Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 870

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 4
Chunk 870
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 estimate future losses on current pools. Historical loss experience is adjusted
as necessary for current economic conditions. We consider our portfolio of finance receivables to be relatively homogenous and consequently
we analyze credit performance primarily in the aggregate rather than stratification by any particular credit quality indicator. Using
analytical and formula driven techniques, we estimate an allowance for finance credit losses, which we believe is adequate for current
expected credit losses that can be reasonably estimated in our portfolio of finance receivable contracts. Net losses incurred on finance
receivables are charged to the allowance. We evaluate the adequacy of the allowance by examining current delinquencies, the characteristics
of the portfolio, the value of the underlying collateral and historical loss trends. As conditions change, our level of provisioning
and/or allowance may change.

     F-10 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Charge Off Policy

Delinquent contracts for which
the related financed vehicle has been repossessed are generally charged off at the earliest of (1) the month in which the proceeds from
the sale of the financed vehicle are received, (2) the month in which 90 days have passed from the date of repossession or (3) the month
in which the Contract becomes seven scheduled payments past due (see Repossessed and Other Assets below). The amount charged off is the
remaining principal balance of the Contract, after the application of the net proceeds from the liquidation of the financed vehicle. With
respect to delinquent contracts for which the related financed vehicle has not been repossessed, the remaining principal balance is generally
charged off no later than the end of the month that the Contract becomes five scheduled payments past due.

Contract Acquisition Fees and Origination Costs

Upon purchase of a Contract
from a Dealer, we generally either charge or advance the Dealer an acquisition fee. Dealer acquisition fees and deferred origination costs
are applied to the recorded value of finance receivables and are accreted into earnings as an adjustment to the yield over the estimated
life of the Contract using the interest method. However, for receivables measured at fair value, we do not record acquisition fees as
an amortizing asset related to the receivables, nor do we capitalize costs of acquiring the receivables. Rather we recognize the costs
of acquisition as expenses in the period incurred.

Repossessed and Other Assets

If a Contract