Consumer Portfolio Services saw auto originations drop 20% to $215.3 million in the fourth quarter 2016 compared with $269.2 million during the same quarter a year prior, the company disclosed in its latest earnings report.
The drop in volume is inline with the company’s current policy of tightening credit restrictions — including a pull back on extended loan terms — as well as a possible downturn in the auto finance industry overall, Charles Bradley Jr., president and chief executive of the company, told Auto Finance News.
“I don’t know how many people think they’re going to have a big 2017,” Bradley said during a meeting at the National Automotive Dealers Association Convention & Expo last month. “There are an awful lot of numbers that all point down.”
CPS was no exception, as delinquencies past 30 days — including repossessions — rose to 10.96% in the fourth quarter compared to 9.53% the year prior. Charge-offs also climbed to 6.97% of the total owned portfolio up from 6.23% compared with last year.
In recent months, companies almost across the board have been reporting rising delinquencies — with the exception of General Motors Financial.
“It’s funny for us because we knew in November that the quarter was going to be off, and it’s hard to know what everyone else is doing, but now we know that everyone’s quarter was off,” Bradley said. “Some of them are down 15% to 20%, which happens to be exactly where we are.”
Total receivables outstanding however did grow for the company in the quarter by 13.6% to $2.30 billion up from $2.03 billion during 4Q15.
