Starting New Driving Experience Company???
Discussion
So today at work I was thinking must be a better life than sitting in an office, working to save up money so I can retire and shortly after lose facilities and then die!!
So my plan, take savings and a loan and purchase say 10 cars up to £250k total, and start new company doing driving experience days in fast convoy (on fun roads), or even rental.
Experience would comprise: 1-2 hours introduction and 3 hours driving, approx. 15 minutes in each car.
What would you pay? Would this be something new and fun to try? Is it destined to failure due to crippling insurance and car maintenance costs.
Also what would be a great choice of 10 cars people would love to drive & why:
1. Lotus Elise
2. Lotus Exige v6
3. Porsche Boxster S
4. Porsche 911
5. BMW E39 M5
6. BMW E46 M3
7. Alfa V6 156 GTA
8. Honda Civic type R
9. Caterham
10. GR Yaris
I think it's a great idea and something I'd definitely be interested in at the right price.
Without wanting to be a party pooper though, I looked into the economics of running a hire company of interesting / fast cars some time ago myself. I concluded that the insurance was the limiting factor and it just would not be possible to do at a price that most people would reasonably pay for this, at a level of cover that would not leave me massively down if something bad were to happen (which let's face it will happen if open to all without any way of vetting customers beyond how many points on license, which let's be honest doesn't really tell you that much).
I wish you the very best of luck though and hope you find a way of making it work. For what it's worth I think somewhere in the region £500 per day for what you are describing would be a reasonable price point in my view (depending on insurance excess level, fuel, exactly how many hours, how well curated route is etc)
Without wanting to be a party pooper though, I looked into the economics of running a hire company of interesting / fast cars some time ago myself. I concluded that the insurance was the limiting factor and it just would not be possible to do at a price that most people would reasonably pay for this, at a level of cover that would not leave me massively down if something bad were to happen (which let's face it will happen if open to all without any way of vetting customers beyond how many points on license, which let's be honest doesn't really tell you that much).
I wish you the very best of luck though and hope you find a way of making it work. For what it's worth I think somewhere in the region £500 per day for what you are describing would be a reasonable price point in my view (depending on insurance excess level, fuel, exactly how many hours, how well curated route is etc)
I'd say you've got two things to consider.
Insurance (as you said) and Maintenance.
Insurance is easy, just call an insurer and ask what they would charge for insuring 10 cars with any driver. I'd have thought it would be astronomically expensive, but I'm not involved with this sort of thing so don't know.
Maintenance, you'll need to work out cost per mile, and amount of miles travelled on your routes.
Insulation from Price rises on things like fuel also need to be allowed for in this day and age.
Then stick a profit margin on that allows you to work 100 days a year and still make the same amount of money you make at work (because I'd have thought it will be more of a weekend based product)
Then come back to the thread and give us the price and see if anyone would pay it.
Seems a good idea, but maybe people would prefer to do it on a racetrack? Unless you live on the North Coast of Scotland, in which case you could make it a driving holiday experience.
Also I'm not a powerfully built director, nor do I have any experience of running a business of this nature. I'm in construction lol, but hope you found insignificant insight useful.
Insurance (as you said) and Maintenance.
Insurance is easy, just call an insurer and ask what they would charge for insuring 10 cars with any driver. I'd have thought it would be astronomically expensive, but I'm not involved with this sort of thing so don't know.
Maintenance, you'll need to work out cost per mile, and amount of miles travelled on your routes.
Insulation from Price rises on things like fuel also need to be allowed for in this day and age.
Then stick a profit margin on that allows you to work 100 days a year and still make the same amount of money you make at work (because I'd have thought it will be more of a weekend based product)
Then come back to the thread and give us the price and see if anyone would pay it.
Seems a good idea, but maybe people would prefer to do it on a racetrack? Unless you live on the North Coast of Scotland, in which case you could make it a driving holiday experience.
Also I'm not a powerfully built director, nor do I have any experience of running a business of this nature. I'm in construction lol, but hope you found insignificant insight useful.
HasToBeV8 said:
I think it's a great idea and something I'd definitely be interested in at the right price.
Without wanting to be a party pooper though, I looked into the economics of running a hire company of interesting / fast cars some time ago myself. I concluded that the insurance was the limiting factor and it just would not be possible to do at a price that most people would reasonably pay for this, at a level of cover that would not leave me massively down if something bad were to happen (which let's face it will happen if open to all without any way of vetting customers beyond how many points on license, which let's be honest doesn't really tell you that much).
I wish you the very best of luck though and hope you find a way of making it work. For what it's worth I think somewhere in the region £500 per day for what you are describing would be a reasonable price point in my view (depending on insurance excess level, fuel, exactly how many hours, how well curated route is etc)
To put some further colour, i was looking at roughly 10-15% of the vehicle value in annual premium with an excess of about the same amount. That was with drivers over 30, 5 year licence and no more than 3 points. Without wanting to be a party pooper though, I looked into the economics of running a hire company of interesting / fast cars some time ago myself. I concluded that the insurance was the limiting factor and it just would not be possible to do at a price that most people would reasonably pay for this, at a level of cover that would not leave me massively down if something bad were to happen (which let's face it will happen if open to all without any way of vetting customers beyond how many points on license, which let's be honest doesn't really tell you that much).
I wish you the very best of luck though and hope you find a way of making it work. For what it's worth I think somewhere in the region £500 per day for what you are describing would be a reasonable price point in my view (depending on insurance excess level, fuel, exactly how many hours, how well curated route is etc)
So assuming that roughly holds, you'd be paying roughly 4k per year per car, plus expecting customers to be comfortable with a 3-4k excess (or take some of that risk yourself).
I am no expert in such things but I suggest this doesn't just need car insurance cover, this needs specific public liability insurance and your liability here is quite serious.
i.e. if you are in the for-profit business of organising nominally sports car trips on the public road, and one of your customers kills or seriously injures someone in the course of this, i would think you're going to be deep in the s
t.
i.e. if you are in the for-profit business of organising nominally sports car trips on the public road, and one of your customers kills or seriously injures someone in the course of this, i would think you're going to be deep in the s
t.Edited by trashbat on Thursday 5th May 19:07
Agree with trying to enjoy your job, rather than waiting til you retire.
In terms of rental, this sort of thing exists in Japan, eg https://www.omoren.com/en/products/list?mode=&... have an RX-7, Silvia, S2000, R34 etc
It seems like they've expanded since I last looked, so I guess it's working for them there.
In terms of cars I'd go for a varied range of experiences, your list looks decent to me, perhaps add a C63 or similar with the 6.2, Ariel Atom, rotary, DC2, ie go for a diversity of experiences.
I'm not quite sure about the practicalities of doing driving experience days on the road. Do you need to corral a group of nine customers at the same time to make it work? Tricky getting exact number of people to commit and actually turn up together.
There's a likelihood of a wide range of driving talent and confidence, so you may find some people slowing the whole convoy down, others getting frustrated, some people feeling pressured to drive faster than they're comfortable with, etc. I think SSO wrote of the difficulties of driving fast cars in a group with a random selection of people.
A convoy of cars like that could be quite noticeable if driving fast, which could attract police attention that might compromise your business model (cf how the evo triangle has been increasingly policed).
You'll need to plan for people getting lost, deliberately deviating from the route to show a mate / drive a specific bit of road etc, crashing, getting busted speeding, cars breaking down, drivers breaking cars by eg mis-slotting a gear, etc. I think you'd need a second member of staff to be able to lead the group if one of you needs to attend to / stay with one customer.
Maintenance will be an issue especially if with older cars towards the bottom of their depreciation curve - not just the cost of repair but time out of action waiting for parts / specialist attention.
In terms of rental, this sort of thing exists in Japan, eg https://www.omoren.com/en/products/list?mode=&... have an RX-7, Silvia, S2000, R34 etc
It seems like they've expanded since I last looked, so I guess it's working for them there.
In terms of cars I'd go for a varied range of experiences, your list looks decent to me, perhaps add a C63 or similar with the 6.2, Ariel Atom, rotary, DC2, ie go for a diversity of experiences.
I'm not quite sure about the practicalities of doing driving experience days on the road. Do you need to corral a group of nine customers at the same time to make it work? Tricky getting exact number of people to commit and actually turn up together.
There's a likelihood of a wide range of driving talent and confidence, so you may find some people slowing the whole convoy down, others getting frustrated, some people feeling pressured to drive faster than they're comfortable with, etc. I think SSO wrote of the difficulties of driving fast cars in a group with a random selection of people.
A convoy of cars like that could be quite noticeable if driving fast, which could attract police attention that might compromise your business model (cf how the evo triangle has been increasingly policed).
You'll need to plan for people getting lost, deliberately deviating from the route to show a mate / drive a specific bit of road etc, crashing, getting busted speeding, cars breaking down, drivers breaking cars by eg mis-slotting a gear, etc. I think you'd need a second member of staff to be able to lead the group if one of you needs to attend to / stay with one customer.
Maintenance will be an issue especially if with older cars towards the bottom of their depreciation curve - not just the cost of repair but time out of action waiting for parts / specialist attention.
I'm in the insurance game but not motorsport.
My opinion is that you would struggle to find an insurer to take on the risk.
Let's go worst case scenario.
Drivers in convoy, overtaking goes wrong, multiple vehicles involved in a smash with personal injury.
If you do decide to go ahead have a conversation with a really good motor broker.
Pace Ward - Jeremy is a big petrolhead
InsuranceJon on here is due back in the game, get his thoughts.
My opinion is that you would struggle to find an insurer to take on the risk.
Let's go worst case scenario.
Drivers in convoy, overtaking goes wrong, multiple vehicles involved in a smash with personal injury.
If you do decide to go ahead have a conversation with a really good motor broker.
Pace Ward - Jeremy is a big petrolhead
InsuranceJon on here is due back in the game, get his thoughts.
It could work very well and potentially earn some nice margins.
Just not in the UK.
For six years I worked on a project in the northern part of Cyprus and got to know a few of the locals quite well, including the chap who owned the hotel I stayed in who was your typical Turkish Cypriot 'trader', always up for a deal and a bit of car dude. He and I mulled over setting up Caterham Tours. Tourists rent one of a fleet of Caterhams (or similar) and have a 'spirited' guided tour with others.
Miles of truly great roads on which hardly anyone drives that are sparsely Policed, if at all and if they are the Police don't really do much. Great scenery, weather.... in fun cars.
The problem there was the inverse of the problems in the UK. Whilst bureaucracy, insurance, crowded roads, etc pose less of a barrier to entry, the issue is getting the cars into the country and having sufficient capacity to maintain them, fix them and replace parts.
If you can find a way to solve that, then there is where it will work!
Just not in the UK.
For six years I worked on a project in the northern part of Cyprus and got to know a few of the locals quite well, including the chap who owned the hotel I stayed in who was your typical Turkish Cypriot 'trader', always up for a deal and a bit of car dude. He and I mulled over setting up Caterham Tours. Tourists rent one of a fleet of Caterhams (or similar) and have a 'spirited' guided tour with others.
Miles of truly great roads on which hardly anyone drives that are sparsely Policed, if at all and if they are the Police don't really do much. Great scenery, weather.... in fun cars.
The problem there was the inverse of the problems in the UK. Whilst bureaucracy, insurance, crowded roads, etc pose less of a barrier to entry, the issue is getting the cars into the country and having sufficient capacity to maintain them, fix them and replace parts.
If you can find a way to solve that, then there is where it will work!
British Beef said:
Experience would comprise: 1-2 hours introduction and 3 hours driving, approx. 15 minutes in each car.
15 mins driving each? Aside from the practicalities of where to do them with 10 vehicles, the constant changeovers would be irritating and 15 mins doesn’t really give any time to get to know a car. Unless you have something really interesting to cover, an introduction of up to 2hrs sounds very long too. Bigger concern would be that a group of 10 is very large. The more there are the greater the chance that one of them will be an idiot… this risk would be a turn off for some but, irrespective of this, you need to figure out how you’d deal with someone you needed to stop driving over an hour from where you started.
RSR Nurburg do this. Have a look at there web site.
It’s something I intend to get round to. But then the roads, scenery etc there are spectacular.
It might work in parts of this country - north Wales for instance where the roads are fab and lightly trafficked.
As mentioned, I expect insurance will be a mare! Could customer’s not arrange their own one day insurance?
It’s something I intend to get round to. But then the roads, scenery etc there are spectacular.
It might work in parts of this country - north Wales for instance where the roads are fab and lightly trafficked.
As mentioned, I expect insurance will be a mare! Could customer’s not arrange their own one day insurance?
As a petrol head potential customer, I just can’t see this being workable, for all of the reasons already outlined.
Couple of others:
- so many family hacks are now well handling and fast, the allure of the cars you have described isn’t great anymore. And especially on public road speed limits. Even less so compared to the acceleration of some electric cars.
- whether we like it or not, just like smoking and drinking in the street, groups of ICE cars ragging around the country will soon be, if not already, considered antisocial and some folk may even be asking how are you offsetting your carbon footprint.
I think the future of fun with an ICE car is on the track.
Couple of others:
- so many family hacks are now well handling and fast, the allure of the cars you have described isn’t great anymore. And especially on public road speed limits. Even less so compared to the acceleration of some electric cars.
- whether we like it or not, just like smoking and drinking in the street, groups of ICE cars ragging around the country will soon be, if not already, considered antisocial and some folk may even be asking how are you offsetting your carbon footprint.
I think the future of fun with an ICE car is on the track.
I have done similar. Track only. It was not a money maker tbh. It just got me free track time. (and a lot of stress)
I only had 2 cars but here are the issues:
Customers, not turning up, not knowing how to drive, not being able to get in / out of car, not being in any way "switched on".
Crashes.(they happen a lot more than you might think - I had 2 minor and 1 major in the couple of years I was doing it)
Mechanical problems. (see above)
Prep time. It takes a lot longer to prep the cars and I only had 2.
(edit to add in, logistics, storage, admin staff, instructors, fuel, consumables, etc etc etc)
Legislation is also an issue. All the "instructors" at the Porsche Experience Centre at Silverstone had to become ADIs. Their insurance company deemed that by taking cars on the road and giving people "instruction" regardless of how minor that might be they would need to be approved driving instructors. It cost them a fortune. ( this was 2015 ish so not sure if its changed)
Secondly, any kind of convoy driving you would have to be very careful that you dont get caught by needing permission to operate on the highway. I.e road rally type regulations. Your insurance company will be way, way, way up your behind about this. I have arranged a few events over the years. (again a while ago but you will need to look into this)
I only had 2 cars but here are the issues:
Customers, not turning up, not knowing how to drive, not being able to get in / out of car, not being in any way "switched on".
Crashes.(they happen a lot more than you might think - I had 2 minor and 1 major in the couple of years I was doing it)
Mechanical problems. (see above)
Prep time. It takes a lot longer to prep the cars and I only had 2.
(edit to add in, logistics, storage, admin staff, instructors, fuel, consumables, etc etc etc)
Legislation is also an issue. All the "instructors" at the Porsche Experience Centre at Silverstone had to become ADIs. Their insurance company deemed that by taking cars on the road and giving people "instruction" regardless of how minor that might be they would need to be approved driving instructors. It cost them a fortune. ( this was 2015 ish so not sure if its changed)
Secondly, any kind of convoy driving you would have to be very careful that you dont get caught by needing permission to operate on the highway. I.e road rally type regulations. Your insurance company will be way, way, way up your behind about this. I have arranged a few events over the years. (again a while ago but you will need to look into this)
Edited by gotoPzero on Friday 6th May 09:50
Looking at this again, your estimation of start up costs are quite a bit off.
On top of the cars, you need to factor in premises, marketing, staff, basic operational overheads, loan interest, etc. Add in insurance, maintenance, etc, your Y1 cost is going to be not far short of £0.5m.
So each car owes you £500k.
There's 260 working days a year, give or take. There's no way you'd rent each car out for each of these days. I'd say 100 days is more likely. And you can't rent each car each day, you'd need to keep one or two back in case on breaks down the morning a customer is due too arrive for his birthday treat.
So one car rented out for 100 days will bring in £50k. Times that by 8, that's £400k revenue a year..... or over 12 years before you break even.
These are only fag-packet calculations and don't take into account a lot of things but as you can see, it's exceptionally high risk.
On top of the cars, you need to factor in premises, marketing, staff, basic operational overheads, loan interest, etc. Add in insurance, maintenance, etc, your Y1 cost is going to be not far short of £0.5m.
So each car owes you £500k.
There's 260 working days a year, give or take. There's no way you'd rent each car out for each of these days. I'd say 100 days is more likely. And you can't rent each car each day, you'd need to keep one or two back in case on breaks down the morning a customer is due too arrive for his birthday treat.
So one car rented out for 100 days will bring in £50k. Times that by 8, that's £400k revenue a year..... or over 12 years before you break even.
These are only fag-packet calculations and don't take into account a lot of things but as you can see, it's exceptionally high risk.
British Beef said:
So today at work I was thinking must be a better life than sitting in an office, working to save up money so I can retire and shortly after lose facilities and then die!!
So my plan, take savings and a loan and purchase say 10 cars up to £250k total, and start new company doing driving experience days in fast convoy (on fun roads), or even rental.
Experience would comprise: 1-2 hours introduction and 3 hours driving, approx. 15 minutes in each car.
What would you pay? Would this be something new and fun to try? Is it destined to failure due to crippling insurance and car maintenance costs.
Also what would be a great choice of 10 cars people would love to drive & why:
1. Lotus Elise
2. Lotus Exige v6
3. Porsche Boxster S
4. Porsche 911
5. BMW E39 M5
6. BMW E46 M3
7. Alfa V6 156 GTA
8. Honda Civic type R
9. Caterham
10. GR Yaris
Nice idea but problems as I see it:So my plan, take savings and a loan and purchase say 10 cars up to £250k total, and start new company doing driving experience days in fast convoy (on fun roads), or even rental.
Experience would comprise: 1-2 hours introduction and 3 hours driving, approx. 15 minutes in each car.
What would you pay? Would this be something new and fun to try? Is it destined to failure due to crippling insurance and car maintenance costs.
Also what would be a great choice of 10 cars people would love to drive & why:
1. Lotus Elise
2. Lotus Exige v6
3. Porsche Boxster S
4. Porsche 911
5. BMW E39 M5
6. BMW E46 M3
7. Alfa V6 156 GTA
8. Honda Civic type R
9. Caterham
10. GR Yaris
1. Insurance will be expensive. You're on the road, not a track, people will be giving it beans, accidents will happen.
2. Negative PR when something happens. I can see it now "Boy-racer rental company who let's maniacs on the loose in high performance cars, racing each other"
3. Cars will get damaged and will turn out ratty-looking.
4. Surprisingly limited market. Everyone knows a Ferrari, everyone knows a Lamborghini, so even the most casual petrol-head will enjoy an experience in one or a relative will buy an experience for them. For the casual petrol-head, a day including a Toyota Yaris and a couple of old BMWs will not appeal.
If you're going to look into it further, I would halve the number of cars but make them more special and different. i.e the 911, a Caterham, Audi R8, maybe a classic like a Mustang & something else.
But, I think that taking this experience on the road will be it's deathknell. You will not be able to control Jason from East London and his mates on a stag do who are going to cane the nuts off your cars, behave like idiots and attract very unwanted attention.
At least on a track, that behaviour is private and in a controlled space where they can't kill any passer-bys.
Surely, just your "cool hire cars" would be the route? Then they can be hired for a week, a day, holidays, weddings etc...?
Or a car club, so people get "x" points per year, and then can use these to use the cars?
Maybe I'm just odd, but driving in convoy isn't that much fun - I'd rather have a destination and everyone get there at their own pace.
Or a car club, so people get "x" points per year, and then can use these to use the cars?
Maybe I'm just odd, but driving in convoy isn't that much fun - I'd rather have a destination and everyone get there at their own pace.
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