Consumer Car Buying Advice Blog

The latest news from bad credit car loan lender CPS could mean good news for bad credit car loan buyers

New Credit Facility

At Auto Credit Express we see that subprime lender Consumer Portfolio Services announced today that it had entered into a $50 million two-year credit facility with an affiliate of the Fortress Investment Group. According to CPS, loans from this facility “will be secured by automobile receivables that CPS now holds or will purchase from dealers.”

“We are very pleased with this new facility as it will allow us to begin growing our new contract originations again,” said Charles E. Bradley, Jr., Chief Executive Officer. “During the credit crisis over the last year and with the lack of other credit facilities, we have focused on preserving liquidity. As a result, so far this year we have purchased only nominal amounts of new contracts. With this financing we will be able to take advantage of what we believe is a tremendous market opportunity, as many former competitors have exited the industry.”

CPS

Like other bad credit car loan lenders, CPS has seen its efforts hamstrung by the poor Asset-Backed Securities (ABS) market that has existed for over a year. Without a way to sell its loans on the open market, it has been unable to generate the cash that it needs to originate new loans.

And while this latest credit facility is definitely a step in the right direction, according to company sources it is insufficient to allow the lender to immediately open lending in all the states that it formerly served.

What this means for bad credit car buyers

While the latest news is definitely good news for bad credit auto loan shoppers, it also sends a definite signal that the economic recovery, while on the horizon, is still not fully underway and that subprime lending’s return to pre-recession levels will take some time.

At Auto Credit Express, our advice to consumers seeking bad credit car loans hasn’t changed since the beginning of the financial crisis:

• Know your credit score and what’s contained in your credit report
• Plan on coming into the loan with at least 10 percent down in cash or trade equity
• Keep the loan term as short as possible
• Buy a compact of midsize vehicle and put off looking at your dream car until after you’ve reestablished your credit.

We’re here to help you

For nearly 20 years, Auto Credit Express has been helping people with credit problems get approved for new and used car loans. Our affiliate dealers work with the leading subprime lenders to get you approved. Your credit report will get checked by the dealer, but once you’re approved, each month you make your car payment you are rebuilding your credit score and reestablishing your financial future.

Unlike many other services, we belong to the Better Business Bureau and our web site is SSL secured, ensuring the privacy of your personal information. Since our inception, we have processed over 1,000,000 online bad credit auto loans and closed over 1 Billion dollars in auto loans.

Visit www.autocreditexpress.com and see what we can do for you.

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