Classic Car Company

Frynge

I have been thinking about something for the last year and a half that i want to share with people and maybe see what you think.

Now this will be long but hopefully if you have even a fleeting interest in classic cars you will read trough it all.

I would love to own a classic car that could get used quite a bit but what is preventing this is the cost associated with the kind of classic cars i would be interested in. Take as an example a 1991 BMW 850, to purchase you will not have much change from €10000 then to tax and insure, and all that before running costs, maintenance, consumables and storage. These kind of costs don't necessarily prevent me from doing it but they do make it very difficult to justify what would be essentially a very expensive hobby.

Now of course there are other options available to me such as getting a cheaper classic car, maybe starting smaller and working up to something bigger. While i am currently entertaining that idea, in truth it is not what i want to do, and here is why. I would like to have access to a number of classic cars to drive every now and again as i saw fit. But i know that this isn't an option and so i want to make it an option.

As the title says "classic car company" that is exactly what I would propose. A company is formed with fifty shareholders (possibly a partnership would be a more appropriate legal structure I'm not sure) each effectively having one share/vote in the company. To become a shareholder you would have to invest €10000 into the company which would become the startup capital.

The start up capital would then be divided up between Kit-out, annual running costs and the purchase of cars.

Annual running costs would consist of the rent for an approx 600m^2 industrial unit @ approx €28000. Remuneration of an MD (One of the fifty members elected annually) €10000. A full time administrator €20000-€25000. A full time mechanic (I have no idea of what the going rate is) €45000. And the purchase of consumables for the cars.

Kit-out would consist of the purchase of a tow truck, flatbed trailer, 25 car storage lifts and equipment to use for maintaining the cars.

The Cars:
With approx €300k to be spent on the purchase of cars and with 50 people each having different tastes and preferences with what to buy this bit will be difficult to accomplish. But with an average allocation of €6000 per car it may be possible to make everyone happy. Now you are not going to get a lot of classic car for €6000 but with a full time mechanic on board and with fifty different people with different skills and social circles a run down classic car or a future classic car could be purchased and if need be restored into a pristine example.

I would propose that each member would pick five cars in no particular order and when all are submitted the cars to be bought would be based on which cars have the highest votes. as an e.g. I would pick an Alfa Romeo SZ, A BMW E30 M3, an Austin Mini, VW Beetle and a Mercedes 450SEL. Now if the Alfa had 20 votes it still might not be possible to get as it would be way over budget (I will deal with this later). Now an Austin Mini could be gotten well under budget @ €3000. If that was the first car bought the remaining budget per car will become €6061 which would allow more expensive cars to be purchased as this scenario repeated itself .

Now, What do you get for your €10000, other than part ownership of something sitting in an industrial unit?

1. Well, I would propose that each member be entitled to 26 4-day slots in which the get to make use of a car of their choice each year. Now obviously everyone is going to want the coolest car which would lead to a lot of overlapping so the only guarantee that could be made is that each member will get a chance to have each of the cars in a two year period.
2. After any slot making use of a car all you do is return it and any issues that crop up are then dealt with by the mechanic, meaning no worries after use.

Unfortunately if there are future classics in the fleet that are in high tax brackets it may only be possible to tax them for a 3 month period say during June, July and August.

Before you say that sounds like a very convoluted car club, I purposely used the word "Company" because that is exactly what this is. The companies purpose each and every year would be to make a profit that would pay for all the running cost and for days out for the members as well as the purchase of the more expensive models wanted.

First and foremost each car would be available to rent for a number of uses. Joe soap who wants to drive around the country, production companies who need certain models in ads or TV shows. Wedding Hire. Anyway in which the cars can be used to make money would be entertained.

Also the garage with all these cars in it could be exploited as some kind of attraction with the cars laid out for tours maybe, or for tours of school kids doing engineering and many other things I've not thought of.

The hope would be that people would get their money back in a couple of years through dividends, all the while having access to a fleet of classic cars in a completely hassle free manner.

So what do you think of my idea? Would you be interested? What are the obvious pit-falls that I have not considered?

Myself and 3 other people have been discussing this on and off for awhile now and if there was interest in it I might try and develop the idea further. This is just a quick description of my idea so feel free to ask any questions or suggest something else.

pryantcc

While I think this might be difficult to achieve from within the renal artery of a donkey, I like the idea. The money making part would be the tricky bit though, or rather limiting the expenses to match the income.
Even if you never drove any of the cars, it'd cost a lot of money to keep those cars serviced & maintained (there would be differences of opinion between the investors on what qualifies as a reasonable maintenance regime (cheap Vs expensive oil, for example, OEM Vs spurious parts, etc.)). You'd have to NCT a bunch of them going at least by your own tastes, replace tyres that are old but not worn out.

You'd also have to have a very detailed code of conduct to be signed up to. For example if you had a "no smoking in the cars" policy and someone starts to violate that, how is it handled? What if my kid rode her bike into the door of something beautiful and scratched it? Would I be liable for that? Could I bodge up a repair myself, or would I have to use an approved company supplier? You'd need some kind of inspection regime when picking up and dropping off. Something along the lines of the rental car thing. Register any damage you can find before you take it and be liable for anything new when it's returned.

It seems to be working for these guys: http://www.fantasyfleetclub.co.uk/ They used to be the classic car club of Scotland. There's a lot of detail on the website. They might even be interested in expanding over here??

Paul.

L1011

There's a few more fractional ownership supercar clubs also, Google throws up pages of them, mostly in the UK.

I suspect insurance would be the absolute killer to doing it in Ireland. Insurers here do not like "interesting" risk propositions at all.

Max Headroom

Sounds like a nice idea..but for me its about owning and driving a car that i choose, not chosen by others ...say for example you were to purchase all the cars/brands you mention, to be honest i'd have no interest in any of them...old mercs/bmw/jags etc dont appeal...i like the stuff i grew up driving escorts,imps,fiats etc...not too sure these cars would "fit" with the plan....

RR3.5

Sounds like a great idea. Where would it be located. Insurance quotes will be interesting. Would probably not need recovery trucks , contract out to existing garages

Max Headroom

RR3.5 wrote: »

Would probably not need recovery trucks , contract out to existing garages

:eek:...have you seen some of the mong's that drive these.....

RR3.5

Max Headroom wrote: »

:eek:...have you seen some of the mong's that drive these.....

Like all trades there are good and bad.

johnty56

to be honest I think it is a great idea, that with a little tweaking of the sort of issues raised above, could work really well. As for the post about Fiats etc, I am sure that for the type of budget and resources mentioned, it would be possible to have some within the fleet that would be in time warp condition!

SeanSouth

I think you have the bones of a good idea however it will all get very toasty when 50 members can't decide which cars to buy and which cars to sell.

I would prefer a simpler model where "the company" organises the infrastructure as described however each member is allocated a "storage space" in which they can place their own vehicle. They can buy and sell their own vehicle whenever they wish.All that remains then is to figure out a system for sharing the vehicles among the members.

So please consider the following model
You start with 40 members, 40 cars.
You start with one part time employee (a few days per week)
Management is voluntary (an elected board of the members)

The employee would offer the following services to the members and the company would charge for his services.

1) Regular starting and maintenance of members cars (as required by each member individually)
2) Brokerage services arranging for the sale of members vehicles
3) Basic servicing
4) Classic car transportation
5) Valeting
6) Arranging the booking in / out system for sharing cars

Members pay as you go for the services received and the idea would be that the money earned would cover the employee's wage.

Costings :

1000sq metre facility - 30,0000 euro (enough for forty cars, 1 per member)
Flat bed truck - 10,000
Insurance and other - 10,000.

Each member pays - 1250 euro per year (100 euro per month !!)

Any takers ?

RR3.5

Are you thinking of a private club. I would not expect that to work. Who would pay for repairs if the car was on hire. Lets be honest I would not let anyone drive my classic cars without knowing how they would look after them. Insurance would be a major problem regarding the hire of privately owned cars. I believe the correct way would be for the company to own all the cars imo.

SeanSouth

RR3.5, These are not big issues at all.

1. You set up rules to determine the responsibility of repairs.
2. Each member decides if they want to make their car available to others OR not
3. The member owe owns the car either gets a reciprocal car (swap) or a fee for its use to be worked out between the members and facilitated by the company.
4. Insurance is not a problem.

You really dont want to get into a situation where the club is buying all the cars. Theres a huge amount of headache right there. Who makes the decisions blah blah blah. What happens if a member wants to exit. How do they unlock their investment. The cost of repairs still remains even if the company owns the cars.

Owning the cars is a possibility for stage 2 if all goes well but you need to walk before you can run and in my experience its always better to build it up in stages.

Personally, I wouldnt be willing to put 10,000 into a new company with 50 shareholders on this basis. Would I invest 1000 / 1500 ?. Most likely yes.

dirtysoldman

This has been tried in Ireland before,they had a Jag ,Porsche 356,TR4,Ferrarri 412,Mini,E-type and several more I cant remember,based in Delgany Co.Wicklow.

sm171

Would love it if I could afford 10k. would prefer Ferraris Astons etc to Fiats and Beetles though!

Max Headroom

sm171 wrote: »

Would love it if I could afford 10k. would prefer Ferraris Astons etc to Fiats and Beetles though!

There lies the problem IMO...people forking out big cash dont go for "run of the mill" cars....so i'd imagine there would be very few people in this country with that much cash and an interest in classic cars to get involved in this idea...