John Temerian, President of Lou La Vie, knows a thing or two about relationships: “People forget the importance of customer service and doing the right thing. It’s about relationships. It’s doing the right thing because you’re going to tell five other people, “Wow, these guys really stepped up to the plate.”
Relationships are important in any business. The knowledge that you share with people I think is so important because I never learned that in school. It’s the basics of doing the right thing in your relationships. It’s the basics of understanding the tricks of the trade of any industry that you’re not going to learn in school. You will learn that being in business.
That is so key. It’s so key in any business; the relationships.”
Cite: These following interview has been added from Secret Entourage — http://www.secretentourage.com/success-stories/john-temerian
Can you share with us a little bit about your upbringing because I heard you were in the car business before getting into rentals? Tell us a little bit about that.
My grandfather immigrated to the United States in mid 50’s to pursue the American dream, and he became a great mechanic. He started working on the first Ferraris and Lamborghinis that were in the country. That evolved into owning dealerships in Massachusetts, and to have a sports car dealership in the 60’s was unheard of.
He had Ferrari 250 GTOs, Jaguar D Types, etc. My dad was so passionate about cars that he wanted to be a mechanic as well. In the 80s, he had a Lamborghini franchise dealership. I grew up around my dad and the business so I grew up sweeping floors, cleaning cars, and sometimes even changing a clutch or two.
At a young age, I fell in love with iconic cars such as the Lamborghini Countach and Ferrari Testarossa, but I never really wanted to go into the car business. I felt that I wanted to be in the marketing world or in the sales world, so I started in real estate which was weird in a way.
However, I started a car event at the age of 20 or 21 called Palm Beach Supercar Weekend which took on a life of its own. It was basically hosting supercar owners at multi-million dollar mansions, which helped sell the mansions and bring guys out.
In a couple of years, I amassed a wealth of contacts and knowledge about the marketing and car world. One day, DJ Irie from Miami Heat called me and he said, “Hey man, there’s not one corporate brand in the exotic car rental world in Miami.” I did some research and I realized that it would be really interesting to create a luxury car rental brand so here we are today with Lou La Vie.
How did you do things differently when there are tons of scams and shady rental companies in Miami with salvaged cars?
Our goal is to be here for the long run. Sadly, social media platforms like Instagram make it easy for companies to pop up overnight and allow you to borrow someone’s car without the proper insurance liability or adherence to laws pertaining to car rentals.
There are some great companies out there, don’t get me wrong, but the industry in Miami is filled with brokers and people who don’t own their cars, so they don’t care what they put you in.
As a car guy, Lou La Vie was created by enthusiasts. If I take a car home for the weekend, I don’t want to drive a salvaged title 80,000 mile car. It’s really about sharing my passion for the cars with other people. It’s exciting to get new cars like the Aventador or 16M, and I want to share that with everyone.
With the way the industry is right now, bigger companies are taking over market share. It happened in LA already. There was a ton of smaller companies and then Hertz and other big companies spent lobbying dollars to make sure that went away. Now you have Black and White, Platinum Motorsports, etc. You have about six big companies with about 100 – 200 cars.
I believe that over time, this change will happen in Miami as well. Regardless of that, we just want to do business the right way. Our reputation is most important, so we want to make someone walk away and feel like they’ve got a great product. If they scratch a bumper, something happens, we’re not going to charge you. We’re not worried about nickel and diming people. We want to see people have a great time in Miami and enjoy great cars.
What kinds of costs are associated with starting a smaller rental company?
It’s still very expensive, and it took us a long time to actually get insurance. Thankfully, prior to that I had a very small dealership, so I had some history in the car world. My family had always been in the car world. It was very, very expensive to start. I honestly don’t even know of how many companies are even underwriting the policies anymore.
When we first started, it was literally just getting a dealer’s license, getting bonding, and getting all these different things. It’s like any business though; people think it’s easy, but it’s not. You can’t expect to just wake up and get insurance and all that. Explore all the channels. Do your research.
For three to four months, we couldn’t get credit card processing because the transactions are so large compared to a store where it’s a $20 receipt. A Ferrari is $1,000 – $2,000 a day. Explore the market, explore different options, pay your dues. It’s putting in the time and putting in the effort.
Cars have to be registered properly, and they have to be insured properly. You have to have state business license, and in the state of Florida you actually have to have a short-term leasing license to be able to do that. It’s almost like having a dealership.
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A lot of guys think they can buy a Lamborghini for $1,500 a month, and then rent it to their friends for $1,000 per day. Tell me about the downfall of that.
A lot of people don’t realize in your leasing agreement, it’s illegal to release a car. It will actually say, “Not for hire, not for rental” because the main factor of the underwriting bank is that they don’t want the liability. This is a risky business in the sense that every time a client comes in, you have to do your due diligence. You can’t just give the car to anyone. You have to look at their insurance, their driving record, what credit cards they have, etc. It’s not a quick 10-minute process.
Essentially, you’re giving your $200,000 – $300,000 car to a guy that has $100,000. It’s working backwards sometimes and saying, “Okay, who is this person? Why are they renting it?” We have built up that now with our insurance company; they’ve seen our records and we turn away 50% of the people that come to us. You have to.
You’re very brand centric which I think works really well for you, especially in Miami, because you’re offering quality service, not just a sign and drive set up like a lot of people do.
People forget the importance of customer service and doing the right thing. It’s about relationships. It’s doing the right thing because you’re going to tell five other people, “Wow, these guys really stepped up to the plate.”
Relationships are important in any business. The knowledge that you share with people I think is so important because I never learned that in school. It’s the basics of doing the right thing in your relationships. It’s the basics of understanding the tricks of the trade of any industry that you’re not going to learn in school. But you will learn that by being in business. That is so key. It’s so key in any business; the relationships.
Tell me about this relationship you have with the Miami Heat.
In our branding and marketing, people love celebrities. I don’t care who they are. We were the guys that loaned Justin Bieber a car when he got arrested in Miami. We’ve always tried to align ourselves with other great brands and celebrities. For us, there’s celebrity factor in any business. We’ve always tried to align ourselves with celebrities as a luxury brand.
We support the Miami Heat, and we love the Miami Heat. These are great guys that are supportive of the area. They have done so much for the community, and they are just nice guys. They are looking at us and supporting us as we are a Miami-based business. Are they renting cars? No. They already have their own cars; however, we can support them and they can support us; we’ve created a great relationship. There’s no actual “official partnership,” but they are at all of our events, and we support them in any way we can. We’ve been able to do that with great brands as well like Hublot or Keurig Coffee. We try to build the company around other great brands and also learn from them.
You carry a very unique line of inventory such as the Ferrari 16M, but to most people it looks just like a regular F430. Why do you stock such unique vehicles?
Honestly it doesn’t make much sense, but we are car enthusiasts at heart. When we first opened, we had a Superleggera with no radio; it’s a race car. It wasn’t the best business decision, and you wouldn’t believe how many times I tried to convince people that it’s a race car for the street. I think for us it’s about building up a fleet that people can still utilize. We’re always trying to get the first, latest, and greatest machines in Miami.
What do you think is the worst car you have ever offered?
I even hate to say this, but one car that has been tough to rent is the Nissan GTR. It’s such a niche car, and guys who like that car want to drive the car really, really hard. I like guys that come in and rent cars for 2 – 3 days. They are often here with their families, are CEOs of a major corporation, staying at the W, etc. They are not looking to race, but just looking to enjoy the cars.
The GTR is a cool, fast car, but it’s not my favorite. It scares people. It’s so quick. We were just getting guys that wanted it for five hours to see how fast it would go. That’s not our motto, and we don’t want people doing that. We don’t want people hurting other people.
A car that did not do well for us, but I was passionate about was the Mercedes SLS. It was just a poor business decision even though it looked awesome. It sounds great, it’s fast, and it’s comfortable. It’s an awesome car, but it was a tough sell. We ended up recently getting rid of that, because it was just a hard car to rent. The Lamborghinis and Ferraris are great cars though, because they are flashy and people like it.
I would love to get a McLaren; I don’t know if there’s enough of a following yet to have a McLaren, but I love the car. For the price point where they are now, you can get in the car for great money.
I really want to do a Ferrari 458 Speciale, but they are very expensive right now. You’re talking Aventador money, but what a cool car. We almost did a Ferrari F12. I don’t think it would have done that well.
Tell me a little bit about how you find the right cars for your inventory.
You want to have the newest, latest, and greatest obviously. Also a car like the Ferrari 16M, you’re not going to lose any money on that car. If anything, I think they have gone up a little bit.
You must buy a Gallardo at a certain price. The SLS, again, are not going to go down much more. It’s a great car and a great value. The McLaren MP4, they are not going to go down much anymore either.
I’ve always tried to do that with everything we buy, and I tried to compete as much as we could with cars that hit the margins.
Cars like the Ferrari F430 Spyder, they’ve hit most of their depreciation. They are great cars and don’t really break too much. I love cars like that. The experience is awesome and in many ways, it’s so unique compared to a Ferrari 458 which has got all the bells and whistles.
Lou La Vie now offers a membership to access the fleet. Tell me a little bit about it and how it works.
The membership model has died, but I think the reason for that is people haven’t done it the right way. It’s like running a small hotel; you have to keep the attention level. You have to keep people active in events and experiences, and that’s really where we excel.
My background is the events world, so if you can offer a group of guys things that they never would have access to, then that’s exciting for them. We do things for our members that are totally out of the box, whether it’s a private event with Felipe Massa or a one-on-one race with someone. Mike Tyson had a great fight here at the arena, and then we did a private meet and greet with him after the event. We do private track events for the guys like car rallies. Our memberships start at $20,000 to $50,000 for the year.
It’s a point-based system and really for guys who are very affluent. They are guys who probably have had a Range Rover, a Ferrari 458, a Porsche Turbo, and a Lambo sitting in their garage in Miami, but are here for only 1 – 3 months out of the year. When they get in town, they are here for a week, and guess what, when they go to their garage their car doesn’t start or the tire is flat because the car has been sitting for six months. They just hit $50,000 depreciation, and then there’s a new model out.
For us, it’s about giving these guys the same experience of a collection of cars, without the depreciation and on demand. “I want the new Aventador, and I want a Range Rover for my wife for two weeks. Boom, it’s done. Clean and ready to go.
But you only have so many Aventadors in stock, so how does that work?
We only have so many members; it’s not like we have 4,000 members. There will be a cap at a point where will have to buy more cars. If we expand to 50 – 100 more members, of course, we will have to get more cars, but for now we have enough. Guys just want to enjoy different cars. When we got the I8, literally, that first week two of our members said, “Hey, you just got the I8. I really wanted to try that car, but I didn’t want to buy one.” They got to experience it; they didn’t get hit with depreciation or $30,000 over sticker, and they still got to take it around town and enjoy it. It’s really about us mitigating the cost for these guys and making sure that the hassle is completely gone with ownership.
Do you have more than one person fighting over the same vehicle?
It’s really first come, first serve, and you have to respect that. If someone booked a car a month in advance or two weeks in advance, you have to respect that; and I think when it comes to members and clients, you have to ignore the monetary value. You really have to respect people because they will respect you. If you’re honest with the member, 99% of the time, they work with us and we will go above and beyond for them anyway. It’s like a small family; our members know every staff member by first name.
Looking ahead into the future, tell me a little bit about which model you plan to expand more: the membership model or the retail model?
What we have found is that we’re an intake system for high net worth individuals. We found that watch brands like Hublot or car companies like Cadillac, want to work with us and want to meet and greet our clients on any level. It doesn’t matter if it’s a product, a hotel, or a restaurant; because many times when someone acquires wealth, they book their plane and hotel ticket to Miami, and we are their first or second stop once they are here.
We want to be able to offer different products, goods, or services in a boutique atmosphere where people can hang out, come to our events even if they are not driving cars, and really as a destination for men whether it’s art, speed, or design. Our goal is really to become that centerpiece in Miami as a fixture, and a destination for guys to come to.
When we developed the art gallery inside our normal operating business, some really great events, and some great activations; that’s what the business turned into. On May 2nd, Hublot hosted a private event here for their best clients for the Mayweather fight.
We’ll never be a concierge company. That’s not what we’re trying to do, and we tell our clients that it’s not who we are. We work with concierges, but for us, it’s developing that full experience for people. We want them to come in and see a cool vintage car on display, talk business or hang out, and decide what they are going to take for the weekend. That’s really what we try to do for our clients.
What is the one thing looking back that you feel as an individual, not necessarily in the business sense, that you have evolved into?
I think the biggest thing I’ve learned is to identify your weaknesses. I know there are things that I’m terrible at. I’m not good with financials, I’m not good at managing people, and I’m not good at managing my schedule. I’m great at buying and selling cars, I’m great at marketing the company, and I’m great at being out and doing business development. That’s what I’m good at. I brought in a great general manager, and when I brought in people that filled those holes in my life, everything changed. I think if you focus more on your weaknesses and say “I need help with this” versus focusing on your strengths, you start to really figure things out and can spend all of your time on exactly what you’re good at.
What does it take to work for you?
I hate to hear ‘no,’ and I hate to hear negativity from anyone that works with me. Don’t come in with a problem; I don’t believe in problems. I don’t believe in anyone coming and saying, “Oh, we can’t do this. We can’t do that.” I hate that.
I look young for my age and for a young guy starting off at 24 years old, you’re told “no” all the time in everything in your life. I think taking that “no,” turning it around, and understanding that you don’t take no for an answer; my staff and everybody that’s around me has to understand that I can’t take no for an answer. I hate that. I hate hearing, “No, that’s not going to happen. We can’t do that.”
Tell me about three tips you have for someone trying to get into the exotic car rental business?
I would say the biggest thing is the marketing and the branding. That’s one. Two, your relationships: don’t try to burn a client. If someone scratches a wheel, let’s say the retail cost is $500 – $1,000 to fix the wheel, but your cost might be $200 – $300. Let it go. That’s the cheapest way to own a client for life. The third word of advice is don’t get too creative when buying cars. You can’t look at the cars as a personal thing, just don’t use the cars.
Additionally, don’t put miles on the cars. This is not a toy box. There are so many times where I’m left on the weekends with no cars to drive besides my own personal vintage cars. You can’t get upset about that. This is business first and foremost; this is not to have fun. At the end of the day, the miles are depreciation. They are going to cost you money in the long run. If the cars get damaged, then you can’t rent it for a week.
Most importantly, it’s keeping the level of cars clean and nice, the condition very high, and always servicing the cars. If you don’t service the cars, you’re going to have big problems in the long run. Bring them to big, certified dealers even though the cost initially might be more expensive. Keep your cars in warranty. Keep your cars new. Keep your cars as fresh as possible, and the problems are going to be that much less. A $70,000, 40,000-mile Gallardo is only going to cost you 10 times more in the long run than in the short run.