How do car rental companies make money? What is the biggest rental car company? How do I start a car rental business? You’ll get answers to all these questions and a lot more in this article.
If you are thinking about starting a car rental business, then you are on the right track. It’s one of the most profitable startup ideas compared to other transport service business. However, there is fierce competition in the car rental market but only because the business idea is that good.
According to Zion Market Research report by 2022, the global car rental market will reach $124.56 billion, at a CAGR of about 13.55% between 2017 and 2022.
Let me in you on a big secret. You can start a car rental business with a large fleet of vehicles, a single car, or even without owning any cars. Yes, you read it right. So, you can start a car rental business even without a car. Keep reading to learn more.
Is Vehicle Rental Business Right for You?
This article will be split into two sections
But first, let’s get into the points that stand true for both the categories
If you want to start a car rental company, the first thing you need is to find what type of city you are living in. Is it business-friendly for your venture?
The cities with more favorability to start a rental car service business are either tourist destinations like Paris, Hawaii, etc. or any business hub like Silicon Valley, New York, etc.
The only people in such cities that don’t have a car to drive are the ones who don’t live here, the travelers, tourists, and temporary renters. These outsiders are your target audience. Now you know who to target as an audience, but how will you get to them?
Put your advertisements at places where such people will be present more and on sites and social media platforms where they stay online. Target airports, hotels, motels, and travel agencies to advertise and also partner up with them on a commission base for the customers that they serve.
These organizations will bring their customers to you. They will suggest your ( vehicle ) car rental services to their customers. This way, you will save a fortune on advertisements and get your business straight to your prime customers.
Starting a Car Rental Business Plan
Car Rental Business Tips for Car Owners
This section is for both; who presently own car/cars and who are planning to own car/cars.
Which car is best for business?
If you are yet to buy vehicles for your business venture, first of all, think about what type of rent a car service you want to offer and buy your car accordingly.
If you are thinking of starting a car rental service for families that a traveling then you would need something like a station wagon or larger size cars that can hold more people and also have enough luggage space.
On the other hand, if your target users fall into the business category, then you need a more high-end luxury vehicle that the businessmen would prefer.
How Many Cars You Need?
After deciding the type of vehicle you need to determine how many cars you would need, you can start with one car if you are on a tight budget and then expand as demand increases.
There is also an option of leasing the cars instead of buying them, saving you a lot of money and providing more vehicles at a limited budget. The saved money can then be spent on other aspects of your business.
Where Will You Keep the Cars?
When the cars are not with the renters, you need a place to keep them. You should get a garage space where the cars would be parked when not in use. You can rent out a garage for a lower price instead of buying the place. If you only own a single car, then you can park it in your home garage.
Do You Need Insurance?
Yes! Insurance is a must in the vehicle rental service business. You can’t be too sure while giving the car up for rental. There are many Insurance categories for rental car service. Some of them are third-party insurance, fire insurance, and car theft insurance.
Why Should People Rent Your Cars?
Advertising is essential for any business. Your customers need to be informed about your company and its services. The best form of advertisement at present is digital marketing. You must have a website for your car rental service company.
You need a dedicated and efficient team of website developers to build an attractive and functional website for your business. Developing mobile apps for car rental business are also an emerging platform for digitally reaching your customers. More about mobile apps is discussed below, so keep reading.
Tips For Non-Car Owners
How will You Start Business Without a Car?
It seems impossible to start a car rental service without owning a car, but it is absolutely possible and much easier than for those who own a car. All you need is to build and operate a spectacular car rental app.
Even the app development work can be outsourced to a taxi app developing company. Find the best car rental app development company to build your app, then all you need to do is monitor the app and get paid.
How will the Car Rental App Work?
Your car rental service app will act as a platform for people who need a car for rent (Rentee) and people who can provide car on rent (Renter). The renters can register on your app by giving their and their vehicle information.
The customers can go through your database of renters and select the car they like and book the car for rent. Even the pickup and drop between both parties will be done by themselves; you need to just give the location of the vehicle to the concerning party.
The car-owning entrepreneurs can also build this type of car rental service app. They will add their car details into the database instead of other third-party owners and handle the pickup and drop off of the cars themselves.
What Will Make Your Car Rental App Better?
Installing GPS live tracking systems is an excellent move. You will always be aware of the location of your car and also record the speed and distance traveled. This way, the vehicle is never out of your “sight”, and the stats are always at your disposal in your car rental admin dashboard.
Having more than one payment option in the app is very helpful to your customers. Most of the transactions for car rental services are done using credit and debit card. But, online payment modes like PayPal, Apple Pay, etc. are becoming more prominent with time.
Having such Payment Gateway Integration in your app will give a very flexible and pleasant experience to the customer.
Best Examples of Car Rental Service App:
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Thinking about Starting a Car Rental Business
Starting rent a car Company with a mobile app could be the one in a million opportunity that will change your destiny. But to stay headstrong in the business, you need to keep on innovating and researching. One thing that will help you best to reach your goal is a perfect mobile app business plan. This plan will guide you through your complete journey to launch a successful car rental app.
A mobile app for car rental service helps you bring this innovation to your business. Having a dedicated team of top mobile app developers is very important. So you have to find the best mobile app development team for your business.