motor Vehicles license for the business is also necessary. The credit histories of each owner must be included, as do photographs of the dealership. The information will be reviewed and a representative will be in contact.