Interesting proposition to split for GT-R...what would you do?
Lexus Test Driver
Joined: Feb 2006
Posts: 1,388
Likes: 9
From: Michigan
Heck I think the most common example of something like is going into business with a friend or family member together. Very risky stuff. I make it a habit never to go into business with friends or family.
Out of Warranty
Joined: Aug 2001
Posts: 14,925
Likes: 13
From: Houston, Republic of Texas
What you are talking about here is "fractional ownership", and it's commonly used to "share" ownership of expensive private aircraft, yachts, cars, and even real-estate. Think "time-share condo" here. It's the way individuals can share the cost of an expensive asset they won't use every day or perhaps every week.
http://en.wikipedia.org/wiki/Fractional_ownership
As most have said, you probably don't want to get into a FO program with a friend, but if you do, don't just but both names on the title and pay half each. That's the road to disaster. I cosigned on a car for a former business partner and ended up making almost all the payments, including insurance and repair. I was supremely stupid.
If I were going to get into a "sharing" situation with a friend, I'd opt for a formal fractional ownership program, where the "corporation's" shareholders (the two of you) pay an outside party, for example a broker, to hold the title to the car and ensure that maintenance, tax, insurance, and repair costs are pre-paid by the shareholders to the "corporation" who will deal with the dealer, insurance broker, and repair shop to get the individual shareholders out of the picture and avoid arguments.
After setting up your fractional ownership plan and its management, you will need to come to some agreement on what you will spend, exactly what you will buy, and how long you intend to keep it. Next, you will need to agree on a schedule on which the car will be available to each shareholder, and some basics like where it will be stored (third party facility recommended) and that it will be turned in after use clean and with a full tank of gas. Some fractional ownership clubs may provide these services for a price.
Entertain the idea of your broker "renting" your car during times that the shareholders are not using it. This will help offset the ownership costs, and may even pay back a portion of the purchase price, but it will likely raise insurance and repair costs. It's worth a look.
Finally, you need to arrange an exit strategy. Will you keep the car for three years then trade it, or will you split the proceeds of the sale among the shareholders, with a final payment for the holder of the FO agreement? Should one of the shareholders move away or otherwise wish to free himself of the agreement before it expires, what will be his responsibilities? Sell his share for a percentage of retail value? Pay off his remaining interest in the vehicle to the agreement holder and be reimbursed (less sales commission) when the share is re-sold?
When all the details have been finalized, have your respective attorneys review the agreement to be certain it is enforceable. Agree to some mediation process in the event of conflict to avoid winding your relationship up in court.
It's not simple, but there are brokerages that do these kind of fractional ownership agreements all the time.
http://en.wikipedia.org/wiki/Fractional_ownership
As most have said, you probably don't want to get into a FO program with a friend, but if you do, don't just but both names on the title and pay half each. That's the road to disaster. I cosigned on a car for a former business partner and ended up making almost all the payments, including insurance and repair. I was supremely stupid.
If I were going to get into a "sharing" situation with a friend, I'd opt for a formal fractional ownership program, where the "corporation's" shareholders (the two of you) pay an outside party, for example a broker, to hold the title to the car and ensure that maintenance, tax, insurance, and repair costs are pre-paid by the shareholders to the "corporation" who will deal with the dealer, insurance broker, and repair shop to get the individual shareholders out of the picture and avoid arguments.
After setting up your fractional ownership plan and its management, you will need to come to some agreement on what you will spend, exactly what you will buy, and how long you intend to keep it. Next, you will need to agree on a schedule on which the car will be available to each shareholder, and some basics like where it will be stored (third party facility recommended) and that it will be turned in after use clean and with a full tank of gas. Some fractional ownership clubs may provide these services for a price.
Entertain the idea of your broker "renting" your car during times that the shareholders are not using it. This will help offset the ownership costs, and may even pay back a portion of the purchase price, but it will likely raise insurance and repair costs. It's worth a look.
Finally, you need to arrange an exit strategy. Will you keep the car for three years then trade it, or will you split the proceeds of the sale among the shareholders, with a final payment for the holder of the FO agreement? Should one of the shareholders move away or otherwise wish to free himself of the agreement before it expires, what will be his responsibilities? Sell his share for a percentage of retail value? Pay off his remaining interest in the vehicle to the agreement holder and be reimbursed (less sales commission) when the share is re-sold?
When all the details have been finalized, have your respective attorneys review the agreement to be certain it is enforceable. Agree to some mediation process in the event of conflict to avoid winding your relationship up in court.
It's not simple, but there are brokerages that do these kind of fractional ownership agreements all the time.
Thread Starter
Lexus Test Driver
Joined: May 2005
Posts: 1,508
Likes: 0
From: IL
What you are talking about here is "fractional ownership", and it's commonly used to "share" ownership of expensive private aircraft, yachts, cars, and even real-estate. Think "time-share condo" here. It's the way individuals can share the cost of an expensive asset they won't use every day or perhaps every week.
http://en.wikipedia.org/wiki/Fractional_ownership
As most have said, you probably don't want to get into a FO program with a friend, but if you do, don't just but both names on the title and pay half each. That's the road to disaster. I cosigned on a car for a former business partner and ended up making almost all the payments, including insurance and repair. I was supremely stupid.
If I were going to get into a "sharing" situation with a friend, I'd opt for a formal fractional ownership program, where the "corporation's" shareholders (the two of you) pay an outside party, for example a broker, to hold the title to the car and ensure that maintenance, tax, insurance, and repair costs are pre-paid by the shareholders to the "corporation" who will deal with the dealer, insurance broker, and repair shop to get the individual shareholders out of the picture and avoid arguments.
After setting up your fractional ownership plan and its management, you will need to come to some agreement on what you will spend, exactly what you will buy, and how long you intend to keep it. Next, you will need to agree on a schedule on which the car will be available to each shareholder, and some basics like where it will be stored (third party facility recommended) and that it will be turned in after use clean and with a full tank of gas. Some fractional ownership clubs may provide these services for a price.
Entertain the idea of your broker "renting" your car during times that the shareholders are not using it. This will help offset the ownership costs, and may even pay back a portion of the purchase price, but it will likely raise insurance and repair costs. It's worth a look.
Finally, you need to arrange an exit strategy. Will you keep the car for three years then trade it, or will you split the proceeds of the sale among the shareholders, with a final payment for the holder of the FO agreement? Should one of the shareholders move away or otherwise wish to free himself of the agreement before it expires, what will be his responsibilities? Sell his share for a percentage of retail value? Pay off his remaining interest in the vehicle to the agreement holder and be reimbursed (less sales commission) when the share is re-sold?
When all the details have been finalized, have your respective attorneys review the agreement to be certain it is enforceable. Agree to some mediation process in the event of conflict to avoid winding your relationship up in court.
It's not simple, but there are brokerages that do these kind of fractional ownership agreements all the time.
http://en.wikipedia.org/wiki/Fractional_ownership
As most have said, you probably don't want to get into a FO program with a friend, but if you do, don't just but both names on the title and pay half each. That's the road to disaster. I cosigned on a car for a former business partner and ended up making almost all the payments, including insurance and repair. I was supremely stupid.
If I were going to get into a "sharing" situation with a friend, I'd opt for a formal fractional ownership program, where the "corporation's" shareholders (the two of you) pay an outside party, for example a broker, to hold the title to the car and ensure that maintenance, tax, insurance, and repair costs are pre-paid by the shareholders to the "corporation" who will deal with the dealer, insurance broker, and repair shop to get the individual shareholders out of the picture and avoid arguments.
After setting up your fractional ownership plan and its management, you will need to come to some agreement on what you will spend, exactly what you will buy, and how long you intend to keep it. Next, you will need to agree on a schedule on which the car will be available to each shareholder, and some basics like where it will be stored (third party facility recommended) and that it will be turned in after use clean and with a full tank of gas. Some fractional ownership clubs may provide these services for a price.
Entertain the idea of your broker "renting" your car during times that the shareholders are not using it. This will help offset the ownership costs, and may even pay back a portion of the purchase price, but it will likely raise insurance and repair costs. It's worth a look.
Finally, you need to arrange an exit strategy. Will you keep the car for three years then trade it, or will you split the proceeds of the sale among the shareholders, with a final payment for the holder of the FO agreement? Should one of the shareholders move away or otherwise wish to free himself of the agreement before it expires, what will be his responsibilities? Sell his share for a percentage of retail value? Pay off his remaining interest in the vehicle to the agreement holder and be reimbursed (less sales commission) when the share is re-sold?
When all the details have been finalized, have your respective attorneys review the agreement to be certain it is enforceable. Agree to some mediation process in the event of conflict to avoid winding your relationship up in court.
It's not simple, but there are brokerages that do these kind of fractional ownership agreements all the time.
Wow that seems very complicated!
Update: my friend and I decided to look into this again maybe 4-5 years from now when we have more money up front as a down payment and we decided to cap it at $35k. We discussed the risks: accidents, spilled coffee, maintenance, buy out in case one of us wants to sell, etc. Idk why, but I am still open to trying this atleast once in my life. The car would be a garage queen and we would alternate weekends.
Perhaps I'll shoot for the NSX on my own, then have a C6 Z06 "timeshare" on the side in the future.
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