By Alex Bradford
MBA candidate, Harvard Business School

Key terminology for evaluating fractional exotic car clubs:

• “Car Share Club” – generic term for any club where membership enables members to use cars.
• Sign-Out Period – the amount of time a member can use a car per usage, usually measured in days. Minimum sign-out periods range from 1-7 days, while maximum sign-out periods range from 1-2 weeks (depending on the club and plan).
• Member-to-Car Ratio – the number of members per car. Understand how a club uses this ratio, as this ratio does not tell you much about how available cars will be. Some clubs have large percentage of inactive or less active members, whereas other clubs have a higher percentage of active or very active members. A better ratio to use is the availability ratio (below).
• Reservation Rate – the percentage of time that a member can reserve his or her first-choice car. Some clubs do not track this rate.
• Pay-per-Use – members pay each time they use cars, as opposed to using pre-paid points or days to use cars. Clubs usually have a minimum sign-out period (e.g. 3-day minimum).
• Points-per-Use – members use pre-paid points for each use.
• Fractional Ownership – members own rights to usage and, in some cases, equity in cars as well. Note: Most “fractional ownership” clubs do not offer equity in cars.