Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 6

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1
Chunk 6
---
 whether it results in an increase or decrease to the automobile contract purchase price, is based
on the perceived credit risk of and, in some cases, the interest rate on the automobile contract. The following table summarizes the
average net acquisition fees we charged dealers and the weighted average annual percentage rate on contracts purchased for our own portfolio
for the periods shown:

    2024  
    2023  
    2022  
    2021  
    2020 
  
    Average net acquisition fee charged (paid) to dealers (1) 
    $(50) 
    $98  
    $(150) 
    $(65) 
    $71 
  
    Average net acquisition fee as % of amount financed (1) 
     -0.2%  
     1.3%  
     -0.7%  
     -0.3%  
     0.4% 
  
    Weighted average annual percentage interest rate 
     20.4%  
     20.9%  
     18.4%  
     17.8%  
     19.3% 

  (1)
  Not applicable to direct lending platform

Our pricing strategy is driven
by our objectives for new contract purchase quantities and maximizing our risk adjusted yield. We believe that levels of acquisition fees
are determined primarily by competition in the marketplace, which has been robust over the periods presented, and by our pricing strategy.
We make changes to our pricing algorithm based on our volume goals, our own costs for borrowing and periodic recalibration of our risk-based
scoring models.

We have offered eight different
financing programs, and price each program according to the relative credit risk. Our programs cover a wide band of the sub-prime credit
spectrum and are labeled as follows:

First Time Buyer
– This program accommodates an applicant who has limited significant past credit history, such as a previous auto loan. Since the
applicant has limited credit history, the contract interest rate and dealer acquisition fees tend to be higher, and the loan amount, loan-to-value
ratio, down payment, and payment-to-income ratio requirements tend to be more restrictive compared to our other programs.

 4 

Mercury / Delta
– This program accommodates an applicant who may have had significant past non-performing credit including recent derogatory credit.
As a result, the contract interest rate and dealer acquisition fees tend to be higher