"Some of these cars [drop] like a rock," he says. "A brand new Aston Martin Vanquish was $240,000 in 2003. We bought it for $140,000 in 2006; now it is worth $90,000. A Ferrari 430 Spider in six months can go from $330,000 to $240,000."
Eaton, however, warns that fractional car clubs are a relatively new phenomenon, so caution should be exercised.
"Cars owned by a car club are new only once, and the costs of membership may go up later," Eaton warns. "You are getting into something fairly new in fractional clubs, so the business may not be viable. If you want total access you won't get it with a club membership since someone else may want the make and model that you want at the same time."
On the other hand, he says, "A high-end car requires a lot of time to maintain if you own it and finding someone to maintain it here in the Midwest can be a problem."
Tax considerations also need to be taken into account when buying a high-end car. Half-million-dollar car purchases usually need financing, and all of the interest is frequently not deductible. The cost cannot be written off as a business expense unless the car is used legitimately for business purposes.
"Every state's tax regulations are different for personal and sales taxes, so we would weigh the differences for the client," Eaton advises. "But you have to consider how long you may keep the car and how much you will use it if you are considering buying. Leasing might be another option, depending on tax considerations and cost."
Mitchell Katz, president and CEO of Premier Financial Services, based in Woodbury, Conn., has made a profession of providing some of those other options. Premier, an independent finance company, offers lease-to-own and simple leases on new, vintage and exotic cars valued from $25,000 to more than $1 million.
Katz, also a car enthusiast, developed a simple lease that allows clients to either own their selected car at the end of the lease or turn it in for a different or newer model at any time without penalties or paperwork.
"Our program is tailor-made for investors or hobbyists who want to upgrade their collections periodically," Katz says. He has grown Premier Financial Services from a $7 million business less than a decade ago to a $100 million business today.
"Our simple lease gives drivers the ability to get in and out of a lease easily. It means less out of pocket money and we are probably the only company that amortizes the value of the car over the life of the lease. Taxes can vary depending on what state the car is garaged in, but there can be business write-offs if you entertain clients or use the car for advertising.