Consumer Portfolio Services’ originations fall 20.7%

Consumer Portfolio Services ’ originations declined in the fourth quarter and the full year as the financier prioritized margins and credit health. The subprime lender’s purchased contracts, or originations, decreased 20.7% year over year in Q4 to $363 million, according to the financier’s March 11 earnings release. For the full year, originations came in at $1.6 billion, down 2.6% YoY. Despite tighter credit standards, 2025 was CPS’ “third-best origination year in our 35-year history,” President, Chief Operating Officer and Chief Legal Officer Mike Lavin said during the company’s March 11 earnings call. "Overall, when you consider the factors that were against us, [it] was a pretty good year," -- Mike Lavin, CPS “We heard from the trenches that dealers were reporting lower foot traffic , and we saw, at times, increased and in some cases irrational, competition for less business ,” he said. “Overall, when you consider the factors that were against us, $1.62 billion was a pretty good year.” Q4 revenues up CPS’ portfolio stood at $3.8 billion at yearend 2025, up 8.2% YoY, according to the release. CPS was the 49th-largest auto lender by outstandings at yearend 2024, according to the latest Big Wheels Rankings data . Fourth-quarter revenues totaled $109.4 million, up 3.9% YoY. The financier expects the portfolio to “grow substantially in the coming year,” Chief Executive Charles Bradley said during the call. CPS plans to drive growth, Lavin said, by: Hiring new sales reps and adding new territories; Adding more active dealers to the lender’s network; Increasing application volume to 325,000 a month from 250,000 a month; and Leaning on strategic risk initiatives that have been successful. In Q4, CPS rolled out its ninth-generation credit scoring model, which uses AI and machine learning, and resulted in an uptick in application approvals and funding percentage, Lavin said. “We found that, at least so far, the new model has increased our approvals [by] 11%; they were running in the low-40 percentiles, and now they're running in the low 50-percentiles,” he said. “It's kept our capture flat ... and increased our total funding to about 8.4% just by implementing that new model.” DQs tick down Credit performance across the Irvine, Calif.-based lender’s book in Q4 improved, with 31-plus-day delinquencies at 11.83%, down 28 basis points (bps) YoY, according to the release. The rate of annualized net charge-offs was 8.04% of the average portfolio in Q4, up 2 bps YoY. “Potential delinquencies ... were down year over year, and extensions remain at our historical average as a percent of the portfolio [and] about the same as benchmarked against our competitors in the subprime space,” Lavin said. “We found that using the right collection techniques ... fought off [wider macroeconomic] trends.” -- Mike Lavin, CPS “We found that using the right collection techniques and processes along with our customers still prioritizing their car payments fought off [wider macroeconomic] trends.” Originations from 2022 and 2023 were “not particularly profitable,” and now make up about 26% of CPS’ portfolio compared with about 40% of the portfolio in the beginning of 2025, Bradley said. “We would expect that number to gradually decrease over the year,” he said. “To get that piece of bad credit out of the portfolio is very good.” Recoveries rose by 130 bps YoY to 28.5%, and CPS decreased its provision for credit losses to $462,000, accounting for next to nil of the portfolio, from $712,000, or 0.1% of the portfolio, a year prior, according to the release. “Recoveries are a critical part of reducing our losses and increasing our net income,” Lavin said, adding that while recovery levels are below the low-40% range CPS prefers, recoveries are trending higher on 2024 and 2025 vintages compared with 2022 and 2023 vintages. “Once the 2022 and 2023 vintages flesh out by the end of this year, our recoveries will get back to normal,” he said. Shares of Consumer Portfolio Services [Nasdaq: CPSS] were trading at $7.56 at market close today, down 2.1% from market open. CPS had a market capitalization of $166.9 million. Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. Register by March 27 for early-bird savings. To see event agendas and register, visit autofinance.live .

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Consumer Portfolio Services’ originations fall 20.7%

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