Can money be made in exotic car rentals?
Discussion
For years I have contemplated in setting up a car rental business, because I think I would enjoy it and for the returns.
A friend of mines who made his money from domain names and number plates back in the 90's said he would be willing to partner up would invest 6 figure some into the venture, however we are both concerned about how to go about the venture.
I guess to break even we would have to have each of these cars out half of the year.
We wouldn't buy brand spanking new exotics but a few months old to minimize the unpreventable depreciation that comes with most cars.
We are looking to start up with £2m concentrating on obtaining cars such as Ferrari's, Lamborghini's, Rolls Royces and so on and Chauffeur services.
A friend of mines who made his money from domain names and number plates back in the 90's said he would be willing to partner up would invest 6 figure some into the venture, however we are both concerned about how to go about the venture.
I guess to break even we would have to have each of these cars out half of the year.
We wouldn't buy brand spanking new exotics but a few months old to minimize the unpreventable depreciation that comes with most cars.
We are looking to start up with £2m concentrating on obtaining cars such as Ferrari's, Lamborghini's, Rolls Royces and so on and Chauffeur services.
Judging by the number of people who try it and go bust I'd say "no".
Issues include,
Issues include,
- Everyone wants the car at the weekend - it'll be stationary Mon to Thurs.
- Everyone wants the car in the summer - it'll be stationary all Winter.
- Many rental cars suffer driver abuse - an exotic will attract more of this.
- Renters will damage the car, so it will spend time in the workshop. People renting an expensive exotic will expect a perfect car.
- The car will be in the workshop at exactly the time of week/year that others have booked a rental, they will be annoyed.
doogz said:
Are there many 'few month old' exotic cars out there to buy? Do people really buy new Ferraris, Lamborghinis, etc, then sell them after 3 months?
I suspect that there is a decent supply of them out there. Sadly, I suspect that this is because demand for new exotics means that the second owner will be paying slightly over list, which makes it a bit daft 
Yes, but the there is more competition - in form of rental and car clubs - than in the past, so the margins would be smaller.
Of course most people will want it for the weekend, but the relatively high rates make it still a viable business model.
You will need a specialist insurance which will costs a little fortune.
Of course most people will want it for the weekend, but the relatively high rates make it still a viable business model.
You will need a specialist insurance which will costs a little fortune.
I have a friend who has been doing this sort of thing for a bit and while it can be profitable, it can take you a while to get to that point and there will be times where you will be out of pocket. Some of the things to look out for
1. Insurance for companies like this is very expensive, he was talking 5 figures per annum.
2. It's not a regular income, i.e. you won't make any money in winter so you either need to have capital to cover that or not rely on it as your sole source of income.
3. People will break the cars either mechanically or cosmetically, this is inevitable.
4. Not all the cars are bought as you will never make money this way, most are borrowed for a reasonable fee from owners who want to subsidise the cost of ownership by renting out their cars so you either need to know some rich people willing to lend you their cars or hang around Knightsbridge a lot in the hope of making some new Arab friends.
5. Cars which aren't borrowed are rarely bought outright as tying up huge sums of money on depreciating assets isn't a great idea. Most are leased\financed which means you can work out your monthly costs in advance and offset some of those costs against the business.
6. You need somewhere secure to keep all these cars otherwise you will be ferrying them backwards and forwards from all over London which costs time\money.
7. You need to have a cast iron booking\deposit system in place and pay someone to design you a proper website otherwise people won't hand over £1000's to some dodgy fly-by-night operation.
8. You need to be able to offer alternatives in case a car is out of action due to maintenance.
9. It will take you a while to build up a solid customer base during which time you need to finance the running of the business out of your own pocket. His advice was to start small with 2-3 cars and then work yourself up otherwise the cost of running lots of cars which are sitting around not earning you money could be very quickly crippling.
1. Insurance for companies like this is very expensive, he was talking 5 figures per annum.
2. It's not a regular income, i.e. you won't make any money in winter so you either need to have capital to cover that or not rely on it as your sole source of income.
3. People will break the cars either mechanically or cosmetically, this is inevitable.
4. Not all the cars are bought as you will never make money this way, most are borrowed for a reasonable fee from owners who want to subsidise the cost of ownership by renting out their cars so you either need to know some rich people willing to lend you their cars or hang around Knightsbridge a lot in the hope of making some new Arab friends.
5. Cars which aren't borrowed are rarely bought outright as tying up huge sums of money on depreciating assets isn't a great idea. Most are leased\financed which means you can work out your monthly costs in advance and offset some of those costs against the business.
6. You need somewhere secure to keep all these cars otherwise you will be ferrying them backwards and forwards from all over London which costs time\money.
7. You need to have a cast iron booking\deposit system in place and pay someone to design you a proper website otherwise people won't hand over £1000's to some dodgy fly-by-night operation.
8. You need to be able to offer alternatives in case a car is out of action due to maintenance.
9. It will take you a while to build up a solid customer base during which time you need to finance the running of the business out of your own pocket. His advice was to start small with 2-3 cars and then work yourself up otherwise the cost of running lots of cars which are sitting around not earning you money could be very quickly crippling.
I think the idea is tempting because it seems that it would let you have a fleet of cars that most people only dream of, while other people get to pay for them.
For me, at least, I think the reality of having to deal with some of the customers would make it a utterly miserable experience.
I suspect that there would be a lot of brain damage dealing with some of the punters that will knock on your door and the problems they will create.
For me, at least, I think the reality of having to deal with some of the customers would make it a utterly miserable experience.
I suspect that there would be a lot of brain damage dealing with some of the punters that will knock on your door and the problems they will create.
probably the money is in having decent wedding cars, but I bet they go out of style quickly and of course people want quirker cars.
how many stretched hummers, american limos, stretched audi Q7's do you now see up for sale etc... whereas once they were the sheer height of (bad taste) for some people and clearly very much in demand.
who else is doing it out there ?
I think in all my years on the planet I can only recall one person ever hiring an exotic car........ that was an e type jag for his 60th. that doesn't even hit yr category.
how many stretched hummers, american limos, stretched audi Q7's do you now see up for sale etc... whereas once they were the sheer height of (bad taste) for some people and clearly very much in demand.
who else is doing it out there ?
I think in all my years on the planet I can only recall one person ever hiring an exotic car........ that was an e type jag for his 60th. that doesn't even hit yr category.
BJG1 said:
Someone should do this with interesting classics IMO. I have no interest in paying an eye-watering amount to take a 458 out for the day, but I'd love to be part of a car club that had a Capri, 205gti etc - take away the hassle of owning a classic
Yep I'd agree, add an e30 m3, Lancia Integrale, Ur Quattro and a few other choice selections and I'm there. Depreciation also wouldn't be such a huge factor in such an endeavour.Gassing Station | General Gassing | Top of Page | What's New | My Stuff