Karen DeMasters is a contributing editor of Private Wealth magazine.
For people who desire a dream car-or two or three-there are a number of ways to attain that goal simply and easily.
The obvious option is to buy the car, which is what many wealthy people do and what many advisors would recommend. But for those who may want to change cars often, and not have to deal with ownership responsibilities and a depreciating asset, there are alternatives.
A relatively new solution is to join a fractional automobile club that, like a vacation home time-share, gives members rights to a number of cars on a part-time basis. A variety of leasing options can also make driving in style easier and free of worry, according to dealers.
For those on the East Coast-from Boston to Washington, D.C., and from Orlando, Fla., to the Keys-Gotham Dream Cars of New York and South Florida offers rental and time-share plans on a fleet of sports and luxury cars. Noah Lehmann-Haupt, a 30-year-old entrepreneur who has a background in technology and finance and a love of fine automobiles, founded the company in 2004.
"We looked for a trustworthy place to rent a super car in the northeast-a real super car-and found none worth a phone call," Lehmann-Haupt says. He opened Gotham Dream Cars in New York City, expanded to Florida in 2006 and recently started a time-share/fractional program called the DreamShare Membership Club.
"Why buy a $2 million car collection when you cwan access ours for a fraction of the cost?" he asks.
DreamShare has a $3.5 million collection of more than 20 vehicles and Lehmann-Haupt has plans to add more, including a Rolls-Royce Phantom, a Mercedes-Benz SLR McLaren and a Ferrari 599 GTB Fiorano. The firm buys and services the cars and does not act as a middleman for car dealers.
Time-share/fractional car ownership plans typically charge an annual fee for a block of points that can be redeemed for a certain number of driving days. The few companies that offer them usually offer various levels of membership. At Gotham, for example, a Diamond membership costs $49,000 a year for about 80 driving days, Elite membership costs $28,000 annually for about 40 days of driving and Titanium costs $18,000 for about 24 driving days.
The ultra-wealthy need to think carefully about the high-end car market, whether it be a purchase or lease, experts say.
"This is definitely a luxury, even for the very wealthy," says Ken Eaton, a principal at Stepp and Rothwell Inc., a financial planning and investment management firm in Overland Park, Kan. The firm caters to high-net-worth individuals in the Kansas City area and provides concierge services that can include buying a car or negotiating a mortgage on behalf of a client.