Prestige was founded in 1994 as the captive finance company for the Larry H. Miller Group of Cos. Miller, who died in 2009, also owned the NBA team Utah Jazz. The Miller group has 42 dealerships in seven states in the West and Pacific Northwest. It ranks No. 10 on the Automotive News list of the top 125 dealership groups in the United States with retail sales of 27,166 new vehicles in 2010.
Prestige already does business outside the Miller dealership group in Texas, Illinois, Georgia and Virginia and several other states primarily in the West. The newly added states are New Jersey, Wisconsin, Alabama, Kentucky, Kansas, Hawaii, Montana and Wyoming.
During a panel discussion at the Auto Finance Risk Summit here last month, Marcus Tarbet, senior risk analyst for Prestige, said the company has about $400 million in loans outstanding. Prestige’s customers have a weighted average credit score of about 535, he said. That’s well into the deep subprime category, according to Experian Automotive. Deep subprime, the riskiest category, is composed generally of customers who have credit scores below 550.
About 30 percent of the Prestige borrowers in a recent pool of loans were in bankruptcy, either Chapter 7 liquidation or Chapter 13 reorganization, according to rating agency DBRS Inc.
Prestige does indirect lending through about 280 dealerships outside the Miller group, DBRS said.
The average annual percentage rate on the Prestige loans in the recent pool was about 18.6 percent, DBRS said.
According to Experian Automotive, the average rate on deep subprime loans in the fourth quarter of 2010 was about 17.5 percent on used cars vs. about 6.3 percent on used cars for superprime customers -- generally those with credit scores above 730 -- at the other end of the spectrum.
DBRS said the loans in the latest Prestige asset-backed offering were about 90 percent used cars and 10 percent new.
