Buying an exotic to rent it out? good or bad idea

I have a 24 vehicle fleet of all types of mundane vehicles.

You will need to find out :your registration (for the car)costs,your compulsory third party insurance(for person damage),your comprehensive insurance costs(it will be a rental insurance company specific mob,your private insurance won't cover it),you will need to find out if there are any government(both state and federal)requirements.
You will have to build a business plan to go to the bank,you will need a comprehensive promotion campaign because the car will get repossesed if you can't make the payments.

In Queensland(Aussie),it is a self managed business we don't even have to do annual roadworthy checks on the vehicles,other states maybe different,the USA may be as well.
I suggest you google something like:car rental requirements in your particular part of the world(as you have not filled in any profile it's a bit difficult to give you any more advice)

A Lambo Gallardo,a couple of weeks ago,had a prang down south,the hirer is going to be about $20K out of pocket for the excess on the company's insurance.
That'll also bugger up the rental company's no claim bonus.
Most insurance companies will only allow you a certain number of claims before they wipe you.
This happened to a competitor in my town......he folded the business.
Hope this helps.
Simon.

 

We try to tell the truth here.

This business plan is quite frankly INSANE.

No offense intended.

 

Or another way of putting it.....Pipe Dream. The number of forums where I read about guys wanting to finance their purchase of a dream car by way of rental is a long one. The most viable rental I have seen is one like Exotic Racing near Vegas where they rent the car to you for a few laps with an instructor on a closed track. They are able to stay extremely busy to get the most use and dollars from the car while putting on limited miles in a controlled environment. I don't recall what the insurance cost was.

 

Quite a first post don't you think?

 

Nah, he just needs to think outside the box...
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What about joining a club like Gotham Dream Cars? You can pick from a fleet of awesome cars and have the experience for a fraction of full ownership. I'm not a member but I know someone who is. Most weekend he video's himself enjoying another super car. Plus you get access to their garage which is also like a insane man cave where he has parties sometimes. They have levels of use based on most budgets. Check it out. If you think about insurance, depreciation and maintenance these clubs are really not a bad idea = especially considering the huge group of toys you can pick from. Not just modern super cars but even muscle and bikes.

 

The big problem I see is people will trash a car that isn't theirs. Someone put a post on here about the expected maintenance costs based on their rental experience. They were of course, twice any other estimate. You also assume that people will pay or not dispute their credit card for the charge, etc. etc.

I think its a silly idea. Save up and buy YOUR car.

With a super car it should be your experience. Yours. Unless you're into THOSE kinds of relationships...

 

Well, we tried to tell you.

If you tell the bank the truth about this venture, they should be able to as well.

 

Most of you guys are really way too kind. I'd be calling this one like it is.

 

I'm also in New Zealand. You can't compare the American prices with the Kiwi prices. The markets are totally different. For a start, our cars are about 30-40% more expensive than theirs at the dealer, and we have far less so price holds longer.

I highly doubt Aventador prices will be in the 300s in the next 3 years. If they are, I'll be buying. We also have quite a few Aventadors, in fact, a lot for our population (more than 10 if I recall correctly, 17 seems to ring in my mind). We've also got tonnes of 458s (are you in Auckland?) They're everywhere!

I also don't think New Zealanders are the kinds of people who are interested in paying for these cars to hire. The ones who could AFFORD to hire the cars are the ones who'd be buying. And those who can't afford them and want to drive them won't be plentiful enough to create a business for.

I think 10% interest in optimistic and insurance estimate way too low. I pay almost half that for cover on a personal use Ferrari.

I hate to rain on your parade, and it's good to see a Kiwi thinking outside the box on how to make the car dream come true but this isn't the way!

I'll shoot you a PM, mate.

 

lMAO I can just picture it now. Smoked clutches, broken trans, etc. etc. Tires alone will kill the budget.

 

Yes, I can get a loan for a 458/Aventador quitie easily. But the real question is, can YOU get such a loan?

And to answer the question in the subject line............... BAD.

How old are you anyway?

 

Toil, the very first problem I see (and Simon laid some good things to consider) is that you are trying to start this business on a shoestring. I know many successful ventures have been started in basements and garages, but for each one of these there many thousands of failures due to under capitalization.

Of course it varies by business, but you need to have enough capital to lose money for at least the first two years if not more.

If I were you I'd start saving every penny and in the meantime do all the research you can. With a little luck maybe you could establish a relationship with someone in the US or Europe who would be willing to correspond with you and help you out.

And BTW, I have an acquaintance who does this with a Ferrari and an AM. He NEVER lets the cars out of his or his employees sight.

 

Remember to buy cars out of the UK it's not as simple as getting finance. Quite often you'll need the full amount of cash on hand to pay over and many financiers aren't happy to finance an overseas imported car.

I'll send you that PM now.

 

+1
Is this Meistro again? Figuring Meistro was banned and signed in with a new name etc.?

 

Who said Meistro was banned? Why would he be banned?

 

My 2 cents....Having said you have no other assets, take the 100K and put it down on a house/condo before you buy an exotic...All I see is HUGE risk in your business plan.

 

Yes. What does is he sets up a course at a large parking lot (I know he's used the one in Laconia, New Hampshire where there are Nascar races and such). He also does other escorted rides. The last time I talked to Ray was about a year and a half ago at his father's birthday party (I'm really friends with his parents, that's how I know him). At that time he told me he was doing really well. I guess he is since it appears he added a Lambo since then.

I don't know Ray well enough, and particularly you well enough (ha, ha) to personally introduce you, but he's a great guy and I'm pretty sure he would at least respond if you wrote to him. Keep in mind he's coming into his busy season up north.

Before you try to contact him read through all his website, and then read ALL the reviews on Tripadvisor. They will give you good idea of what's involved to running this kind of business.

You know the really funny thing about this? When Ray started his business he asked me if I wanted to invest. I thought it was too risky. So maybe you should disregard everything I've written.........you're taking advice from a dope!

Although one thought is maybe you can get investors. But be forewarned it is a full time job. Good luck, let me know how you make out.


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The Motorsport Lab - Boston - Reviews of The Motorsport Lab - TripAdvisor

 

Business plan? What business plan???

 

I am also in New Zealand and bought my first Ferrari a few days ago. Before that I had an Audi R8.

The problem with your idea is that you WILL have wear and tear (and likely damage) to the cars, people will not respect them like their own and EVERYTHING on cars like that is going to be expensive.

It doesn't take much for you to be massively out of pocket, not to mention all the other points people have put down here.

I understand you are trying to come up with enterprising ways to get your hands on one of these cars, but the reality is, setting up a "business venture" based around some personal goal to get an awesome car, rather than based on demand and real world research into a viable plan, is only going to lead to pain and pushing you further away from your goals.

If I were you I would focus on putting the available cash into a house, then focus on a business plan that gets you to a place where you CAN buy one of these cars without having to let crazy kiwi's smash them into the all too plentiful pot hole's on our roads.

Good luck on your goals.