Indirect, specialty lenders are helping people all across the country purchase cars they would otherwise not be able to acquire. Even when banks and credit unions turn up their noses at loan applications, companies like Consumer Portfolio Services frequently provide support behind the scenes that makes a real difference. A quick look at how this important type of automotive financing works could help highlight why it benefits so many car buyers today.

A Longstanding, Widely Recognized Problem for Car Shoppers

Even a quarter of a century ago, the vast majority of all car loans were extended by conventional financial institutions like banks or financing companies owned and operated by manufacturers. Since then, the automotive lending industry has opened up in ways that have made it far better equipped to accommodate the needs of more would-be car buyers.

Many people, for example, have credit histories such that qualifying for a car loan from a consumer bank will be difficult or impossible. Whether because of a lost job or a medical emergency, even responsible individuals often end up grappling with the effects of negative marks on their credit reports.

In the past, this could have left even someone who was otherwise well-positioned in financial terms struggling to obtain a loan for a car purchase. That might have meant being forced to pay cash for an older, used vehicle that would not be capable of providing reliable service.

Financing That Suits the Needs of Many of Today’s Car Shoppers

Fortunately, today’s car buyers have financing options outside those offered by banks and other traditional sources of automotive loans. Indirect lenders who partner with individual dealers account for a substantial share of all such lending, which is a clear reflection of the usefulness of the service they provide.

By relying on dealers to handle the complex work of ascertaining whether shoppers are qualified for loans, these lenders streamline the process in ways that benefit all involved. As a result, many more people than in the past are able to finance the purchase of late-model, high-quality, pre-owned vehicles that can be relied on for everyday transportation. That can even end up being the best way for a borrower to get back on firm-enough financial ground that credit problems become a thing of the past.