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From Wrecks to Riches : 'I Only Rent to Nice People,' Says the Founder of Rent-A-Wreck. : A Portrait of an Uncommon Entrepreneur.

December 14, 1986|DOUGLAS BARTHOLOMEW | Douglas Bartholomew is a Berkeley writer.

It's 4 a.m. and he's leaving for work. His uniform consists of faded jeans, sneakers with red socks, a black V-neck T-shirt, a Levi's jacket, a black baseball cap. And the finishing touch: a pair of shades tinted the color of red wine. He owns two Cadillac limousines but prefers to drive to work in a 15-year-old Chevy pickup. Although he sits on the board of directors of the sixth-largest car rental company in the United States and owns about a fifth of its shares, he says he hates the "corporate mentality." He despises people who are late, people who never pick up a check at lunch, people who don't keep their word. Most of all, he won't tolerate people who hassle.

Would you rent a used car from this man?

Thousands of people do. Lots more would, if only he'd let them. Despite his intensely entrepreneurial spirit, Dave Schwartz turns away almost as many new customers in a day as he accepts, and not because they lack the money. Besides millionaires, he has rejected celebrities--he once refused one of the leading comedians on "Saturday Night Live." "I only rent to nice people," he says.

Schwartz is the offbeat, enigmatic founder of Rent-A-Wreck, a small company that struck it big by renting used cars. His customers are people who want to save a buck (Rent-A-Wreck charges $21.95 a day for newer cars, half of what some rental car companies charge, and only $14.95 a day for older cars), who like the nostalgia of old cars or who, in Schwartz's thinking, "are not hung up on the automobile as a status symbol."

Status--or rather the lack thereof that his cars convey on their drivers--has made Schwartz rich (his Rent-A-Wreck of America shares alone are worth about $600,000) and his business famous. With the money he's made renting secondhand cars he has built a mini-empire in real estate: houses, lots, commercial buildings, storage facilities. He appeared on the Phil Donahue show, and was written up in Time, The Wall Street Journal and The New York Times. A book on successful entrepreneurs contains an entire chapter about him.

Schwartz's business philosophy is as unorthodox as his on-the-job attire. He espouses an amalgam of the Puritan work ethic, Japanese worship of quality and a value system embracing both capitalism and anti-materialism. In other words, he believes in working hard, giving the best service and making money but not flaunting it. In fact, nearly everything about Dave Schwartz belies the conventional notions of success.

His office on the lot at West Pico Boulevard and Centinela has the decor of an abandoned baggage car. Old tires and gas cans lie piled outside. Creaking steps, peeling paint, light peeping through holes in the floorboards of a makeshift porch--from the outside, it looks like a tar-paper shack.

Inside, more of the same--exposed rafters, metal file cabinets, jumbles of boxes stuffed with auto registrations, smog certificates and rental agreements. Schwartz's office, which he shares with half a dozen employees, contains a huge black dreadnought of a desk with the message "Ron Sucks Tires" carved in its top. The only sign of modern office trapping is a copying machine beneath a Richard Nixon ("Would you buy a used car from this man?") poster.

Schwartz shuns newness and technology. He's into things that are practical, things that work . "Our dealer in Cherry Hill, New Jersey, went from being vice president of marketing at Hertz to an office with one black phone," he says proudly.

He does make exceptions, of course: There's the copying machine, he carries a beeper on his hip, and car telephones intrigue him. Aside from that, the automobile, which Schwartz claims he hates ("that's why I rent them"), and the telephone are the only modern tools he depends on.

He is at his best while manipulating his gray, push-button speaker-phone in the predawn hours, trading calls with the East Coast. When he begins his morning calls, his office, with no insulation or heat, feels like the inside of a pup tent in the mountains. The first call is to a Mr. Grable in New York.

"Where is your office? When are you coming out? In mid-February?" Schwartz gives both the daily and weekly rates, new and used.

GRABLE: How used is used?

SCHWARTZ: An older car. It will look fair and run perfect.

GRABLE: What if I break down in the Imperial Valley?

SCHWARTZ: Where is the Imperial Valley?

GRABLE: (Pause.) Where is the Imperial Valley?

SCHWARTZ: Yeah, where is it? I never heard of it.

GRABLE: You never heard of . . . ? Well, it's easy to find. You drive out past Indio, Palm Springs, the Salton Sea--that way. It's out past there.

SCHWARTZ: We have a location in Palm Springs. We can pick you up at the airport. There's a $10 charge for that service.

GRABLE: What if I break down in the Imperial Valley?

SCHWARTZ: The last time we had a breakdown was in 1948.

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