Few people today have ready access to the cash needed to buy a reliable car or truck. In the absence of financing options, that can leave someone contemplating the purchase an old, untrustworthy vehicle.
Individuals with strong, positive credit histories can secure loans from banks or other conventional lenders. Companies like Consumer Portfolio Services work behind the scenes to open up automotive financing options for others.
Enabling the Popular “Buy Here, Pay Here” Model
Car dealers have offered on-site financing for quite a few years, but the nature of the average offer has changed. Decades ago, most such financing options were made possible by lenders operated by car manufacturers like General Motors.
Typically targeted at new-vehicle purchases and especially credit-worthy buyers, these loans tended to be of somewhat limited applicability. In most cases, borrowers would opt for this style of financing only when the associated terms bested those then typical of banks.
About 25 years ago, an essentially new type of lender started shaking up the status quo. Choosing to partner with independent car dealers instead of those tied to the major manufacturers, this type of lender aimed at a different part of the market.
Since then, the associated style of financing has become the preferred option for many car buyers nationwide. In addition to being more accessible than most other options, this style of borrowing brings other benefits to the table.
A Better Way for Many Car Shoppers to Borrow
Instead of forcing lenders to stick to extremely rigid, strict standards, for example, indirect automotive lending adds some leeway to the equation. Dealers who are tasked with looking into the details will take factors other than a would-be buyer’s credit score into account.
Having a dealer assess loan applications also does away with a sometimes-disruptive step in the process of purchasing a car. Buyers often find that they can accomplish in a single afternoon what might otherwise take them many additional hours.
As a result, more and more car shoppers opt to patronize dealers who have relationships with indirect lenders. This often makes it much easier and more affordable to buy a reliable vehicle, thanks to the increased availability of financing.