Fleet management: supercars (aka a new clutch will cost you £4k)

Unusual cars bring with them unusual priorities for those that look after them. Customers won’t be impressed if the fleet is bought on a budget.

“Whatever the members want is what they’re going to get, because the important thing is to keep the members happy,” says Gary Franklin, managing director of Group20, an offshoot of leasing company Vehicle Options and the latest supercar club to spring up in the UK. “We want the best, and hang the cost.”

Group20 launched in March and currently runs a fleet of 12 cars from its base in Rochester, Kent. A small fleet maybe, but worth a total of £1.7 million and boasting an ultra-rare Pagani Zonda F Clubsport Roadster as its centrepiece.

Mr Franklin says the make-up of the fleet was almost exclusively decided by what the paying punters would want – that’s how he justifies paying £585,000 for the Zonda, one of only 25 in the world and powered by a 650bhp 7.3-litre V12 made by Mercedes-Benz’s tuning arm, AMG.

“We chose the Zonda because of appearance,” Mr Franklin says. “It’s nice to have the German mechanics and a two-year warranty from Mercedes, but mostly the question was ‘is this the car that members will want more than anything else in the world?’. I can’t think of anything more desirable.”

Michael Breen, CEO of the UK’s first superclub, P1, agrees that the customer is king when it comes to choosing new cars.

“The customer wanting it is the overriding factor,” he says.

P1 makes it a priority to have the latest models from the major prestige marques, but that’s not the final list.

“We’ve had some interesting low- volume cars come in like an AC Cobra and some Nobles,” Breen says. “But we do have some practical cars too. Our average customer is 42 and could have a young family, so we have cars like the Bentley, the Porsche Cayenne Turbo and the Audi RS4 Avant.”

Even with the (usually wealthy) customers dictating what vehicles come in, business sense has to play its part, with the more familiar fleet considerations like running costs and residual values. Both clubs sell themselves partly on the depreciation savings that can be had by joining rather than by buying a supercar, but still have to take the hits themselves.

“In a few cases, we have to think about practicalities and reliability” says Mr Breen.

“For example, early Aston Martin Vanquishes and early Lamborghini Murcielagos had huge technical problems, and the Ferrari F430 had cracks develop in the exhaust manifold after 5,000 miles. The most popular cars are doing 3,000 miles a month and we need them on the road and running.

“As a result of such experiences, there have been a few cars that we’ve held back from buying. Lamborghinis are one example. With the new Murcielago LP640, we’re almost certain that the prices will soften quickly, given previous experience. We will upgrade our existing Murcielago eventually but there are certain marques that aren’t strong residually. Maserati is another example – we didn’t have the Quattroporte for a while and the Ferrari 612 Scaglietti suffered terrible depreciation. It has to be commercially viable.”

Franklin believes that having a balance of cars helps with the economy of running such a fleet – Porsche’s generally rock-solid residuals help make up for astounding depreciation in cars such as the Lamborghini Gallardo, which can lose as much as £42,000 in its first year.

“We do consider residual values, but it’s not the overriding consideration,” he says. “The BMW M6 and the Mercedes-Benz SL55 have good RVs and they don’t break the bank when they go to a dealer. But that doesn’t mean we’re going to flood the showrooms with cars like that. This business is not about common sense.”

Generally, supercar clubs strike up good relationships with manufacturers and prestige dealers – most of the cars they buy are either new or have very low mileage.

With around seven years’ worth of supercar receipts in its filing cabinets, P1 has a considerable reputation with those selling. Its contacts are so good that its Ferrari 599 arrived before the press cars.

“We get cars early because we’ve built up great relationships,” Michael Breen says. “We’re running about 10 different Porsches, 10 or 12 Ferraris and Maseratis and so on. We’re probably the biggest single buyer of performance cars in Europe. We change the cars every year at least so we’re a very good bet for them.”

Most of P1’s fleet is kept pretty up to date – the oldest cars are Ferrari 360s dating back to the late 90s. Generally, cars are sold on when they reach 25,000 miles.

With such an impressive array of metal, all servicing is left to the experts – only the valeting and elementary checks are done in-house.

“All we do are the basics here, making sure the cars are clean, safe and roadworthy,” says Mr Franklin. “We check tyre pressures and fluid levels but any work is done by dealers.”

For those used to dealing with servicing and maintaining Fords and Vauxhalls, the costs involved in keeping supercars running can be frightening. Gary Franklin says a new clutch for the Lamborghini Gallardo is £4,000 and a new set of tyres £1,200. The 20,000-mile service is £1,300, but that’s peanuts compared to the Ferrari F430 which is £2,158 for the service. However, tyres cost £1,000.

Michael Breen says P1’s F430 cost £14,798 to service during 2006. However, the average servicing cost for the Porsche 997 Turbo was a mere £351. King of the costs at P1 is the Lamborghini Murcielago.

The servicing costs alone in 2006 were a staggering £37,391. Add to that the 30% of list price lost in depreciation in the first year – it’s enough to cause heart attacks for accountants everywhere. A clutch for the Lambo is £6,000 plus fitting, while a new bonnet badge is £392.

So the next time one of your drivers dings a front wing, think yourself lucky.

Fleet managers will be well aware of the feeling of dread that can accompany the handing over of keys to a car’s new owner.

Now imagine handing them the keys to a car that cost hundreds of thousands of pounds with 600bhp. How do you ensure that one of your company’s most valuable assets doesn’t end up wrapped around a lamppost?

Simple – you vet those that want to get behind the wheel. Group20 tracks down potential members via a network of franchisees and is very selective. It wants to convey a particular image and so targets those high up in business, usually with supercar ownership experience.

“Just because they’ve got a cheque book doesn’t mean they’re getting in,” Gary Franklin says. “We’re spending £7 million on cars so we don’t want just anyone. Our running costs and SMR should be more manageable because the members are selected because of their past experience with supercars and their attitudes. They’re unlikely to be a liability.”

P1 also investigates applicants’ driving history and whether they have owned similar cars before, as well as looking at their insurance history for the past five years.

They also have to undergo a day’s driver training with former British Touring Car champion Robb Gravett’s Ultimate Car Control firm before their membership is confirmed.

“We get a sense of what they’re like and that they’ll treat the cars well,” Mr Breen says. “We have had one or two people that we’ve had to tell they are unable to join because they couldn’t pick up the right understanding of how the cars work.”

Group20 also uses Ultimate Car Control training, which is strongly advised for the more powerful cars and compulsory for those wanting to take the Zonda.

“The most important thing is to make sure that they are safe,” Mr Franklin says.

“These are extreme cars. The majority of drivers, despite what they might think, could never safely explore the full potential of these cars.

“For the majority of people the driver training is regarded as enjoyable. I don’t want people to be frightened by these cars but nor do I want to think that because they can do 235mph that they should drive that fast. We don’t want to hand something over to people if they’re going to lose it when they leave the car park. These cars in the wrong hands can be a disaster.”

With so many drivers and such expensive metal, getting the right insurance is a big priority. And it’s not cheap.

“To personally insure the Zonda could cost £45,000 a year,” says Gary Franklin.

“We’ve got a policy that will cover all members, all risks, fully comprehensively. Obviously, it’s extremely expensive – nearly £100,000 for the first 12 cars.”

P1 puts all 250 members as named drivers on its policy.

“There’s an excess on the policy of 5% of the value of the car, which is between £2,500 and £10,000,” says Michael Breen.

“If they scrape a wheel or someone hits them in a car park we charge them cost, about £50 for a wheel.”

Members can also buy a collision damage waiver for £495, which can be used once during the year – usually when driving the more expensive cars.

Track use is not allowed at either club and, although foreign travel is permitted, visits to the Nurburgring are not.

Supercar costs