Consumer Portfolio Services, Inc. (CPS) is a specialty finance company that provides indirect automobile financing to individuals with past credit problems, low incomes, or limited credit histories. Founded in 1991 and headquartered in Irvine, California, CPS purchases retail installment sales contracts primarily from franchised automobile dealerships, secured by late-model used vehicles and, to a lesser extent, new vehicles. The company funds these contract purchases primarily through the securitization markets and services the contracts over their lives. As of March 31, 2025, CPS has purchased over $23.5 billion in contracts and services a managed portfolio of approximately $3.8 billion, with about 216,000 active customers and 943 employees across five states. CPS maintains dealer relationships in 48 states across the United States. Its common stock is traded on the NASDAQ National Market System under the ticker "CPSS."
CPS focuses on providing financing solutions to subprime customers—individuals with limited credit histories or past credit problems—by purchasing retail installment sales contracts from automobile dealers. The company's strategic objectives include expanding its dealer network, enhancing underwriting processes, and optimizing servicing operations to manage credit risk effectively. CPS primarily targets the subprime auto finance market, aiming to facilitate vehicle ownership for consumers who might not qualify for traditional financing.
As of December 31, 2024, CPS reported annual revenue of $393.51 million. The company has a substantial amount of outstanding indebtedness, totaling approximately $3.131 billion, consisting primarily of securitization trust debt, warehouse lines of credit, residual interest financing debt, and subordinated renewable notes. CPS relies on various financing sources, including credit facilities, securitization programs, and other secured and unsecured debt issuances, to finance its operations. The company's ability to generate sufficient cash flow to service its debt depends on factors such as the performance of its loan portfolio, access to capital markets, and overall economic conditions.
CPS's primary product is the purchase and servicing of retail automobile contracts originated by franchised and select independent automobile dealers. These contracts are secured by new and used automobiles, light trucks, and passenger vans. The company provides indirect financing to customers who have limited credit histories or past credit problems, serving as an alternative source of financing for dealers and facilitating sales to customers who might not obtain financing from traditional sources.
CPS utilizes proprietary underwriting and servicing technologies to assess credit risk and manage its loan portfolio effectively. The company employs data analytics and risk assessment models to evaluate borrower profiles and predict loan performance. Additionally, CPS has implemented automated systems for loan processing and customer service, enhancing operational efficiency and customer experience.
The leadership team at CPS includes:
- Charles E. Bradley Jr., Chairman of the Board and Chief Executive Officer.
- Gregory S. Washer, President.
- Jeffrey P. Fritz, Chief Financial Officer.
- Teri L. Robinson, Chief Operating Officer.
- Michael T. Lavin, Executive Vice President.
These executives bring extensive experience in finance, operations, and risk management, contributing to CPS's strategic direction and operational success.
The subprime auto finance market is competitive, with several key players:
- Santander Consumer USA: Offers a range of auto financing solutions, including subprime loans.
- Wells Fargo Dealer Services: Provides financing options for a broad spectrum of borrowers, including those with subprime credit.
- Ally Financial: Offers auto financing and leasing services, catering to various credit profiles.
- Capital One Auto Finance: Provides auto loans to customers across the credit spectrum, including subprime borrowers.
- Westlake Financial Services: Specializes in subprime and near-prime auto financing solutions.
These competitors leverage their extensive dealer networks, technological platforms, and financial resources to capture market share in the subprime auto finance sector.
CPS has established strategic partnerships with numerous franchised and independent automobile dealerships across 48 states, enabling the company to source a diverse range of retail installment sales contracts. These collaborations enhance CPS's market reach and provide dealers with alternative financing solutions for their customers.
CPS's strategic considerations include:
- Market Position: As a specialized subprime auto lender, CPS focuses on serving a niche market segment, differentiating itself through tailored financing solutions.
- Competitive Advantages: The company's proprietary underwriting and servicing technologies, extensive dealer relationships, and experienced management team contribute to its competitive edge.
- Risk Management: CPS employs robust risk assessment models and data analytics to manage credit risk and optimize loan performance.
CPS's strategic roadmap includes:
- Market Expansion: Exploring opportunities to enter new geographic markets and expand dealer partnerships.
- Technological Innovation: Investing in advanced data analytics, machine learning algorithms, and AI-driven capabilities to enhance underwriting accuracy and operational efficiency.
- Product Diversification: Developing new financing products and services to meet evolving consumer needs and capture additional market segments.
By leveraging its current strengths and focusing on innovation, CPS aims to achieve sustainable growth and strengthen its position in the subprime auto finance industry.
