Pete Corelli owns Lakeview Custom Coach in Oaklyn, NJ. Corelli has also served as President of the South Jersey Limousine Association for the past two years. During his tenure as President, the SJLA has offered its members a group insurance program, has effectively dealt with a number of local issues, has raised the visibility of the local limousine industry, and has engaged in fund raising for the Sunshine Foundation – an organization dedicated to terminally ill children.
Few people are more deeply involved in the limousine industry than Pete Corelli who recently spoke with Limousine & Chauffeur about a number of subjects.
Limousine & Chauffeur: What makes of limousine do you handle at Lakeview Custom Coach?
Corelli: We primarily handle Corporate Coachworks...the Wide Body and the standard car. We’re dabbling with the idea of taking on another line. Sales are way up. May was the best month we’ve had since we’ve been in business the last three years, so things are looking real good. All in all, business is still growing out here. We’re getting a real good response from private individuals and corporate buyers.
We’ve opened a new service facility in Atlantic City, and we’re planning our Grand Opening. We’re not completely done renovating the front office yet, but we are going to open it to handle our Atlantic City accounts. Because of the casinos, Atlantic City is the hub of the limousine business in South Jersey. We sell a lot of limousines to the casinos, and it has been a problem to service them. In the month that we’ve been open, the business has been more than we can handle down there. We’re also planning to expand our body shop another 3,000 square feet in the near future because of the demand for the business.
Limousine & Chauffeur: What kind of facility do you have in Atlantic City?
Corelli: It’s an 8,000 square foot building...strictly for service. It has the capacity of working on 12 limos at a time. Basically, it’s all service. It’s an old building that we’re renovating. It only came equipped with lifts. We’ve got three above-ground lifts, and one Front End Rack. All brand new equipment.
Limousine & Chauffeur: Are you an authorized Lincoln service facility?
Corelli: We’re still working on it, and we’re coming very close, There is a lot of paperwork involved, but my service manager has a lot of dealership background and knows how to handle the paperwork and the intricacies of doing warranty work. Lincoln is looking at us very closely.
We sell approximately 10 to 15 limousines a month on an average. Last month we did 24 cars. Lincoln has taken that into consideration. They have a big hold on the limousine market over Cadillac, and they’re trying to be as aggressive as possible to hold onto that. By attaching to a dealer like myself who strictly handles limousines, they would have another competitive edge over Cadillac.
Limousine & Chauffeur: What kind of warranty relationship do you have with other coachbuilders?
Corelli: We do warranty work for Executive Coach Builders and Armbruster/Stageway.
Limousine & Chauffeur: Is it difficult to locate limousine financing now?
Corelli: Recently, in the last month, we’ve had a problem. Some of the lending institutions are maxing out at $40,000 for financing a limousine. They will not lease anything over that. We’re really not sure of the reason for this, but it has just come about in the last month.
I would say that 65 percent of our limousines are leased. The others are bought. We’ve got three leasing companies that we deal with locally. I have a gentleman here who places our financing.
Limousine & Chauffeur: Do you handle used limousines?
Corelli: Oh, yes. We handle used limousines all the time. In fact, the used business is very good right now. There is a big market for limousines in the $15,000 to $25,000 bracket.
Limousine & Chauffeur: Is there financing for those vehicles?
Corelli: Yes. There’s financing. In fact, it’s easier to find the financing for that right now than it is to find the financing for new limousines.
Limousine & Chauffeur: How do they establish the value on those cars?
Corelli: Well, basically through experts like ourselves. The institutions that we use have become accustomed to the limousine industry, and the new limousine market, so they can come up with a rational formula based on five or six thousand dollars a year depreciation. They have a close idea of what they feel a car is worth.
Limousine & Chauffeur: Does the fact that it’s difficult to finance a vehicle over $40,000 rule out many of your potential sales?
Corelli: Yes, it’s creating a problem. What we’re having to do is have the customer come up with more down-stroke. He has to put more down on it. It’s hampering us a little bit but, surprisingly enough, it hasn’t really hurt sales a whole lot. The people have been coming up with the money.
Limousine & Chauffeur: Do you offer insurance or extended service packages?
Corelli: We handle extended warranty programs. There are a number of them on the market. There’s a five-year, unlimited mileage program from Lincoln which we sell here.
Insurance has been a problem and I don’t see any immediate change in that. We’ve got a policy through the South Jersey Limousine Association that is giving us a relief-valve. We are at least covered now. We’re working on a risk-retention plan and, within the next month or two, we will have a self-insurance policy for comp, collision, and physical damage. It will be very beneficial to us cost-wise, and we will have control over it which is another thing the association likes. They will have control over the people who get involved in their insurance plan. There is some relief in sight with that.
Limousine & Chauffeur: Would you ideally like to have a second line of limousines on display at Lakeview Custom Coach?
Corelli: We are looking for a lower-line livery car for the person who doesn’t want all the amenities...A basic people mover. The coach that we handle now is a high-line car. Both the Wide Body and the straight car have all the amenities when you buy them. We’re trying to get a car that’s a little more suitable to the guy who doesn’t need all those options. Then we will have enough product to cover the market.
Limousine & Chauffeur: Are Wide Bodies being put into livery service?
Corelli: We’ve got a half a dozen out there just in the South Jersey area now and they’re going over very well.
Limousine & Chauffeur: Is any added service needed with a Wide Body?
Corelli: None whatsoever. On the inside, the Wide Bodies are the same...just bigger. It’s all-steel construction so we have no body problems whatsoever. The car has been 100 percent car reliable right down the line.
In the beginning, we did have some start-up problems, but you always have those when you first build a car whether it is a Wide Body or a straight car. Once we worked through the design problems, we really haven’t had any problems on the Wide Body at all.
Limousine & Chauffeur: What trends do you see in the kinds of limousines people are looking for?
Corelli: If you had asked me that a half a year ago...I was a short car man. I was thinking that things were going to go backwards. Instead of the 65-inch or 70-inch car, I thought people were going to go back to the
“Even in our area, which is considered saturated with limousines, the market continues to grow.”
50-inch car. Instead, they seem to be selling right around 60 inches. Showboat Limousine just bought two 75-inch cars from us, and they ordered three more.
I don’t know. That’s something I wouldn’t want to speculate on. I speculated the 50 inch…and everyone wanted the 60 inch car.
Limousine & Chauffeur: What accessories are popular among limousine operators?
Corelli: Cellular phones are very big in our area. It is almost a must now for every limousine owner to have a cellular phone. At this particular point, they have become so much mere economical to own, and so practical to have in our industry, that it is basically a must. You really feel lost without a cellular phone in a limousine.
Limousine & Chauffeur: Are those installed by coachbuilders?
Corelli: No. They get put in afterward. Although installing cellular phones is very lucrative, it’s also a very competitive industry. Rather than get involved in another cutthroat industry, we let the customer purchase his own phone. That way he gets the phone that he’s satisfied with and he can pick all the amenities that he wants.
Limousine & Chauffeur: Are you implying that there are some potential problems involved in installing or servicing cellular phones?
Corelli: Not really. We own approximately five of them for our own vehicles and we have had very minimal problems with them service-wise.
Limousine & Chauffeur: Are you in the livery business at all?
Corelli: We have rental units. We rent cars to the livery people when they have an accident, or a problem, or their car is out. The only reason I’m not in the livery business is because it would be a conflict of interest.
Limousine & Chauffeur: Were you a livery operator at one time?
Corelli: Yes. I had a 15-car fleet in Atlantic City. That was what really got me started in the limousine sales and service business.
I’ve been in the automotive repair business for 18 years. I got into the limousine service business, and then I began to specialize in limousine repairs after I got into the rental business. Then the sales came after that. But automotive repairs have been my business tor the last 20 years really.
Limousine & Chauffeur: What do you see in the future for the limousine industry?
Corelli: We really see the market as still being very strong. If I had speculated about the industry two years ago, I think I would have been wrong. I didn’t think it would be this strong...and still growing the way it is. Even in our area, which is basically considered a saturated area for limousines, the market still continues to grow. There are more and more people who are using limousines every month.
The abundance of limousines in this area opens people’s eyes more. You don’t even have to sell them because they’ll sell themselves. An executive will be going down the street, see someone else in a limousine, and think...”Gee, I should probably have a limousine myself to travel back and forth to New York.” In the South Jersey area, there is a lot of money, and a lot of big businessmen get involved in New York City which is a two-and-a-half hour ride each way.
Business people are finding out that travel time can be very productive if they’re in a limousine. It almost sounds like a cliche because we say it so often, but it is definitely very beneficial to these people to buy, a limousine rather than to spend $35,000 on a Porsche or something like that.
Limousine & Chauffeur: Do you think that business use is one of the biggest potential growth areas in the limousine business?
Corelli: Yes I do...Both for limousine sales, and for livery operators. I think the corporate buyer, and the corporate renter, are both aware that they can definitely be utilizing a limousine. And, of course, the no-drinking and driving has also helped to extend the private market. I would have to say that the corporate market is a very big area of growth now.
Limousine & Chauffeur: When did you first get involved in limousines?
Corelli: About eight years ago.
Limousine & Chauffeur: In your perspective did you see a drop in the limousine business because of insurance and increasing competition over the last couple of years, or has the industry grown steadily each year since you have been involved?
Corelli: I have not seen a downside yet. I would have speculated that there would be, but I have not seen it. I suppose I shouldn’t feel too inferior because this is a new industry and we don’t have anything to go by. It’s very hard for anybody to go out there and say that they see a cresting and a coming down because you really don’t know where the end is at this point.
There are many people out there... and some aren’t into a limousine yet because they don’t even know what a limousine is. To us, limousines are second nature because this is our business. It’s amazing when you exhibit at a car show...not a trade show...but an actual car show...and you find how many people really don’t know about limousines. Now when we have done car shows, they have really helped to rejuvenate us many times because we were reminded how large the market is. It gives us a second wind. I suggest that coachbuilders go to regular car shows because you find so many people who don’t really have a clue about limousines. We are really just tapping the edge of this industry. There could be some huge, un-tapped markets out there still...You just don’t know.
Limousine & Chauffeur: Are you still President of the South Jersey Limousine Association?
Corelli: Yes, and our meeting is tonight. Tonight is basically elections.
Limousine & Chauffeur: Are you up for re-election?
Corelli: Fortunately, our by-laws say we can only serve for two years. I will stay as a board member I’m flattered to continue being involved because I have a lot of ties with the association. I think the key to our association being “successful,” and I use that term loosely, is that we have a nice group of members.
I also feel we have been successful because I am not in competition with anyone in the association. Our members can be forward and open with me because my main concern is the growth of the industry. If the industry grows, my company gets strong. Rather than being an operator who’s out there stealing people’s customers, my concern is that if they make money and they do well...then our whole industry does well and I do well.
Limousine & Chauffeur: What are some of the major things the association has accomplished over the last two years?
Corelli: The major thing is that we have secured insurance. We talked about that in our board meeting today. We really did a lot at our board meeting today and we wondered why we couldn’t do this much a year ago. Someone came back with a very good answer and pointed out that we were wrapped up in insurance. There wasn’t much else you could do because it was such an important part of our industry. We were trying to enable people to stay in business.
We have fought some local ordinances and we’re in the process now of changing an ICC ruling. With an ICC license, you’re required to have a million and a half worth of liability insurance. That value is based on a formula of $100,000 per person...based on a 15 passenger vehicle. What we are trying to do is revamp that because none of our limousines hold 15 passengers. We want the requirement revised to $100,000 based on a six-passenger vehicle. The minimum would then be $600,000 worth of insurance rather than $1.5 million.
Limousine & Chauffeur: The ICC applies to you because you go to New York?
Corelli: Yes. There are three or four states that we encompass and almost everyone really needs an ICC license here. You go to New York from New Jersey, and from New Jersey to Delaware and Maryland. You definitely need an ICC license.
Limousine & Chauffeur: The industry in New Jersey still has three associations doesn’t it?
Corelli: To the best of my knowledge it does. I have been so preoccupied with our association in the last three months that I haven’t really been too involved with the North Jersey Luxury Limousine Association or the Private Limousine Association. But they are still in effect, to the best of my knowledge.
Limousine & Chauffeur: Would you say the industry, as a whole, has become more professional in the state even though it remains fragmented?
Corelli: Yes. I think there might also be a fourth association that is forming. Organizations are a sign of professionalism. Whether it is a good association or a bad association, it is still a group of livery operators who’ve gotten together and talked about their problems. That shows professionalism.
Atlantic City is starting to do some organizing on its own. We’ve got some members in our association, but Atlantic City is like another world and they’re trying to get some organization down there. Limousines have definitely become a big business in our area...rather than just “mom-and-pop” operations.
Limousine & Chauffeur: Are there any other local problems for the industry?
Corelli: I don’t know that there are any big problems at this particular point. We just don’t see anything in the near future that we are going to have a lot of problems with. If anything, we’ve got some airport problems. It’s not a big issue and it seems to be getting solved. It started in North Jersey at Newark Airport and now it has filtered down here.
We’ve started to have some problems, but I think we’ve nipped it in the bud by going right to the people at the airport rather than to the politicians, or the police department, or the PUC. We go right to the director of the airport and we explain to him that this is hampering his customers. We just started to address the problem about two weeks ago, and we are getting a response pretty quickly.
Limousine & Chauffeur: Are you doing anything about the elimination of gypsy operators?
Corelli: The problem in New Jersey is that, to operate a limousine, you have to have “LL” plates, which are livery plates. To get them, all you have to do is show a certificate of $50,000 worth of liability insurance that is registered in the city or town that you work out of. That makes you a legal limousine company within the state.
The problem is that there is no enforcement. If you go to the state police, they’ll tell you it is a local police problem. If you go to the local police, they don’t even know what the law is, so they don’t handle it.
Limousine & Chauffeur: I would think that most people would have at least $50,000 worth of insurance.
Corelli: That’s not the problem. The problem is that they’re not going to give you $50,000 insurance for a commercial limousine. You have to get more than that. What happens is that a guy gets a limousine, puts regular plates on it, and gets regular insurance which is less than half of what it costs for us to get commercial insurance. There’s nobody in the state of New Jersey who will take the bull by the horns and enforce that law.
Limousine & Chauffeur: Is that a common problem?
Corelli: It’s a big problem. It’s slowly correcting itself without enforcement but we still have, in our immediate marketing area...a twenty mile radius...a couple larger companies that work with absolutely no insurance. We have even given evidence to the state police and have gotten no response...none whatsoever. The biggest problem is not the law, because we’ve got the law, but we just can’t get them to enforce it.
When the industry becomes larger, maybe they will recognize us and do something about it. It hasn’t gone to the Legislature, which is a very long, drawn out procedure which takes a lot of time. We don’t like the fact that there’s someone out there in a limousine without the proper insurance but, without the proper enforcement, there’s just nothing to go by. It makes our industry look bad.
Limousine & Chauffeur: Do you feel there is a need for government regulation in the construction of limousines?
Corelli: If you look at the major accidents involving limousines, the number of injuries and fatalities is low considering the number of limousines that are on the road. That is one of the reasons that I think the insurance companies are ripping us off.
Limousine & Chauffeur: Do you feel that there is pretty good quality in the cars from major coachbuilders?
Corelli: Yes. The major coachbuilders have come so far in the past five years that a car made five or six or seven years ago can’t even match. Most of all, the coachbuilders have improved structurally. Construction-wise they have exceeded the manufacturer’s specifications. There’s no more, “Gee, don’t pick it up from the side, it’ll bend.” Those kinds of failures don’t happen anymore. The frame structures, for the most part, are twice as strong as they need to be. There’s a lot of overkill in the construction of the cars and that’s good. It’s good that the coachbuilders are covering their backsides.