A Company on the Move

Consumer Portfolio Services (CPS) recently released its third quarter earnings, and it is having a banner year. The company announced pretax income of $34.3 million, which represents a 76 percent increase year over year. Its net income came out to $25.4 million for this period, which is an 85 percent increase over the same quarter of the previous year. This shows customers need the services the company provides. Why do so many people need help to buy a car today?

The Price of a New Car

As of September 2022, a person can expect to pay on average $48,094 for a new car. Obviously, the price could be significantly higher or lower depending on the make and model selected. However, even inexpensive cars remain out of reach for many drivers today.

This isn’t surprising, as the average cost of a new vehicle a year ago was only $37,876. A person who makes $100,000 a year would be spending almost half of their yearly income to have transportation last year.

Sadly, the median household income is only $75,000 now. This means they will be spending more than half of their yearly income on a new car if they choose to go this route today.

A decline in public transportation helps to explain the significant jump in new car prices. When combined with supply issues, it is easy to see why a person will need to invest a large sum to drive a new car.

The Price of a Used Car

Sadly, used cars have also gone up in price significantly. Autolist reported in May 2022 the average cost of a used car has risen to $34,429. One year ago, used cars sold for $26,709, on average. In the period between December 2019 and December 2021, the cost of a used car went up by 42 percent.

Several things led to this jump in used car prices. The global pandemic played a large role in the price increase, as new car production came to a halt for a period. Once it started back up, demand for cars increased. With fewer new cars to buy, drivers turned to the used car market, leading to a decrease in supply just as there was an increase in demand. Owners and dealers could ask more for used cars, knowing people would pay the higher prices.

This doesn’t take into account the shortage of imported parts arising from the pandemic. With so many factors affecting both the new and used car market, it’s no wonder prices rose. However, this doesn’t mean drivers can afford a new or used vehicle today. They often need help to get into a new ride, which helps to explain the rise in revenue for CPS.

This company provides indirect financing to individuals who may not qualify for an auto loan otherwise. It works with individuals who have low incomes, those who have a limited credit history, and borrowers with past credit problems. Anyone looking to buy a late model used vehicle or a new car should learn more about how this company can help. With their help, getting a car doesn’t have to be as difficult as it appears.