How Indirect Automotive Lending Works and Why So Many Car Buyers Now Use It

Most American adults need to have access to reliable transportation in order to earn a living and keep up with other important responsibilities. Some people prefer to buy brand-new vehicles when the need arises, but that will never be the most affordable and cost-effective option.

High-quality used vehicles with plenty of service left to provide suit the needs of many adults very well. Lenders like Consumer Portfolio Services help many people finance their purchases of cars and trucks that make life a lot easier.

A Lending Model That Works Well for Many Car Buyers Today

It used to be more or less necessary for the average person to have a banker approve a loan before buying a car of any recent vintage. That is still an option, but many buyers today find that another style of financing is even more appropriate.

This can be seen in the proliferation of pre-owned car dealers who arrange for financing themselves. These independent dealers partner with lenders who specialize in catering to this part of the market.

With a detailed agreement put in place for each such relationship, dealers can extend loans while being confident that the lender will purchase them soon thereafter. The flexibility and convenience that result from this arrangement benefit many car shoppers greatly.

A Simple, Hassle-Free Way to Finance a Car Purchase

In most cases, though, people who choose to finance their purchases in this way will not need to worry at all about such details. Behind the scenes, the transfer of loan ownership from dealer to indirect lender will happen seamlessly and quickly.

Generally speaking, the loan will change hands before a buyer even needs to make an initial payment. Once the loan has been signed over to the specialty lender, the buyer will simply make payments as had been agreed upon to that party.

Many indirect lenders even maintain websites where borrowers can keep up with all their obligations and read any relevant documents. In practice, financing a car purchase in this way ends up being little different, in this respect, from the other options. As a result, most car shoppers who buy from dealers who participate in such financing systems end up being quite satisfied with their experiences.