Several years ago, Dan Darvish hit a professional roadblock. He was working at an independent Los Angeles rental agency that catered to hotels and movie studios. There was steady demand for sedans, camera trucks and 15-passenger vans, but Darvish wasn’t satisfied. Believing there was bigger business in better cars, he began reaching out to more upscale hotels and petitioning his boss to add luxury and exotic units to satisfy their wealthy guests.
“He was adamant against it,” Darvish says. “He was a very conservative businessman, and a niche market was out of his comfort zone.” And so Darvish went looking for a source for luxury rentals. “Everybody said, ‘You gotta call Sam.’”
Sam Zaman, that is, owner of Black and White Car Rental in Beverly Hills, Calif. Zaman and his father, Jay, opened the business in 1994, when Sam was still in high school. They started with a small insurance-replacement fleet and quickly cornered the local body-shop market. “We showed the body shops they had an option (to the national chains),” Zaman says, which meant offering a better class of replacement vehicle, establishing direct billing with insurance companies and “bending the rules” of the corporate RAC standards such as qualifying underage drivers.
After his father retired in 1999, Zaman took over the business and rewarded himself with a brand-new Porsche Carrera. Parked on Black and White’s corner lot, the Carrera began to get attention from would-be renters. Swayed by popular demand, Zaman began renting out his Carrera and looking for additional upscale units.
“‘Are you crazy, renting out your car?’ That was the first reaction I would get,” he says. “There was a lot of risk. It’s like giving one guy eight Corollas.”
Standard and Exotic
By the time he met Darvish, Zaman had already begun to expand his luxury fleet. He started with Mercedes-Benz sedans, scaling up from C-Class to E-Class and then S-Class, which has become their most popular luxury unit. He then partnered with BMW of Beverly Hills and added a fleet of 3, 5 and 7 Series.
“Seventy percent of Sam’s cars were on rent to other companies,” Darvish says. “And he had no sales, no marketing; he was wearing 15 different hats.” The two decided to join forces. Darvish came on board as general manager and went to work drumming up more hotel and studio business.
Nonetheless, standard rentals still account for more than three-quarters of Black and White’s 420-vehicle fleet. How to market both remains the question. “We’re fighting it out as we speak,” Darvish says. “Should we have two separate websites or one site where people can choose from regular cars or super exotics?”
Buying and Selling
Fleet financing was “a big hurdle to jump over.” Black and White has worked with 1st Source Bank from the beginning — a relationship that grew slowly. “They’ve been wonderful, like family,” Zaman says. “Now it’s like buying a Corolla. But they don’t and will not fund exotic cars for just anybody.”
Zaman buys from local dealerships. “We never leased; you cannot lease exotics,” he says. He then gives those dealerships a special rate for their customers who may want to test drive a vehicle before purchasing.
The dealers also have the right of first refusal on buying back the units. Super exotics depreciate “on a very different schedule,” Zaman says, and their resale value tends to nosedive after 10,000 miles. [PAGEBREAK]
Protecting the Investment
With such high-priced assets, the vehicle walk-around is a vital part of the rental process. Demonstrating vehicle controls to customers and showing them how to park, negotiate driveways and even open the door are essential.
Many exotic models have their own idiosyncrasies, and expensive ones at that, such as the Lamborghini’s low (and easy-to-scrape) front bumpers or the Dodge Viper’s $20,000 replacement hood. Luckily, for drivability’s sake, super exotics have become more accessible since OEMs began to phase out stick shifts in favor of paddle shifters, Darvish notes.
Customers need their own insurance coverage, and Zaman personally calls a customer’s credit card company or insurance provider to confirm their policy details. Foreign renters are a challenge, as their insurance does not cover overseas car rentals, and Black and White creates a form of collision damage waiver for them.
The mileage cap is 50 per day on most of the super exotics; the agency’s newest acquisition, a $500,000 Lamborghini Aventador, is only allowed 35. GPS tracking devices are “a must” — and Mexico is off-limits entirely.
Most states allow agencies to report a vehicle stolen after a seven-day waiting period; in California, they have to wait four weeks. Zaman says because of his established relationship with the Beverly Hills police force, they have been more accommodating, investigating thefts sooner and keeping an eye on the rental lot.
The Price of Fame
Movie studio business is good business. “Studios have nice, big budgets,” Zaman says, which translates to flatbed transport, minimal miles and great insurance. “You just feel comfortable and confident that if anything happens to the car, they’ve got a $10 million binder to cover it.”
Black and White vehicles have been in their fair share of music videos, movies and commercial shoots. “Production coordinators tend to be hush-hush about what it will be used for,” Zaman says, adding that he’s opened the DuPont Registry to find his Ferrari 458 in a tire advertisement.
Zaman counts many of Hollywood’s elite as his best customers. Realizing that they might not want the public to know their flashy new ride is a rental, he doesn’t use company-branded license-plate frames or key chains.
Darvish says most of Black and White’s famous clients prefer to be discreet, but several, including Lionel Richie and Justin Bieber, have taken it upon themselves to promote the rental agency on Facebook or Twitter. “It’s amazing,” Darvish says. “One Tweet from a Jonas Brother was enough to crash our website.”
Sometimes, though, catering to a high-profile client ends with unwanted attention.
In January, Lindsay Lohan was sued by a woman who claimed she was struck by a Maserati GranTurismo driven by the actress in September 2010. To Zaman and Darvish’s surprise, Black and White Car Rental was named as a co-defendant. Knowing they had never even owned a GranTurismo, Darvish called the plaintiff’s lawyer.
The attorney assumed that because the Maserati’s license-plate frame was from Ferrari’s Beverly Hills dealership — one of Zaman’s regular suppliers — the vehicle was rented from Black and White. Black and White has since been removed from the case.
Expanding the Brand
During the recession, rentals slowed, though lack of cars in the market drove prices up. “The used-car market was really strong at that time,” Zaman remembers. “That saved us.”
Now, they’ve begun to expand. Last year, Zaman opened a second location near Los Angeles International Airport. The company had also considered opening offices in Las Vegas, San Francisco and San Diego, but has not yet pulled the trigger.
“Sam preaches slow growth,” Darvish says. “We are growing, but we’re going to be conservative. We want to make sure our market share here is strong.”
Zaman and Darvish are working overtime to launch a limousine subsidiary staffed by licensed and bonded drivers. A new franchise agreement with Hawthorne, Calif.-based EagleRider will allow them to begin renting Harley-Davidson motorcycles this year.
For additional articles and news from the Auto Rental News May/June magazine issue, click here.