N.E., Calif. auto clubs unite on services

LOS ANGELES – The Automobile Club of Southern California, the nation’s largest, is joining forces with the auto club serving members in Maine, Vermont and New Hampshire to expand services while cutting the cost of providing them.

The partnership will give members of AAA Northern New England access to better road service technology and insurance services while allowing the California club to spread its costs over a larger base of dues-paying members, the club said Tuesday.

The California club is not buying the New England club, both of which are not-for-profit organizations. The two organizations will retain their own identities, including their names and boards of directors.

The clubs said the deal is designed to keep dues low while expanding services. Now, both clubs offer the lowest dues in their geographic areas.

With its 6.6 million members, the Auto Club of Southern California is able to invest in computerized dispatch of tow trucks and local call centers, and use its size to sell less expensive insurance and offer discount travel packages – much more than AAA Northern New England can do with its 700,000 members, an executive said Tuesday.

That realization has already led to the New England club hiring the California organization to publish its member magazine, design its Web site and start its vehicle purchasing program, according to Tom McKernan Jr., president and chief executive of the Automobile Club of Southern California.

“It’s very hard if you have a very small membership base to make those kinds of investments,” McKernan said.

The New England club approached McKernan about a broader alliance because it wanted to offer members a better insurance program than they could on their own, acting as a broker for other companies, McKernan said.

“We’re really establishing a services type arrangement so we get the benefits of scale and they get the benefits of our services, but we both maintain local identity and stay close to our customers,” McKernan said.

The affiliation could offer an alternative for smaller clubs looking to survive.

Smaller clubs have been consolidating over the past decade. The California club bought clubs in Hawaii, New Mexico and Texas in 1996 after those clubs had financial difficulties and were taken over by the AAA.

McKernan said it has been approached by other smaller clubs about a similar relationship.