Salt Lake City, UT - After more than a decade of methodical growth and strong portfolio results as a regional niche auto lender, Prestige Financial Services, Inc. of Salt Lake City is poised to establish its national presence, servicing high non-prime through deep sub-prime car buyers. In the last six months alone, Prestige has signed with franchised dealerships in North and South Carolina, Florida and Georgia, while major markets in California, Illinois, Massachusetts, Ohio and Minnesota will be opened in 2007.
Founded in 1994 as an affiliate of the Larry H. Miller Group of Companies, Prestige achieved its initial success in the western U.S., primarily in markets where Miller dealerships existed. During this period, the lender was best known for providing auto loans to consumers in active chapter seven bankruptcy cases, a niche in which it was an early innovator and remains an industry leader.
“We built an entire department around Prestige’s open seven program,” says Rick Totten, Special Finance Manager at Carr Chevrolet in Beaverton, Oregon. “And it’s been exciting through the years to grow our business with them, as they’ve broadened their buying to cover a full range of specialty credit.”
Following extensive preparation across all areas of its business operations, Prestige added Texas in 2004, effectively doubling the customer and dealership base of its existing lending territory. The company’s first venture east of the Mississippi came a year later, when it signed a large dealership group in Maryland and Virginia.
“Texas was a turning point for us,” observes Prestige COO Robert Avery. “Of course, we were always confident that our programs and service were adding real value for our dealerships, but the reception that we received in that fiercely competitive state, from dealers with zero prior knowledge of us, really solidified our sense that, yes, we could do this on a national level, and do it successfully.”
While dealerships continue to rely on Prestige for open chapter seven, open chapter thirteen and double bankruptcy financing, the company has gained momentum across the sub-prime spectrum by doing away with minimum credit score and down payment requirements. It also offers generous advances, plus extended terms and discounted rates on certain SUVs, trucks and imports. And its Rate Reduction Program, which automatically drops the APR every three months on loans that perform well, helps dealers to sell to the more rate-sensitive of their customers with credit challenges.
While Prestige may be less well-known to many in the auto industry, it’s no stranger on Wall Street, where its transactions regularly receive the highest available ratings from agencies such as Standard & Poor’s and Moody’s Investors Service. “In the last several years, investors have become increasingly aware of the Prestige brand name and strong portfolio performance,” notes John Cho, a Managing Director at J. P. Morgan Securities. “Going forward, we see Prestige Financial being regarded as one of the benchmark players in the sub-prime auto sector.”
The company is confident that this is the right move at the right time. “From ownership to the capital markets to our mailroom, our entire organization and support structure is energized and ready for this next phase,” says Avery. “We’re going to help a lot of people to get into great cars with loans that are going to work really well for them, and we’re going to help a lot of dealerships to grow their business in the process.”
Black Book’s final depreciation report of 2018 finds prices for used cars and trucks decreased by 2.7% and 2.3%, respectively, with declines among compacts, minivans, and full-size utilities setting the pace.