Consumer Portfolio Services is optimistic about 2020, and expects to grow the business up to 20%, Chief Executive Charles Bradley told Auto Finance News.
The subprime lender grew business 11% in 2019, Bradley said, noting an economic slowdown in the auto finance industry might actually benefit the company.
“We’ve been rather conservative in the last couple of years, so we would kind of welcome a downturn; it might clean up the industry a little bit,” Bradley said.
In the meantime, CPS has a three-pronged strategy to reach its growth expectations.
First, the subprime lender will be testing a “nearshore” call center this year, likely in the Caribbean or South America, to supplement its existing collections operations in California, Florida, Illinois, Nevada and Virginia. With the additional call center, “[CPS] can grow a little quicker, we can get people when we need them, plus covering the different time zones is helpful,” Bradley said, noting it will be more cost-efficient than the U.S.-based centers. As CPS tests out the nearshore operation, he will be watching to see if its performance is consistent with other call centers.
Additionally, CPS is eyeing more pass-through programs, noting that the agreement with Ally Financial has been beneficial, making up 15% to 20% of CPS’ business. In fact, CPS may expand into near-prime credit quality, “which is a cut above what we’re doing,” via pass-through programs, Bradley said.
The Irvine, Calif.-based lender is also looking to grow geographically, with plans to enter the New York market this year, bringing CPS’s footprint to 49 states. Since its inception in 1991, CPS has purchased over $16 billion in contracts and services a portfolio of approximately $2.4 billion as of Sept. 30, 2019.