Company: CPSS
Filing Date: 2025-03-26
Form Type: 424B2
Source: 0001683168-25-001896
Chunk: 20

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-26
Form: 424B2
Chunk 20
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ization due to the onset of the pandemic and the effective closure of the capital markets in which
our securitizations are executed. Subsequently we successfully completed securitizations in June and September 2020, and then on a regular
quarterly schedule from January 2021 through January 2025. However, if the market conditions for asset-backed securitizations should reverse,
we would expect a material adverse effect on our results of operations.

Our results of operations will depend on cash flows from our residual interests in our securitization program and our warehouse credit facilities.

When we finance our automobile
contracts through securitizations and warehouse credit facilities, we receive cash and retain a residual interest in the assets financed.
Those financed assets are owned by the special-purpose subsidiary that is formed for the related securitization. This residual interest
represents the right to receive the future cash flows to be generated by the automobile contracts in excess of (i) the interest and principal
paid to investors or lenders on the indebtedness issued in connection with the financing, (ii) the costs of servicing the automobile contracts
and (iii) certain other costs incurred in connection with completing and maintaining the securitization or warehouse credit facility.
We sometimes refer to these future cash flows as “excess spread cash flows.”

Under the financial structures
we have used to date in our securitizations and warehouse credit facilities, excess spread cash flows that would otherwise be paid to
the holder of the residual interest are first used to increase overcollateralization or are retained in a spread account within the securitization
trusts or the warehouse facility to provide liquidity and credit enhancement for the related securities.

While the specific terms
and mechanics vary among transactions, our securitization and warehousing agreements generally provide that we will receive excess spread
cash flows only if the amount of overcollateralization and spread account balances have reached specified levels and/or the delinquency,
defaults or net losses related to the automobile contracts in the automobile contract pools are below certain predetermined levels. In
the event delinquencies, defaults or net losses on automobile contracts exceed these levels, the terms of the securitization or warehouse
credit facility:

| · | may require increased credit enhancement, including an increase in the amount required to be on deposit in the spread account to be accumulated for the particular pool; and              |
| · | in certain circumstances, may permit affected parties to require the transfer of servicing on some or all of