Cost of Ownership
For many individuals who become successful in their business, owning an exotic car is almost the success status. Some successful people will just purchase their dream car or maybe three if they’re feeling it. However, starting an exotic car rental company is not for the faint-hearted because there is a huge cost of ownership. Imagine not having one or three car payments but instead a fleet of 10 and above.
Not only do you need to be heavy in cash flow, but you also need to make sure that you can make the monthly payments of the cars. You need to know how to market the cars so that you can generate revenue consistently and find a good location.
Aside from the monthly investments in the vehicle, you need to make sure that you have enough to pay for repairs, maintenance, issues, and any other items that end up coming up. The reason why is that you should always consider Murphy’s Law, which is “anything bad I can’t they can’t happen will happen.”
Not to mention that you must detail the car before and after someone rents it so that way it’s always clean and kept in mint condition every time someone wants to take the car for a ride.
Professional exotic rental companies like Royalty Exotics pay a premium for business-grade automotive insurance if any accidents or damage happens. This gives them a layer of protection so that nothing comes out of pocket when something like this happens or at least very minimal.
This isn’t your typical car insurance that normal people would be getting for their cars, but it’s a necessity in this business.
You have to make sure you have car insurance for every single vehicle in your lot, and that not only protects you from when you’re driving and when someone else is in your car and crashes it.
Depreciation is natural in any sort of car business. We’ve all heard that when you drive a car off the lot, it automatically depreciates.
It works a little differently with exotic cars because they don’t depreciate as much as they keep a lot of value, but you still need to make sure that it’s kept in mint condition and that you’re not putting intense mileage on the cars.
Most exotic car companies need to make sure that you keep track of the mileage that way, you know exactly what the car is going to cost as soon as people start driving it so that way you can sell it and still make a decent profit.
That’s why it’s unheard of when someone like Houston from Royalty Exotics offers unlimited miles because they understand that when you put mileage on the car, the car starts depreciating. So it’s unheard of in Vegas and in the car rental space in general for an owner to do that. However, that’s one of the reasons why Houston is an innovator in this industry.