Press Sighting: The Wall Street Journal
June 15, 2010
Excellent piece just appeared in the WSJ about - wait for it - the exciting business of renting exotic cars!Â Many thanks to Joe White for choosing to spend his weekly 'Eyes on the Road' column on GDC and our little niche in the automotive world.Â The full story is below...
Kiss Your Dream Car Hello (and Goodbye)
By JOSEPH B. WHITE
Tony Fascenda says Lamborghinis are his dream cars. When he was young, he lusted after the Miuras of the late 1960s.
Now, he's chief executive of a Bethesda, Md., company that makes chips that allow mobile phones to place secure calls. He says he could have acquired a Lamborghini at a couple of points in his career, but he chose not to indulge himself.
So his business partner indulged for himâ€”by surprising Mr. Fascenda at a party in 2007 with a yellow Lamborghini Gallardo procured for the weekend from a Washington, D.C., company that specializes in renting exotic sports cars and premium luxury cars.
"It was a blast," Mr. Fascenda says. He gave rides to his daughter and her friends, and drove the car to New Jersey to surprise his mother.
"I took it up to 100 at one point," he says. "It was rock steady." But he didn't push it. "In a yellow Lamborghini on any public highway, you stick out like a sore thumb."
Ferraris, Lamborghinis, Bentleys, Maseratis and Porsches are products very few can afford to own. That's the whole point.
Only a very small fraction of consumersâ€”even wealthy onesâ€”are comfortable splashing out $100,000 or $200,000 or more for a car, even in good times.
But in certain citiesâ€”Los Angeles, New York, Miami, Las Vegas and Atlanta among themâ€”you don't have to be a millionaire to experience these ultra-exclusive cars.
You can rent them for around $1,000 a day from specialty companies that acquire small stables of the cars, or that arrange with individual owners to sell you time in the driver's seat.
Some of the big names in the rental car business are also dipping toes into the business of renting high performance and prestige cars.
Travelers to the U.K. can choose from a diverse fleet of prestige cars, including a Jaguar XKR or a Porsche 911 Carrera 2S (for just GBP 865.10 or $1,282) for two days, according to a quote obtained from Avisprestige.com website). In the U.S., Avis offers a "cool cars" collection that features models such as the Nissan 350Z, Ford Mustang and Chevyâ€”pardon me, Chevroletâ€”Camaro.
The "exotic car collection" by Enterprise Rent-a-Car got its start offering exotic cars to people in the movie business who wanted an elegant ride when on location, says Duane McMurtrey, Enterprise senior vice president of rental operations for Southern California.
"There is a demand for it," he says. Enterprise is looking to expand its exotic rental operations beyond Los Angeles and Atlanta, but it's being careful in the uncertain economy, he says.
Some servicesâ€”you can find them by plugging "rent exotic sports car" into your favorite web search engineâ€”are effectively time share businessesâ€”or the automotive equivalent of fractional business jet ownership.
Acquiring and renting high-performance vehicles requires caution on the part of the consumer, people in the industry say.
Renters need to be mindful that borrowing someone's car, albeit for a fee, could lead to big headaches if an accident happens. Insurance companies may not cover an accident involving a privately owned Ferrari that's put to commercial use. Know before you go.
Services that rent you their own carsâ€”such as Gotham Dream Cars, which operates in New York City and, in the winter, Miamiâ€”have insurance that will cover you (and them) beyond what your own coverage will pay.
But you need to be capable of handling a $2,000 to $10,000 security deposit on your credit card, as well as rental fees which can run to about $2,250 for two days in a Ferrari F430. (Keep in mind buying a Ferrari F430 can cost 100 times as much.)
Noah Lehmann-Haupt, founder of Gotham Dream Cars, says that if renters "don't have any skin in the game they are much more likely to damage the car."
He adds: "We rarely have to charge a penny."
About half of the nearly 20 or so cars in his fleet are Ferraris or Lamborghinis, Mr. Lehmann-Haupt says. "That's what people dream about."
In their place, he says, are people who in the good times would have purchased an exotic sports car or a prestige sedan such as a Mercedes S550 or a Maserati Quattroporte. Now some of these customers are settling for a few weekends a year in an exotic ride.
Some, however, are using Mr. Lehmann-Haupt's service to take extended test drives in cars dealers are reluctant to let out the door.
"We have had people rent cars and leave and go directly to the dealer and buy cars," he says.
The economy has been hard on some of the small companies in this field, including the one that provided Mr. Fascenda's Lamborghini. A representative of Capital Dream Cars declined to discuss the business, saying it was undergoing a management change.
Some companies are taking a broader view of what qualifies as an "exotic" or luxury car.
"It could be a Mini Cooper convertible," says Enterprise's Mr. McMurtrey. "It doesn't have to be expensive."
Write to Joseph B. White at email@example.com