Your Guide To Launch A Car Rental Service

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The car rental service business has become a mainstay in modern society; they fill a transportation void by providing quality vehicles that accommodate a variety of needs. From traveling to providing interim transportation, while your current vehicle is being repaired; car rental services provide an economical way of getting from point A to point B. Having access to one’s own vehicle is not always feasible; car rental services provide a viable alternative that many people would consider a godsend.

What is a car rental service? You’ve undoubtedly, have seen them everywhere; they are strategically placed within close proximity to airports and locations where tourist are known to frequent. Car rental services, in layman’s terms, is a business that rents cars; the rental period can be either a few days or a few weeks, depending upon the needs of the customer.


Why launch a car rental service business? Let’s take a look at what the car rental market is worth; according to Zion Market Research, a market research company, the car rental market was valued at 58.26 billion in 2016 and is projected to reach 124.56 billion by 2022. These are impressive numbers; implying that this is a highly profitable market. Car rental services are by no means a new concept; the first recorded car rental company dates back to 1912, when Sixt, a German company, began renting cars. The car rental business has continued to flourish, and there are no signs of it slowing down anytime soon.


Like any other business endeavor, starting a car rental business requires research. The vehicle renting industry is highly competitive; well-regarded companies like Hertz, Enterprise, etc have already secured a foothold in this market, but there is still ample room for newcomers. Here is a list of things to consider prior to starting your own company:

  1. The type of rental operation
  2. Types of vehicles that you will be renting.
  3. Rental locations
  4. Insurance and regulatory requirements
  5. Risk tolerance


Choosing a business model that is both profitable and sustainable is the basic key; the type of rental operation is important. A rental operation is comprised of either contract hire or a daily hire operation. The customer base for a contract hire are typically businesses who lease vehicles for a set period of time; whereas daily hire operations are typically made up of individual renters who lease for a shorter period of time. Once you have identified your business model, you will then want to consider the types of vehicles that you will be renting. If your rental car service, for example, is going to target businesses, it would be a good idea to have an ample supply of cars, as opposed to trucks or SUV’s. It’s always best to know your customer base and to provide services that are tailored to them. If you intend on renting to individuals, choosing the right location is paramount. It’s no coincidence that you are likely to find a rental car service at an airport or hotel; this is by design. A significant percentage of travelers will prefer driving a rental, as opposed to traditional taxi services. It goes back to understanding the needs of your customer.

Understanding insurance and regulatory requirements are essential. It’s illegal to operate a car rental service without insurance; as with any insurance, you will want to find an insurance provider that offers competitive rates and adequate coverage. Renting vehicles can be very profitable, but as with any business, there is some inherent risk. It’s best to know your risk tolerance and to operate your business with an aim towards profitability and minimal loss. The car rental industry is certainly thriving, and with a careful thought out business plan, you too can be part of this billion dollar industry.

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