Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 178

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1A
Chunk 178
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 collateral to borrow cash. In any case, the future excess spread cash flow received in respect of the residual
interests is integral to the financing of our operations. The amount of cash received from residual interests depends in large part on
how well our portfolio of securitized and warehoused automobile contracts performs. If our portfolio of securitized and warehoused automobile
contracts has higher delinquency and loss ratios than expected, then the amount of money realized from our retained residual interests,
or the amount of money we could obtain from the sale or other financing of our residual interests, would be reduced. Such a reduction,
if it should occur, could have material adverse effects on our future results of operations, financial condition and cash flows.

Our Results of Operations May be Affected by Changing Economic
Conditions

We are subject to changes
in general economic conditions that are beyond our control. During periods of economic slowdown or recession, delinquencies, defaults,
repossessions and losses generally increase. These periods also may be accompanied by increased unemployment rates, inflation, decreased
demand for automobiles and declining values of automobiles securing outstanding receivables, which weakens collateral values and increases
the amount of a loss in the event of default. Additionally, higher gasoline prices, the introductions of trade tariffs, declining stock
market values, unstable real estate values, increasing unemployment levels, general availability of consumer credit, changes in vehicle
ownership trends and other factors that impact consumer confidence or disposable income could increase loss frequency and decrease demand
for automobiles as well as weaken collateral values on certain types of automobiles. In addition, during an economic slowdown or recession,
our servicing costs may increase without a corresponding increase in our revenue. No assurance can be given that the underwriting criteria
and collection methods we employ will afford adequate protection against these risks. Any sustained period of increased delinquencies,
defaults, repossessions or losses or increased servicing costs could adversely affect our financial position, liquidity, results of operation
and our ability to enter into future financing transactions.

 20 

We sell repossessed automobiles
at wholesale auction markets located throughout the United States. Depressed wholesale prices for used automobiles may result in, or increase,
a loss upon our disposition of repossessed vehicles and we may be unable to collect the resulting deficiency balances. Depressed wholesale
prices for used automobiles may result from manufacturer incentives or discounts on new vehicles, financial difficulties of new vehicle
manufacturers, discontinuance of vehicle brands and models, increased used vehicle inventory resulting from