Trends in American Culture

A growing automotive trend: rental, fractional ownership and time-shares of luxury cars.

Key Points


Resources

A directory of more than 50 such rental agencies. http://www.exoticcarrentaldirectory.com/directory.htm

Two luxury car fractional ownership companies
http://www.richguy.com/luxury/lifestyle/magazine.php?car=LAND&id=Time%20Trials%20-%20Exotic%20Car%20Rentals&aid=52&page=1
http://www.exoticarshare.com/ (Click on "Testimonials" for examples of common rental reasons and reactions)

This Seattle-based company offers what is a common pitch: : “Driving a luxury rental car is every human being’s secret dream” http://www.parkplacerentals.com/luxury-car-rentals-reasons.htm --

The New York Times article below, "What Would Steve McQueen Rent?," supports the facts above and also suggests that women renting for themselves may be an untapped market.

The 2005 Newsweek article below, "Luxe Rentals," states that: "most high-end traffic comes from vacation travelers or small-business owners who don't have to submit expense reports to a corporate travel manager. Folks who are used to driving Mercedeses in their real lives really don't want to be seen in the cookie-cutter sedans that fill most rental lots."

The 2003 Newsweek article below, "Sedan Begone," focuses on one person’s experience of becoming a luxury car renter for business and pleasure.


"What Would Steve McQueen Rent?"

New York Times June 4, 2005

EVER wonder what it would be like to see the face of eternity at 183 miles per hour on the West Side Highway? I sure did. So on a recent Thursday morning, I slipped into the cockpit of a red Ferrari 360 Modena I had rented from Gotham Dream Cars. Then I wheeled onto the highway at 59th Street, and put the pedal to the metal.

The first thing I heard was the apocalyptic thunder of the Ferrari's rear-mounted 400-horsepower V-8 engine. The first thing I felt was awe - and then absolute terror. The G-force of the Ferrari's acceleration slammed me back against my black leather bucket seat. My stomach leapt to my Adam's apple. The sky and the pavement flattened out into what looked like a solid curtain.

Then I glimpsed a shining, crescent-shaped tear in the curtain. All of a sudden, I realized that the face of eternity was grinning at me. I had just hurtled from 0 to 60 m.p.h. in less than five seconds. But I was barely over the posted speed limit, and still 123 m.p.h. short of the Ferrari's top speed.

That's when I gave silent thanks for three not-so-small favors. The first was that I hadn't blown out my breakfast. The second was that the Ferrari 360 Modena is blessed with some of the best brakes ever invented, combining a proportioning valve and an ABS system to prevent the wheels from locking up when decelerating. The third favor was that I had the presence of mind to use those fancy brakes.

As I slowed to 45 m.p.h. and exited at 96th Street, the sky, the pavement, and my stomach returned to their customary positions. As of this writing, my adrenaline rush continues unabated. ...

Unless you have a heart condition or a terminal case of the goody-two-shoes, you simply have to consider taking a spin in an exotic car. It is now possible to rent them for time periods ranging from five hours to five months or longer in more than 20 cities around the country. We're talking Ferraris, Lamborghinis, Bentleys, Porsches, Jaguars, Mercedeses, BMW's; the kind of wheels rich and famous people like Donald Trump, Ralph Lauren, Jay Leno, Jerry Seinfeld and Billy Joel drive, collect and occasionally crack up.

The reigning epicenter of the exotic-car rental market is Beverly Hills, but there are also exotic-car rental companies based in Miami, Las Vegas, Phoenix, Chicago, Washington, Denver, San Francisco, Dallas and Houston, as well as Manhattan.

"This is a niche market, but a growing market," said Neil Abrams, founder of a consulting group that covers the auto rental industry. "It only works in places where there are rich and famous people or those who would like to be rich and famous for a day. It doesn't work in a place like Toledo, Ohio."

The rates for driving like the rich and famous are surprisingly moderate given the retail prices of the products. At Gotham Dream Cars in Manhattan. for example, the charge for renting a Ferrari 360 Modena, which costs $168,000 with options, is $1,495 for 24 hours, and $995 for 12 hours (gothamdreamcars.com). At Dream Car Rentals in Las Vegas, you can rent a Ferrari for $750 for 24 hours or $500 for five hours at two locations on the Strip.

Virtually all exotic-car rental companies require customers to be over 25 years old, and to supply proof of liability insurance that can transfer from their private cars to the rental vehicles. Many also require credit card deposits that are double or triple the rental fee. (Gotham Dream Cars requires a credit card deposit of $10,000 for each rental regardless of the length of time of the rental.)

INTERESTINGLY enough, says Dan Coyle, a spokesman at Gotham, 70 percent of the people who call to rent exotic cars are women. Most of them rent cars as presents for husbands or male significant others, he added.

As Mr. Coyle noted, a Ferrari 360 Modena is not a routinely approved expense account vehicle. He said many men who rent exotic cars for business reasons prefer to remain anonymous so that no one will know their hot new rides are rental vehicles - particularly not the people they may be trying to impress. But according to Tammy Garay, a former vice president at J. P. Morgan Chase, the appeal of driving exotic cars is by no means limited to men. Ms. Garay, 26, recently won a charity auction bid for $550 to rent a Lamborghini Gallardo (top speed 193 m.p.h., price with options $184,000). She quit her job at the bank on a Friday, and drove the Lamborghini the following Tuesday.

"Just driving the Lamborghini, you feel so empowered," Ms. Garay said. "I was going down the New Jersey Turnpike with my sister, and I looked at her and said, 'Do you realize we're the sexiest women on the road?' "

Ms. Garay added that she was preparing to climb Mount Everest, but said she planned to market exotic cars to women upon her return. "They have no idea what they're missing," she said.

I got a close-up view of what I'd been missing when I tooled around the streets of the Upper East Side in the Ferrari 360 Modena, then in a silver-gray Bentley Continental GT. It was a sublime contest between flash and class, and the undisputed winner was yours truly.

With its sleek, low-slung chassis hunched only a few inches above the pavement, the Ferrari looks like the racecars that inspired its design. There is no clutch, and no stick. You change gears just like Formula One racecar drivers, by pulling back on a pair of paddles mounted behind the steering wheel. And you can't help but drive like a bat out of hell. The car has the acceleration of a Stinger missile, and it just wants to go all out all the time.

A red Ferrari is also the heavyweight champ of head turners. I caught the eyes of everyone from taxi drivers and construction workers to rabbis, nuns, waitresses and Wall Streeters. The only disapproving word came from a woman on Park Avenue, who sniffed, "I think it's too noisy." I replied without apology, 'That's why I like it."

If Park Avenuers ever decided to enter pimpmobile races, I'm certain their unanimous choice would be the Bentley Continental GT. With its elegantly understated curves and grille work, this Grand Touring sports car from a longtime luxury carmaker turned the heads of only the educated few who knew what they were looking at. And with a base sticker price of "only" $150,000, the Bentley seems like rather a good value, doesn't it, darling?

The four-seater I rented had a wood-trimmed "fireglow" red interior that fit like a custom suit. Though it lacked the gut-punching pickup of the Ferrari, it was quieter than a whispered assignation and smoother than a satin sheet as I slipped through the rowdy traffic on Park Avenue with utmost discretion.

As I turned the Bentley back onto the West Side Highway, I became enraptured by luxurious accoutrements like the surround-sound music system and the soothing massage feature inside the upholstery of my seat. Then a passenger pointed to the rapidly rising speedometer, and reminded that the Bentley was actually even faster and more powerful than the Ferrari, thanks to a front-mounted 550-horsepower twin-turbo W-12 engine able to produce a top speed of 198 m.p.h.

That's when I surveyed the expanse of sky and pavement stretching out toward the face of eternity and gave thanks for one more small favor - there were no police vehicles in sight.


Luxe Rentals

Linda Stern Newsweek 3/21/2005, Vol. 145, Issue 12

LUXURY-CAR RENTALS ARE BOOMING, but it's not because of big corporate travelers. Rental companies say most high-end traffic comes from vacation travelers or small-business owners who don't have to submit expense reports to a corporate travel manager. Folks who are used to driving Mercedeses in their real lives really don't want to be seen in the cookie-cutter sedans that fill most rental lots.

Hertz, which several years ago launched its Prestige Collection for this market, has increased the number of American cities it serves to 50, as well as adding locations in Europe. It also started renting models such as the Audi A8L and Infiniti FX35. Even if you're willing to spend more than $100 a day for a luxe rental, beware the insurance wrinkle: the car policy you've got at home is unlikely to cover that rental Ferrari 360 Modena.

As the luxury-rental market gets more specialized, boutique companies are competing with the national chains. You can find many of the boutiques at rentexoticcars.com. The flashiest models, like the Viper SRT-10, can be found only in the flashiest cities like Beverly Hills and Las Vegas. Flashy price, too: $600 a day.


Sedan Begone

Naughton, Keith, Crowley, Patrick Newsweek 12/1/2003, Vol. 142, Issue 22

Want to impress clients? Rental agencies now offer Lamborghinis and other fancy motorcars

When he's on the road selling banking software, Mark Oliver of Houston typically rents a Ford Taurus. But recently he took a ride on the wild side: he splurged on a 2004 Cadillac DeVille. He rationalized spending the $75 a day on the luxury car--almost twice the Taurus's price--because he was squiring around important banking clients. But after dropping them off, he cruised around Dallas, enjoying the Caddy's cushy leather seats and fiddling with its 101-channel satellite radio. "It's a great ride," he says. Now that he's spoiled, Oliver's eying a Volvo for his next business with clients.

Road warriors are driving golden chariots. With business travel finally showing signs of life, rental companies are attempting to jump-start the bottom line by offering dream cars for hire. The pitch: impress your clients by showing up for the meeting in a hot car. Instead of the usual bland-mobiles, business travelers can now pick from Jags, Land Rovers, T-birds and sports cars like the Nissan Z. Of course, riding in style doesn't come cheap. These wheels run $69 to $195 a day--a lot more than that $29.99 special on a Chevy Cavalier. Really exotic cars like a Lamborghini, available at the Driven Image national rental chain, run up to $2,800 a day.

Rental operators say business travelers like the upgrades. Once they see the rows of gleaming luxury cars as they step off the shuttle bus, the cars are hard to resist. "We're doing a lot of upselling at the counter," says Brian Kennedy, marketing chief for Hertz, which offers its Prestige Collection of luxury cars in 37 markets, nearly double the number of locations from two years ago. Adds William Lobeck, CEO of National's parent company, Vanguard Car Rental: "Higher-end models always get somebody's attention."

Even the outfits that rent cars to the stars for Hollywood galas are going after business types. Executives currently account for one in four rentals at Budget Rent a Car, Beverly Hills, which offers everything from a $350-a-day BMW 745iL to a $1,800-a-day Bentley Azure. "We're huge with business people," boasts Budget Beverly Hills president Ken Kerzner, who regularly scouts for high-rolling travelers on Wall Street and Madison Avenue. When-ever Manhattan chef Kerry Heffernan is in L.A., he'll spend up to $500 a day to rent a Mercedes to impress the valets as he checks out trends in Left Coast cuisine. "You need a gorgeous car in L.A.," says Heffernan, co-owner of 11 Madison Park restaurant. "People take you more seriously."

Commanding premium prices, though, can be a tough sell in these days of tight travel budgets. Companies often set strict limits on the vehicle size and day rate they'll allow. So to coax business travelers into the gilded coach, the big rent-al chains are discounting prices and giving free upgrades. Hertz, for example, just cut the day rate on a Volvo S80 from $90 to $75, if booked online before Dec. 15. And Avis's fleet of Cadillacs now comes with satellite radio at no charge.

The idea is, if a renter gives in to car lust once, he'll never go back. But too much discounting, and that fancy ride becomes just another set of cheap wheels on the rental lot. "There's a certain elitism in these cars, and you shouldn't dumb them down," warns Neil Abrams, who consults for major rental agencies.

Fears of going downscale have traditionally steered luxury carmakers away from the rental counter altogether. BMW and Mercedes still won't sell cars directly to U.S. rental companies, even though their models are for hire in Europe. (Budget Beverly Hills and other exotic rental outfits get around that ban by purchasing Bimmers and Benzes from independent car dealers.) But the stigma of the airport rental lot is mostly fading among the automotive elite. Catering to the business traveler, it seems, makes good business sense for all.