Shared car ownership
Discussion
I'd really like to know what peoples opinions are of shared/fractional car ownership (not supercars or car clubs) are? this is already done with boats, planes, property, business, supercars etc.
i.e., say 3 people get together who each want to buy, for example a boxster for £15k. Each party puts £5k in, and gets to use the car for 121 days (365 / 3).
All costs are split 3 ways. Petrol is as you use it. You can sell your share at any time. And to avoid fuss, a legal document stating all this plus more is signed by all parties.
Useage booked on first come first serve basis on a calendar accessible to all parties.
Therefore you may get to have ownership of that car you thought you'd never thought. And in most cases this would be a weekend car if they bought it outright, so they wouldnt use it more than 1/3 of a year anyway.
Would really like to know how many would do this if there was a safe, documented way of making it fair. All comments welcome & appreciated
Thanks, Mark
i.e., say 3 people get together who each want to buy, for example a boxster for £15k. Each party puts £5k in, and gets to use the car for 121 days (365 / 3).
All costs are split 3 ways. Petrol is as you use it. You can sell your share at any time. And to avoid fuss, a legal document stating all this plus more is signed by all parties.
Useage booked on first come first serve basis on a calendar accessible to all parties.
Therefore you may get to have ownership of that car you thought you'd never thought. And in most cases this would be a weekend car if they bought it outright, so they wouldnt use it more than 1/3 of a year anyway.
Would really like to know how many would do this if there was a safe, documented way of making it fair. All comments welcome & appreciated
Thanks, Mark
Depends on the people involved.
Can be a nightmare.
One of the three may not care about scratches for example or kerbed wheels. The other 2 do but the other chap refuses to pay for touch up/refurbs etc.
You may get the car for a 3rd of the year, but WHICH third. The one getting this type of car all summer will be happy, the others less so. One wants to go on a road trip with his O/H at the same time as one of the others.
One does 10,000 in his third of the year but the others only do 2/3 thousand but are they happy to subsidise wear that the high miler is doing.
What are your plans if something big goes wrong (engine failure for example), can you all stomach costs etc. what if car needs regular clutches as one of the drivers slips it all the time etc. All happy to pay 1/3rd the cost?
What if one of the 3 wants out (needs money etc.), unless you have a replacement then have to sell the car even though 2 still want to keep it. Can the other 2 afford to buy his share out etc..
I would see this as an absolute nightmare on a normal car. Makes some sense if it's a track day slag or race car type thing.
Can be a nightmare.
One of the three may not care about scratches for example or kerbed wheels. The other 2 do but the other chap refuses to pay for touch up/refurbs etc.
You may get the car for a 3rd of the year, but WHICH third. The one getting this type of car all summer will be happy, the others less so. One wants to go on a road trip with his O/H at the same time as one of the others.
One does 10,000 in his third of the year but the others only do 2/3 thousand but are they happy to subsidise wear that the high miler is doing.
What are your plans if something big goes wrong (engine failure for example), can you all stomach costs etc. what if car needs regular clutches as one of the drivers slips it all the time etc. All happy to pay 1/3rd the cost?
What if one of the 3 wants out (needs money etc.), unless you have a replacement then have to sell the car even though 2 still want to keep it. Can the other 2 afford to buy his share out etc..
I would see this as an absolute nightmare on a normal car. Makes some sense if it's a track day slag or race car type thing.
Big issues are:
- exiting the arrangement. Do you have to find someone else to buy in? Do you all sell the car and split the amount 3 ways? Who does the selling and decides an acceptable price?
- where is it stored? If it's in someone's garage, do they pay more (for the convenience) or less (as they're contributing storage that you'd be paying for otherwise)?
- how fastidious are you all about maintenance? How much tread left on tyres before replacement? How frequent are oil changes? Do you get niggly little jobs done ASAP so the car always stays perfect, or let some slide to save costs?
- minor damage - chips, scratches, wheel kerbing - again, do you keep the car 100% perfect? Send it to a repairer every 6/12 months to get minor issues fixed? Leave it till you want to sell?
- insurance - if you're all similar risks then great. What if someone picks up a load of points and sends the shared insurance bill through the roof?
- exiting the arrangement. Do you have to find someone else to buy in? Do you all sell the car and split the amount 3 ways? Who does the selling and decides an acceptable price?
- where is it stored? If it's in someone's garage, do they pay more (for the convenience) or less (as they're contributing storage that you'd be paying for otherwise)?
- how fastidious are you all about maintenance? How much tread left on tyres before replacement? How frequent are oil changes? Do you get niggly little jobs done ASAP so the car always stays perfect, or let some slide to save costs?
- minor damage - chips, scratches, wheel kerbing - again, do you keep the car 100% perfect? Send it to a repairer every 6/12 months to get minor issues fixed? Leave it till you want to sell?
- insurance - if you're all similar risks then great. What if someone picks up a load of points and sends the shared insurance bill through the roof?
I tried this on a cheap banger for a charity rally with the intention of a track day car after. Car had to be sold and rally cancelled.
Complete nightmare.
- If someone wants to sell their share do all others have the cash to buy them out?
- If they want to sell their share to someone else can you veto them?
- Where do you keep it? This is where mine really fell down - mate's garage had to be cleared out leaving nowhere to keep it
- If it's in someone's garage can you get access to it at all times?
- If it gets broken into/breaks down/crashed in someone's posession and is off the road for someone else's turn whose days does this come off?
I could keep going with that list too - so much potential for this going wrong. Things are still a bit tense with my mate as I'm still completely gutted.
Complete nightmare.
- If someone wants to sell their share do all others have the cash to buy them out?
- If they want to sell their share to someone else can you veto them?
- Where do you keep it? This is where mine really fell down - mate's garage had to be cleared out leaving nowhere to keep it
- If it's in someone's garage can you get access to it at all times?
- If it gets broken into/breaks down/crashed in someone's posession and is off the road for someone else's turn whose days does this come off?
I could keep going with that list too - so much potential for this going wrong. Things are still a bit tense with my mate as I'm still completely gutted.
One of my friends fathers did this with a Porsche boxter. Seemed to work pretty well for him. You've just got to make sure you do it with people you completely trust, have the same ideas on upkeep etc, and sign paperwork that everyone is totally happy with. Amongst trusted, good friends I think it could work really well.
We did this 5 years ago on a hack (E30 316) for work we all threw I think £70 in a pot to purchase the car money work paid us to use our own car for their business covered all servicing / MOT costs (Not that we got it serviced) we took it in turns to put petrol in. It worked well insurance was third party and we all chipped in so that was really the only cost per year we had to meet.
We had an understanding that if someone wanted out they gave their share to the ones remaining after all it was only £70 not the £5k you guys are talking about. I was the last man standing after the 3 years and when the MOT needed £200 of welding (Rot had set in) I weighed it in and got my money back!
I could see it working well with a kitcar that has little depreciation but something like a Porsche which could depreciate more you have the problems with one leaving, you cant sell a third of a car.
We had an understanding that if someone wanted out they gave their share to the ones remaining after all it was only £70 not the £5k you guys are talking about. I was the last man standing after the 3 years and when the MOT needed £200 of welding (Rot had set in) I weighed it in and got my money back!
I could see it working well with a kitcar that has little depreciation but something like a Porsche which could depreciate more you have the problems with one leaving, you cant sell a third of a car.
Thanks all for your replies so far.
All the points made are valid ones, but many of them can be ironed out with a legal document covering many things like maintenence etc.
when i say 1/3 a year useage i dont mean literally someone has the car in winter, someone else in summer etc. That wouldnt be fair. Again a document would state for example, no more than 7 consecutive days in the summer or something like this.
I think a lot of people assume this would be an off the cuff 'yeah lets do it' kind of thing, whereas i'm thinking along the lines of something a lot more organised and civil. contracts for exactly this idea already exist so its not as if you're signing the back of a fag packet.
I cant quite get my head round why this way of working works really well with planes, boats etc, but not cars - the same pitfalls apply with both planes and boats. They all need maintaining, they all need money spending on them etc.
Surely if its done properly, formalised, and with people you are comfortable you can trust, the pitfalls should be minimal?
BoRED S2upid said:
you cant sell a third of a car.
Physically no, but you can sell a share in anything, including a car - i've seen it being advertised.All the points made are valid ones, but many of them can be ironed out with a legal document covering many things like maintenence etc.
when i say 1/3 a year useage i dont mean literally someone has the car in winter, someone else in summer etc. That wouldnt be fair. Again a document would state for example, no more than 7 consecutive days in the summer or something like this.
I think a lot of people assume this would be an off the cuff 'yeah lets do it' kind of thing, whereas i'm thinking along the lines of something a lot more organised and civil. contracts for exactly this idea already exist so its not as if you're signing the back of a fag packet.
I cant quite get my head round why this way of working works really well with planes, boats etc, but not cars - the same pitfalls apply with both planes and boats. They all need maintaining, they all need money spending on them etc.
Surely if its done properly, formalised, and with people you are comfortable you can trust, the pitfalls should be minimal?
tog said:
I know several people who share classic cars and it's not a problem. You must need know each other very well and be able to trust them to be sensible, at all stages of ownership /maintenance / selling.
Couldnt agree more!. If it was £100 then fair enough you probably wouldnt care too much, but anything from a couple of grand upwards means you're not going to want to take the mick as theres a fair chunk of your hard earned involvedLegal documents are all well and good.
How are you with suing your mates over breaches of contract? I'm sure when things (may) get tricky, your friendship will really go down well then.
What if a mate loses his job, wants out etc. Are you sure that you can get someone equally a mate (or someone you trust) to buy in?
There's no getting round it, it's a chance you have to take if you want to do this, there's not much you can do to really cover all parties and keeping it friendly.
Maintenance fund should be paid up front (and overestimate rather than underestimate, let's say £1k each min) and make it a yearly contract. At the end of the year, the car gets sold. In the event that everyone wants to continue, you do the same again (all put into maintenance fund up front etc.). If anyone wants out of the deal, they must find a buyer for their share or agree for all 3 parties to sell the car. Anyone opting out must accept loss of all their share if they can't find a buyer (or sacrifice a proportion of their share to the other 2, e.g. their share goes from 33% to 20% for example and other 2 both have 40%).
I can see this, maybe working, if it's a track car, a very cheap car or if all members of the party are wealthy enough to not worry if it all goes tits up.
How are you with suing your mates over breaches of contract? I'm sure when things (may) get tricky, your friendship will really go down well then.
What if a mate loses his job, wants out etc. Are you sure that you can get someone equally a mate (or someone you trust) to buy in?
There's no getting round it, it's a chance you have to take if you want to do this, there's not much you can do to really cover all parties and keeping it friendly.
Maintenance fund should be paid up front (and overestimate rather than underestimate, let's say £1k each min) and make it a yearly contract. At the end of the year, the car gets sold. In the event that everyone wants to continue, you do the same again (all put into maintenance fund up front etc.). If anyone wants out of the deal, they must find a buyer for their share or agree for all 3 parties to sell the car. Anyone opting out must accept loss of all their share if they can't find a buyer (or sacrifice a proportion of their share to the other 2, e.g. their share goes from 33% to 20% for example and other 2 both have 40%).
I can see this, maybe working, if it's a track car, a very cheap car or if all members of the party are wealthy enough to not worry if it all goes tits up.
I think that's the part that really matters, are all invertors in a financial position where this is just a bit of a laugh. I think if this was the case it SHOULD be ok. If anyone is digging around to find cash they I'd stay well clear.
What if one of the owners felt it was ok to head to the 'ring for a week? I wouldn't be happy to pay for tyres/brake pads/extra wear and tear that a week like that would put on it.
Far too many what-ifs to completely cover in a contract.
Re: the boats/planes, these are seen as extra luxuries used fairly rarely, cars are seen as every day 'essential' items that we are seriously used to having around. It's all down to how we view them.
If I had £5k to kick into the pot for this deal to get a partial share in a £15k car I'd be out, unless it was something seriously interesting. My £5k would be on something I could buy outright and use when I wanted for what I felt like.
What if one of the owners felt it was ok to head to the 'ring for a week? I wouldn't be happy to pay for tyres/brake pads/extra wear and tear that a week like that would put on it.
Far too many what-ifs to completely cover in a contract.
Re: the boats/planes, these are seen as extra luxuries used fairly rarely, cars are seen as every day 'essential' items that we are seriously used to having around. It's all down to how we view them.
If I had £5k to kick into the pot for this deal to get a partial share in a £15k car I'd be out, unless it was something seriously interesting. My £5k would be on something I could buy outright and use when I wanted for what I felt like.
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