WOODBURY, Conn.–Not too many credit unions have auto loans for Ferraris and McLarens in their portfolios, but a lender that specializes in exotic cars is reporting strong appreciation in the market segment.
Premier Financial Services (PFS), a provider of specialty financing and operating leases for exotic, vintage and highline motorcars, said overall demand and average price for such vehicles have continued to increase since 2012. Over that five-year period, Ferraris, Porsches, McLarens, Aston Martins and Lamborghinis have continued as the most popular marques in the PFS portfolio of leased vehicles that represent in excess of $100 million in annual financing, the company said.
While the individual price tags for many of PFS's leased vehicles are well over $1 million, the average vehicle sale price since 2013 was nearly $228,000, representing a more than 19% increase over the prior five-year period's average sale price of $191,000, according to PFS. Over the 10-year period since 2008, owners financed approximately 80% of their leased vehicle's value.
PFS said it's the ability to lease expensive vehicles that has "put dreams in driveways" for many individuals who choose not to purchase their vehicles outright.
"Increasingly, we're seeing automobile enthusiasts and collectors from all age categories – from Millennials and Gen X-ers to Baby Boomers – who are unwilling to wait for retirement or to win the lottery before they can acquire the car of their dreams,” said CEO Mitchell Katz. “Although the number of high net worth and ultra high net worth individuals is growing, the increased demand for exotic vehicles is due in large measure to flexible leasing arrangements that make them accessible immediately."
PFS said it estimates that as many as 25% of all new and pre-owned contemporary vehicles are leased.
Katz also noted that the majority of exotic and vintage cars owners want to change vehicles every two or three years. In fact, nearly 70% of PFS's leases terminate within 36 months on a 60-month lease. "That's another reason why leasing continues to fuel the growth of the high-end car industry,” said Katz. “Flexible leasing terms can accommodate their desire to try something new or different on a frequent basis. Automobile enthusiasts have an insatiable appetite for fine cars."