Company: CPSS
Filing Date: 2025-11-24
Form Type: 424B2
Source: 0001683168-25-008655
Chunk: 23

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-11-24
Form: 424B2
Chunk 23
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 are unable to make
timely payments on their receivables.

| 18 |

The above described negative
economic factors, as well as others, have also historically resulted in decreased consumer demand for motor vehicles, which may result
in an increase in the inventory of used motor vehicles and depress the price at which repossessed motor vehicles may be sold or delay
the timing of those sales. If the default rate on our receivables increases and the price at which the vehicles may be sold at auction
declines, our financial position, liquidity, results of operation and our ability to enter into future financing transactions may be adversely
affected.

If interest rates rise, our results of operations may be impaired.

Our principal means of financing
our portfolio of automobile contracts is to issue asset-backed notes in securitizations. The interest payable on such notes is our largest
expense. Although such expense is fixed with respect to issued securitization trust debt, the terms of future securitizations may vary.

The credit spread between the
interest rates payable on our securitization trust debt and the rates payable on risk-free investments has varied. The Federal Reserve
increased interest rates multiple times in 2022 and 2023. As a result, we have experienced increased interest expense in 2023. In 2024,
the Federal Reserve lowered short term interest rates. The pace and direction of additional interest rate changes remain uncertain. If
interest rates on risk-free debt increase, or if our spread above risk-free rates increase, or both, we would expect an increase in interest
expense. If interest rates in general should rise, our expenses would likewise rise, which could have a material adverse effect on our
financial position, liquidity, results of operation and our ability to enter into future financing transactions.

If we are unable to compete successfully with our competitors, our results of operations may be impaired.

The automobile financing
business is highly competitive. We compete with a number of national, regional and local finance companies. In addition, competitors or
potential competitors include other types of financial services companies, such as commercial banks, savings and loan associations, leasing
companies, credit unions providing retail loan financing and lease financing for new and used vehicles and captive finance companies affiliated
with major automobile manufacturers, such as Ford Motor Credit Company, LLC and General Motors Financial Company, Inc. Many of our competitors
and potential competitors possess substantially greater financial, sales, technical, personnel and other resources than we do, including
greater access to capital