Consumer Portfolio Services, Inc. is a specialty finance company. We were incorporated and began our operations in March 1991. Our business is to purchase and service retail automobile contracts originated primarily by franchised automobile dealers and, to a lesser extent, by select independent dealers in the United States in the sale of new and used automobiles, light trucks and passenger vans. Through our automobile contract purchases, we provide indirect financing to the customers of dealers who have limited credit histories or past credit problems, who we refer to as sub-prime customers.

We serve as an alternative source of financing for dealers, facilitating sales to customers who otherwise might not be able to obtain financing from traditional sources, such as commercial banks, credit unions and the captive finance companies affiliated with major automobile manufacturers.

In addition to purchasing installment purchase contracts directly from dealers, we also have (i) originated vehicle purchase money loans by lending directly to consumers and have (ii) acquired installment purchase contracts in four merger and acquisition transactions, and (iii) purchased immaterial amounts of vehicle purchase money loans from non-affiliated lenders.

We are a full-service automobile finance company. We generate automobile contracts directly from the car dealers, collect monthly payments directly from the borrowers and manage our own repossessions and liquidations. We are organized around four primary business functions:

• Sales - identifies and signs up new dealers; generates credit applications and loan contracts from our dealer network.
• Originations - reviews and verifies loan applications and contract documents; makes the credit and pricing decisions on new loans.
• Servicing and Collections - collects monthly payments from our borrowers via check, money order, credit card, debit card or automatic withdrawal.
• Asset Recovery - repossesses and sells vehicles associated with nonperforming loans; collects deficiency balances.

Our origination and servicing and collection functions are driven by information technology. We track hundreds of factors relative to contract performance. Based on this analysis we have developed a proprietary credit scoring model that quantifies our contract purchase and pricing decisions and a risk management system that maximizes our back-end servicing efficiency.