Applying the logic of time-shares in condos, yachts and jets, a Boston-based company offers access to exotic sports cars at a fraction of the cost of owning them.
And while the service is currently available in four major cites on the East Coast, it expects to be nationwide by the end of the year.
“We have a national network that we are developing,” said John Caron, founder and president of the Otto Club, who was in Newport recently for the 2008 Newport Concours d’Elegance. “It’s a virtual garage. Wherever you travel, whatever you want, it’s there.”
“It” being a range of cars that includes Aston Martins, Bentleys, Ferraris, Lamborghinis, Maseratis and Porsches.
Of course, membership does require “a certain level of wealth,” but nowhere near the expense of buying the cars outright.
He said while collectors may have cars in their backyard, the Otto Club offers a collection that travels with them
“The focus is on access rather than ownership,” he said.
In addition, it offers a range of cars so members can chose what car to drive at any one time. “What if you bought the wrong car?” he said. “What if you bought a Ferrari and found out that you preferred a Lamborghini?”
Caron, 40, has a background in marketing – he worked for three Boston-area startups before spending two years at Gartner Group in Stamford, Conn., where he was global head of field marketing – and argued that the model he has developed for the Otto Club differs from the standard exotic sports car club or rental company, which he said are local. That limits the market, from the number of potential clients to the available cars.
Instead, he said he plans take his company national through partnerships with local clubs.
The club currently operates out of four locations: Boston, Newport, New York and Miami. Through a combination of direct ownership and partnerships with local clubs, Otto offers a range of about 21 cars in the Northeast and 15 in Miami.
However, by the end of the year, he said he expects to add a number of locations — Atlanta, Chicago, Dallas, The Hamptons, Los Angeles, Las Vegas, San Francisco, Scottsdale/Phoenix, Ariz., and Washington, D.C. — and have a total fleet of 100 cars available for members.
How does it work?
“First you fill in a membership application and we do a background check for motor vehicle history, credit and criminal history, if any,” Caron said.
Once you pass, there are four membership levels: Silver, Yellow, Red and Black.
The silver level requires a $3,000 annual membership fee, for which you get access to all but three cars – a Saleen S7, a Lamborghini Murcielago Roadster and a Lamborghini Murcielago Coupe — in the fleet. In addition, each car has a daily usage rate, ranging from $1,380 to $630. Supplemental insurance is included and mileage is limited to 100 miles a day.
The yellow level requires a $2,000 annual membership fee plus $8,000 in prepaid credit toward daily use, which can be carried from one year to the next, for which you get access to all the cars plus a six percent discount on the daily usage rate and mileage is limited to 125 miles a day.
The red level requires a $1,000 annual membership fee plus $24,000 in prepaid credit for which you get access to all the cars plus a 12 percent discount on the daily usage rate and mileage is limited to 150 miles a day.
The black level? Well, if you have to ask, you can’t afford it.
“The black membership level is by invitation only,” said Caron, noting that it requires the ownership of an American Express Centurion Card, commonly known as the Black Card, that carries a range of exclusive privileges for an annual fee of $2,500 in addition to a one-time $5,000 initiation fee for the first year.
Caron added that the company does not divulge the privileges associated with the black level of membership. “It’s not public,” he said. “(That’s) part of the allure.”
But he said it did include what the company calls ASAP: Any Sports car Any Place.
“We will provide any car to any city for our members,” he said.
The current range of cars and their daily rates include the top of the line Saleen S7 for $3,250 a day; Lamborghini Murcielago Roadster ($2,100) and Lamborghini Murcielago Coupe ($1,800).
Rates for other vehicles change depending on location and time of week, with weekends commanding a premium. In the Boston and Newport market, a Bentley GTC, Ferrari F430 Spider and Lamborghini Gallardo Spyder cost $1,380 a day during the week and $1,920 on weekends.
The Aston Martin DB9 Volante, Audi R8 Coupe, Bentley Flying Spur, Bentley GT Coupe and Ferrari 360 Spider cost $1,080 a day during the week and $,560 on weekends.
The Aston Martin V8 Vantage Roadster, Maserati GranTurismo, Mercedes SL65 AMG, Porsche 911 Turbo Cabriolet and Porsche GT3 cost $840 a day during the week and $1,200 on weekends.
Finally, the Maserati Quattroporte costs $630 a day during the week and $900 on weekends.
Carol said he started the Otto Club because he wanted to spend more time with his children. He said he was traveling every week in his last years at Gartner and his three children ages 10, 8 and 2 wanted to see more of him.
“I needed to make a change,” he said. “I can’t tell you the last time I was in an airplane, and that’s nice.”
At the same time, Caron said he had always had an interest in cars.
“Oh God, yes,” he said, adding that he has been a car nut since he was 9 years old – “You know, the Porsche Targa poster and the Lamborghini Countach poster, we all had them” — and reckoned to have owned over 30 cars, some for as short as six weeks, some for as long as two years.
“Maybe two years, I don’t keep them long,” he said, noting that he likes to “figure the car out.”
“Each car has its own sound and feel,” he said. “They are very, very different.”
At the same time, he said he hardly ever drives the company cars.
“It’s like owning a chocolate factory,” he said. “Every one (you) eat is one (you) don’t sell.”
Caron currently drives a Range Rover – “nothing exciting” – but admits his passion is for Porsches.
He said he worked out his business plan over nine months starting in mid-2005 before launching the Otto Club in the spring of 2006.
He named it after Nicolaus Otto, a self-taught engineer whose Cologne, Germany-based company first produced a two-stroke internal combustion engine in 1867, the first practical four-stroke internal-combustion engine in 1876 and an electric ignition system, which allowed engines to become mobile, in 1884.
Caron said the run-up in gas prices is good for his club, given the savings it offers members compared with owning an exotic car.
“High gas prices are good for us,” he said. “If you drive for pleasure, you’d be more willing to belong to a club like ours.”
The club currently has 50 members and Caron said he is happy with its progress despite having nothing to compare it with.
“When you start everything completely new, there are no guard rails,” he said. “You’re constantly looking in the mirror.”
For more information, go to:
theottoclub.com