• U.S.

The Leasing Life

8 minute read
Alice Park

If it’s true that you can judge how successful someone is by the car he drives, then Richard Thorne is doing very, very well. Most of the time, for quick trips to meet clients in Philadelphia or Boston, the New York City–based publisher makes the drive in his turbo Porsche. When he wants to impress, as he did last summer when he and his wife attended a party in tony Westchester, he indulges his inner child and pulls out the canary yellow Ferrari. When the mood strikes, he might also tool around Manhattan in a Mercedes E series or the Corvette Z06.

But don’t let the cars fool you. While Thorne, president of Great Places publishing, may enjoy all the benefits of zipping around in the world’s most coveted cars, he doesn’t own a single one of them. That responsibility belongs to Classic Car Club, the London-based car-leasing association that provides its members with the keys to hundreds of luxury vehicles for an initiation fee and annual dues that range from $7,000 to $22,700. “It just makes so much sense for anybody who is either passionate about cars or passionate about their image,” notes Thorne. “It’s the perfect answer to satisfy both those needs without the myriad hassles that come with car ownership.”

If it sounds like the best of all possible worlds, it is. Like Thorne, a growing number of consumers around the world are beginning to realize that ownership—of cars, vacation homes, high-fashion gowns and even expensive artwork—doesn’t always come with privileges. It used to be that possessing such status symbols was a measure of how successful you were. But with priorities shifting away from showing off such material markers to showing off financial smarts, the leasing bug is spreading fastest within the high-income brackets.

“Things per se have lost some cachet,” explains consumer-trend tracker J. Walker Smith of Yankelovich, which surveys consumer buying behavior. “There is such an overabundance of stuff in the marketplace that owning does not carry as much perceived value as it used to. People are now more interested in experiences than in owning things.” It’s all about the benefits of the good life without all the headaches and commitment. In 1991, for example, 57% of people in a Yankelovich Monitor survey cited “being in control of their life” as the most important sign of accomplishment and success, while 38% said an expensive car was such a marker for them. By 2003, however, 76% thought being in control was a sign of success, while only 23% thought that an expensive car was.

Think of it as luxury on loan. Whether it’s the chance to drive a Ferrari or wear a Giorgio Armani gown, it’s less about the cost and more about flexibility, convenience, choice and, ultimately, control. Exclusive Resorts, a membership-based club, offers access to more than 300 palatial vacation homes in Tuscany, Costa Rica and Mexico with as little as a day’s notice. The World, a yacht that serves as a floating condominium building, lets out its staterooms for six-day cruises. In New York City, where socialites appear—and are photographed—at several galas or events each week, Wardrobe, a couture-gown rental shop, helps them solve the vexing question of what to wear. Skis, artwork, yachts—why buy when it’s easier, and often more practical, to rent?

What sets today’s leasing programs apart is the recognition that it’s not just a product that clients want to rent but a service. At Classic Car Club, Thorne is invited to a weekly happy hour at its bar and lounge, and almost every week, he has the chance to participate in a range of special activities, including taking a spin in a race car on a road track. Oh, and when Thorne is in London, he can rent a Rolls-Royce through the club’s reciprocal program there. Similarly, members of Exclusive Resorts are assigned a vacation planner to help them map out their days in paradise and, once they arrive at a home, have access to the services of a concierge 24/7.

Such pampering is what attracted Bob and Diane Mitchell, a retired Michigan businessman and teacher, respectively, to Exclusive Resorts. In 2003, after selling a family-owned manufacturing business, they paid an initial membership fee of $100,000, and for $24,000 in dues each year, they stay in any combination of more than 2,500 luxury homes for up to 60 days. With Exclusive Resorts, unlike the time-share model, if they decide to cancel their membership, 80% of their initial deposit is returned. Since the Mitchells travel most of the year, their per-day costs are often less than for a stay in a hotel.

Aside from offering a way to live a less encumbered life—free of additional mortgages, maintenance headaches, endless repair costs and cluttered closets—leasing is becoming an ideal way to stay on top of trends and styles, particularly when it comes to cars, fashion and sports equipment. At Aspen’s Snowmass resort, for example, 60% of visitors during the past holiday season rented skis from the facility’s ski shop, up from 45% eight years ago. Most of these skiers, says Derek Johnson, managing director of rental retail, now invest in custom boots and bindings but prefer to lease their skis so they can try out the latest models each year. “People also like the fact that they can switch out their rentals anytime,” says Johnson. “If you ski one day, you can come back the next day for a snowboard and then go back to skis the following day.”

Nowhere is fear of commitment stronger than when it comes to fashion. With tastes changing faster than the seasons, keeping up with the latest trends can be taxing on both the psyche and the pocketbook. Following the success of Bag, Borrow or Steal, the online purveyor of premium handbags for rent, comes Wardrobe, which leases couture gowns straight off the runways. Neva Lindner, a stylist and former assistant to Katie Ford, offers the latest creations from designers like Dolce & Gabbana, Carolina Herrera and Behnaz Sarafpour in various sizes and at 15% of the retail price. Lindner’s beautiful array of evening and day wear is too tempting for most of her grateful leasers to resist. Many come on a regular basis to check out the inventory, pick out a few favorites and have them delivered to their homes. Lindner takes care of hemming and other minor alterations, and if you can’t decide which creation to rent, she’ll take photos of you in the dresses that you like so you can make your decision later. “Last year there was a stretch of about two weeks of events where I probably dropped $40,000 in dresses,” says Tatiana Platt, an Internet executive and a Wardrobe fan. “It was ridiculous.” With Wardrobe, Platt can supplement her well-stocked closet and get the peace of mind that comes with knowing she won’t have to spend a fortune to ensure that she won’t be photographed in the same dress twice.

Even high-end pieces of art are up for let. While corporations have long been able to borrow works from galleries and even museums, now individuals can bring favorite pieces home, if only for a few months. The Seattle Museum of Art has had such a great response to its leasing program that it recently moved its leasing gallery from inside the museum to a larger, more prominent location a block away. Last month 75% of its transactions were rentals as opposed to sales. Because the program offers three-month leases at 9% of the purchase price, the gallery has seen a wide variety of renters, from art students leasing their professors’ works to beginning collectors and, increasingly, home stagers—people hired to spruce up a house on the market to increase its chances for sale.

As appealing as the flexibility and services of upmarket leasing are, ownership of luxury goods is, for some, an investment that they expect will pay off in the future. But with tastes in fashion ever evolving, real estate markets in a slump and “it” vacation spots changing as fast as Paris Hilton’s bff, there’s less assurance that your investment will prove profitable. “If you want to go places, get looked after and have a real vacation, let somebody else make the profit on the real estate and take the risk,” says Mitchell. After all, that’s what the good life is all about.

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