6 cars, $840k & $540k respectively - what do you buy?

[MLmotorsport]

I’m putting together 2 lists of cars for a project of mine which will be presented to some people who have the means to own such vehicles. One is a list of 6 sports/touring cars that average $90k and the other list is of more exotic sports cars with an average of $140k. Key word is “average”. First let me give you the lists that I came up with:
<o></o>
$90k
New MB SL550 $90k
New Porsche C4S Targa $90k
New BMW M6 $110k
New Maserati GranTurismo $100k
New C6 Z06 $75k
’05 Acura NSX $75k :biggrin:

<o></o>
$140k
’06 Lamborghini Gallardo $180k
’04 Ferrari F360 Spyder $170k
'07 Aston Martin V8 Vantage $100k
’05 Ford GT $150k
New Maserati GranTurismo $100k
'06 Bentley Continental GT $150k

I have come up with some average maintenance costs (services, tires, brakes, & other disposables) and an estimated residual valuethat I am applying to all cars in both categories.

For the $90k cars I’m figuring $4k per year, per car in maintenance costs. I am unfamiliar with what some of these manufacturers offer for warranty/service freebies but I’m assuming a few of them don’t offer the free maintenance programs (ala BMW/MB).<o></o>

For the $140k cars I’m anticipating an average annual maintenance and disposables cost of $10k per year, per car. ($10k may be on the low side for some but is probably high for others)
I want the best list of attainable cars which would total ~$840k collectively

For the depreciation in both categories I’m estimating that they will hold an average of about 65% of their original value after 2 years and 20-30k total miles.

-I need to know if my resale values and maintenance costs are at all realistic.
-I'm open to modifying the lists if you feel that you have better suggestions but please keep it attainable/achievable for Fall '07 purchase (ie - an Audi R8 would be on the $140k list but I don't know if one can be had by fall '07).

I know that the collective knowledge and experience of Prime members is far greater than what I can come up with in the 3 weeks that I have to prepare these lists and figures so any input is appreciated.

 

[Ski_Banker]

Ya gotta give us some idea what you're doing this for. Did someone give you a budget/mandate: I want 6 kick ass cars for $540k?

Or are you just trying to find the best cars in each price range?

For me, personally, I'd rather have 1 CGT and 1 F430 and an Accord, than 6 of those cars.

 

[01blacks4]

this buisness plan has always looked good on paper....till you now factor replacement cars when these get old.....

arent there all ready about 100 people doing this in FLA?

 

[MLmotorsport]

Ya gotta give us some idea what you're doing this for...
...For me, personally, I'd rather have 1 CGT and 1 F430 and an Accord, than 6 of those cars.

It's for a group of 6 people, each getting 4 months seat time in each car. Think of it as a "sampler" box of chocolates err.. box o' exotics.
Yes, I'd go for the CGT too. :biggrin:

this buisness plan has always looked good on paper....till you now factor replacement cars when these get old.....
arent there all ready about 100 people doing this in FLA?

Replacement cars?
I don't know of 100 others - any links? I'm not concerned about market saturation affecting me/my clients in this instance. There's more to it than I'll go into here.

I'm looking for feedback from those who have some experience with these types of cars (owners/dealers/aficionado's) to either affirm or dispute my cost of ownership figures and some suggestions for other cars in these categories that still have an air of exoticism.

 

[apapada]

what about insurance costs ? how would that work unless each member sells his latest car to the next member ?

 

[01blacks4]

thats an issue also, the only legal way to do it is as a corp. and get business auto which will be HIGH...
i am sure he has thought of that...

yes new cars, while your plan has the Depric @ 65 for 2 years w/ 20-30K on each(way high on a couple models). have you factored into you plan that in 2 years when you buy new cars the pricing will be much higher? the 4months of seat time gets more expensive...

the way i have seen 99% of these work is on apoints system, just like a time share (which is what this is)

each vehical has a point value, based on how cool/expensive it is. eacj member buys in @ $XXX which gives then X # of points. these can be traded off, or bought between members....but YOU still own the cars. this is how i would do it.

You own the cars, have them housed in a warehouse, using this as the "home address" and list each memnber of the club as a "household" member. You get to then control the fure of the cars, depric, etc etc. (selling when they are done) your members dont OWN anything except the driving rights for thier membership period

 

[Ski_Banker]

So you'll be purchasing these cars, and selling 4 month-type memberships? Or are you just facilitating a transaction where these guys are buying the cars in a pooled interest? Very different businesses and risks.

 

[MLmotorsport]

thats an issue also, the only legal way to do it is as a corp. and get business auto which will be HIGH...
...have you factored into you plan that in 2 years when you buy new cars the pricing will be much higher? the 4months of seat time gets more expensive...

This would be a bit different than a points system as all members would have an equal investment/fee. There would be safetys to ensure excessive mileage, abuse, etc is taken into account but I don't suspect any of them will be big problems. The schedule would be drawn in advance and the program would end after 24mos. It would be continued (with a new batch of cars) only if all of the participants enjoyed the experience and wanted to do it again. Correct, it is a timeshare of sorts.

The insurance is an issue and I have factored a worst-case cost into my estimates for now but I am going to see if there isn't some way this beast can be structured so that the insurance cost is is born on an individual basis (each "owner" insures the car he is driving) which would also ensure fairness.

 

[MLmotorsport]

So you'll be purchasing these cars, and selling 4 month-type memberships? Or are you just facilitating a transaction where these guys are buying the cars in a pooled interest? Very different businesses and risks.

Not completely either one but it would be closer to the latter. I would be a... "full service" facilitator but they wouldn't have as large of an initial investment or the esponsibility for the cars after the programs conlusion (as they would with a pooled interest).

 

[Hiroshima]

IMHO, I would replace the New 911 Turbo with a previous generatation 996 GT2. In the company of the other cars the "plain" turbo is too plain.

Wish I could think of something good to replace the M6 with in both of your lists because that car does nothing for me. The again, you are not building that list for me either.
-edit- I thought of a car, the M6 is a fast GT. Why not get a 550 Maranello instead? I would rather be in a 550 WAY before I would want to be in a sup'ed up BMW.:
http://www.dennigcars.org/models/ferrari_550_barchetta.htm

 

[Ski_Banker]

This might be a dumb question, Michael, but what do the customers want? Why not give them a nice color "brochure" of all the nice sportscars in __ price range -- R&T articles, etc. and have them give you some feedback. Then price accordingly. Most of the population "knows a nice car, and knows what they like aesthetically" but couldn't name the best/favorite without a list with pictures in front of them.

Also, as for 911s, there's a very good chance they already have, or have had, 911s, so anything other than a Turbo or GT is probably not too exciting for them.

 

[MLmotorsport]

IMHO, I would replace the New 911 Turbo with a previous generatation 996 GT2. In the company of the other cars the "plain" turbo is too plain.

Wish I could think of something good to replace the M6 with in both of your lists because that car does nothing for me. The again, you are not building that list for me either.
-edit- I thought of a car, the M6 is a fast GT. Why not get a 550 Maranello instead? I would rather be in a 550 WAY before I would want to be in a sup'ed up BMW.:
http://www.dennigcars.org/models/ferrari_550_barchetta.htm

Personally I'd rather have a GT2 as well. These cars will be daily drivers for businessmen so would a GT2 be a bit "raw" for that? I would also love to put a Maranello in there but the potential maintenance costs scare me to death. I remember reading a chronicle of a particular 550 owners nightmare-ownership on the web and it was enough for me to take "550 ownership" off my must-haves-before-I-die list. That link is referenced here on Prime somewhere. I'll do a little more research...

Does the M6 not do much for anyone? (I like Bimmer Mcars... and their service/warranties! ) I suppose the V8 Vantage could be a substitute for the M6 on the $90k list.

This might be a dumb question, Michael, but what do the customers want? Why not give them a nice color "brochure" of all the nice sportscars in __ price range -- R&T articles, etc. and have them give you some feedback. Then price accordingly. Most of the population "knows a nice car, and knows what they like aesthetically" but couldn't name the best/favorite without a list with pictures in front of them.

Also, as for 911s, there's a very good chance they already have, or have had, 911s, so anything other than a Turbo or GT is probably not too exciting for them.

They'll definitely be able to make suggestions but I don't have the option of getting their opinions beforehand so I'd like to hit a homerun the first time around. The only problem I see with giving them "free reign" is sticker shock. Though they might have "all the money in the world" there will be some who have limits and the cost of entry is already quite high. I don't want to lose them initially with out of hand prices. That's why I have a $90k list... just in case. If I can hook them and get them excited about it - well then the sky is the limit.

Personally, I don't think anything on the $90k list will be too exciting to these guys unless I switch in the V8 Vantage for one of them... Then at least 1 car might trip their trigger.

As for the 911 Turbo replacement... Would something like an '06 Bentley Continental GT be better? If not, what Andrew, what?!! :biggrin:

 

[Ski_Banker]

Personally I'd rather have a GT2 as well. These cars will be daily drivers for businessmen so would a GT2 be a bit "raw" for that? I would also love to put a Maranello in there but the potential maintenance costs scare me to death. I remember reading a chronicle of a particular 550 owners nightmare-ownership on the web and it was enough for me to take "550 ownership" off my must-haves-before-I-die list. That link is referenced here on Prime somewhere. I'll do a little more research...

Does the M6 not do much for anyone? (I like Bimmer Mcars... and their service/warranties! ) I suppose the V8 Vantage could be a substitute for the M6 on the $90k list.




They'll definitely be able to make suggestions but I don't have the option of getting their opinions beforehand so I'd like to hit a homerun the first time around. The only problem I see with giving them "free reign" is sticker shock. Though they might have "all the money in the world" there will be some who have limits and the cost of entry is already quite high. I don't want to lose them initially with out of hand prices. That's why I have a $90k list... just in case. If I can hook them and get them excited about it - well then the sky is the limit.

Personally, I don't think anything on the $90k list will be too exciting to these guys unless I switch in the V8 Vantage for one of them... Then at least 1 car might trip their trigger.

As for the 911 Turbo replacement... Would something like an '06 Bentley Continental GT be better? If not, what Andrew, what?!! :biggrin:

PM if you want some business thoughts - it's really hard to provide ideas without understanding your objectives/customers/financing/risk parameters. Bentley Continental GT should definitely be on the list, I should think though.

Consider also other business services you could provide once you have established the initial transaction/relationship. Track instruction would be a good example.