How To Start A Car Rental Business

As any business owner will tell you, starting a business is not a piece of cake. It takes grit, determination and a level of self-awareness that most people simply aren’t capable of. But, if you consider yourself an entrepreneur and are passionate about the car rental business, then you’re in luck. Below we have a well-researched guide on how to enter this competitive industry and start a successful business. Read on for more.

How to Start a Car Rental Business

There are quite a few considerations to make before you start a car rental business. For one, you need to find a strategic location because can’t just place a car rental company anywhere. Next, you must decide on the business model you want to follow and figure out if you’re going to start with a fleet or just one or two cars. Feeling overwhelmed? Here’s a step-by-step guide to simplifying the process:

  • Do your market research.

Do your research on the local car rental industry and find out who your competition is. Pick out the successful operators and find out what they’re doing right. Also, do some networking to figure out where your market is and what your customers need.

For instance, an area with lots of tourists makes it easier to market high-value vehicles that people wouldn’t normally own but are willing to hire.

  • Decide on your rental policy.

Car rental companies either rent cars through daily hire or by contract. If you choose the daily hire route, it means you’ll mostly rent out cars to individuals on a day-to-day basis. Contract hire is when you lease vehicles out to customers for a predetermined amount of time.

The option you choose will depend on your preferred customer demographic. Daily hires work well for anyone that doesn’t mind renting out vehicles to the general public, while contract hires require long-term deals.

  • Choose a location.

When looking for a location, try and find a place that isn’t too close to existing rental companies. This might be difficult because in most cases, lucrative spots like airports, train station, and hotels are already taken.

If that’s the case, then you can always adjust your business model from a B2C to a B2B operator. This means renting your cars out to other rental businesses in a busy location.

Alternatively, try and offer something that your competitors don’t have. For instance, you might offer luxury vehicles or classic car rentals.

  • Consider starting a franchise.

Instead of starting a brand-new car rental business, consider buying into a franchise instead. That way, most of the legwork has been done for you. All you have to do is look at the major car rental chains, choose the one you like and contact them through their website. They’ll email or call you within 24 hours to help you set up your franchise.

Piggybacking on an existing car rental chain will save you a considerable amount of money and time when setting up your business. They’ll take care of all the paperwork and licenses involved and provide you with the equipment and training needed.

The downside to buying into a franchise is that you have to pay the franchiser a certain amount each year for using their company name. Your arrangement may also come with certain rules that restrict your business, and if other branches of the franchise do something negative, the bad publicity will affect you also.

  • Acquire an existing rental business.

Fast-track your way to success by acquiring an established car rental business. Similar to a franchise, most of the groundwork has been done for you and you won’t have to set up the basic structures.

If you purchase the business as a running concern, you’ll get all of its equipment and car fleet as well. This saves you the time and money you would’ve spent shopping around for both. But, you need to do your due diligence before you acquire any business. This means doing a lot of research on the history of the business, the location, etc.


Starting a car rental business can be an exciting yet daunting adventure. But, it helps to have helpful signposts to help you out along the way. Hopefully, this article has bought you a step closer to realizing your dream.


Usman Raza
Usman Raza
Usman Raza is a CEO and co-founder of Christian Marketing Experts. He has been writing for magazines and newspapers since 2001, and editing and managing websites since 2006. Usman has a BA in Business Development, Philosophy, and English. A generalist, his most covered topics are business, technology, gadgets, and headsets. When not working, he’s probably spending time with his family.

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