Starting A Car Rental Business

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Background Information About the Car Rental Business

A Car Rental Business could be the right job for you! Learn about a car rental business and figure out if it's right for you

Car rental business plans allow customers to rent a car for a specific amount of time when they are unable to drive their own for any reason.

This can be a very popular option for not only travelers to your area, but for any locals who are having problems with their own vehicle. For this reason, you should always be able to find people who are willing to rent cars from you.

You will want to find a spot where you can get a great deal of business renting cars. Locations near airports or hotels can be a great option. You also need to have cars in a good condition that you can rent out. There are a number of ways you can get those cars.

You may need to either purchase a number of cars at the beginning, which can be a costly option, or you can work out an agreement with a local company which will lease you the cars to run your business.

Either way is a bit of a risk, but with the right insurance, you should be covered. From there, you need to set competitive rates that will make people come to you for business.

What Is Involved In Running A Car Rental Business?

A car rental business can be locally owned or part of a national franchise.Car rental locations include airports, train terminals, bus terminals and stand-alone car rental offices.

This business specializes in renting out vehicles to individuals who travel and anyone else who may need a vehicle for a brief amount of time, such as vacationers, businesspeople and auto accident victims.

You must complete the appropriate paperwork, verify each customer's driver's license and collect the necessary deposit. Once your vehicles are returned to you, you must complete the final invoice including all rental fees and any additional fuel or mileage charges.

You must remember to be professional and maintain patience, as many people who walk through your doors will be stressed from traveling or dealing with their insurance company, medical bills, etc.

To efficiently run a car rental business, you must be willing to work on a flexible schedule that may require coming in on weekends or holidays and working plenty of overtime.

The Pros of Running A Car Rental Business

You can make good money providing a car rental service to people in need
There will also always be a market for renting cars
It's A Relatively Easy start up
Much needed and widely used service

Cons of Running a Car Rental Business

You will be responsible for the maintenance of all of the cars, keeping them in perfect order.
You will also be responsible for making sure that people take good care of the cars and pay their bills. This can end up being a hassle sometimes.
There also may be certain times of the year which are slower than others, giving you less business.
Highly competitive industry

Equipment Necessary To Run A Car Rental Business:

Website
Regular Office Equipment
A selection of cars appropriate for the type of car rental business you run
Safe parking area, preferably a guarded parking garage
Security system

Skills Necessary To Run A Car Rental Business:

Basic math skills
Read, write and understand English
Ability to multitask
Listening skills
Communication skills
Problem solving skills
Decision making skills
Ability to manage, train and supervise employees
Sales skills
Professional appearance
Ability to operate many different vehicle types
Basic computer skills

Licenses Necessary For Running A Car Rental Business:

Licenses for the rental car business generally depend on the rules and regulations of the area in which they are located. It is best to hire a lawyer to determine which licenses you need exactly. You will need to fill out an application to receive a certificate of authority in order to conduct business.

Next, you will need to select an insurance agent that will be responsible for the handling of the coverage for your rental vehicles. In addition, they will also take care of the licensing fee in your state. Your license will be mailed to you directly and you must notify your insurer that it has been received. Typically, you will have to renew your license on a yearly basis.

Once you have a license to do business, you must then obtain the proper permits for your area. Most states require a record of insurance submitted to the insurance commissioner. You must also adhere to all waste disposal and zoning laws. If you operate your business in an airport, you will have to pay concession fees and are subject to random audits and inspections by the state.

You will need to have local requirements fulfilled before you can open a car rental business. You will also need to have a great credit score to be able to purchase or borrow the cars that you will need to begin your business.

Car Rental Associations

American Car Rental Association

National Association Luxury & Exotic Auto Rental Companies

Association of Car Rental Industry Systems Standards

Employees & Job Requirements:

Rental Agent – A person in this position provides customer service; offers sales incentives; maintains store appearance; inventory; answers phones; keeps working area safe; and more.

Outside Salesperson – Someone in this position promotes products and negotiates contracts to reach rental revenue goals; develop and execute marketing strategies; and address issues with customers in the field.

Customer Sales Manager – This person oversees the daily operations of the car rental business; manages sales reports and makes forecasts; sets revenue goals and manages the plan for reaching such goals; ensures customer satisfaction; manages and trains team members; and ensures that all procedures and policies are being followed efficiently.

Airport Manager - This person oversees the daily operations of the car rental airport location; manages sales reports and makes forecasts; sets revenue goals and manages the plan for reaching such goals; ensures customer satisfaction; manages and trains team members of their location; and ensures that all procedures and policies specific to the airport location are being followed efficiently.

Security Guard – This position includes ensuring the safety of all buildings, rental vehicles, personnel and property; patrolling the assigned area; routinely checking for intruders, unsecured locks or vehicles, lights that should not be lit or any other irregularities and other dangers such as fire, etc. A security guard at a car rental business must always be ready to respond.

Employee salaries usually begin at minimum wage, average $10 - $12 per hour and top out around $18 per hour.

Car Rental Business Hours of Operation:

This can vary depending on your location. If you are near a busy airport, you may want to stay open all night. Other locations can work normal business hours from 8AM to 7PM or so. Either way, you will want to make sure that your customers are able to drop the car off safely at any hours of the night.
Minimum Number of People required to Operate A Car rental business:

You will need at least one person who is able to run the office while you have another who works with the vehicles, making sure that they are in good condition before any customer takes them out. This person will also have to look over the cars once they are returned. A minimum of two people are needed, with more coming in as the business expands.

Car Rental Software:

Rent Centric Pricing! Easy Calculator, Instant Purchase

12 Steps to Starting A Car Rental Business:

Image of A speedometer

Before You consider a car rental business See 16 Questions to Consider Before Starting a Business
1. Ensure A Car Rental Business is for You!

You have a choice as to what business you're going to start, so start one that's right for you. Getting into the right business can dramatically increase your success. Get into the wrong business and your success rate drops. Read Five Secrets to Getting into the Right Business for more information.

2. Understand How A Car Rental Business Operates

How can you run a Car Rental Business if you don't know much about the business? What if you run into an issue that you can't or won't deal with? Then what? You're in a business that you hate working in and that's a problem. See Understand How a Business Operates for more information.

3. Make Sure there is a Profitable Market for Your Business

What's the use of starting a Car Rental Business that is not profitable? You'll be putting all your effort in something that can't support itself or you. There are a variety of issues when it comes to setting the stage for profitability. See Tips for Identifying a Profitable Market.

4. Create a Business Plan For Your Car Rental Business

A business plan is a must for any size business because it helps you stay focused, see the big picture, and get funding. It's something that you create when you start your business and then update as your Car Rental Business evolves. Read our free online guide on How to Write a Business Plan

5. Set up your Business Team

Setting up your team includes finding the right employees and professionals that will help you run your Car Rental Business.

You don't need to employ everyone you work with, but you will need a team of people you can depend on, which could consist of a lawyer, accountant, banker, and consultant, as well as professionals in your industry. See Creating a Business Team for more on this subject.

6. Get a Small Business Loan if You Don't Have the Money to Start

If you don't have the money to get started, then you'll need the necessary financing or you won't have the opportunity to start your Car Rental Business. This can be done as a small business loan, a personal loan, or other small business financing options.

For more on financing your Car Rental Business see our guide on Financing Your Small Business

7. Legalize Your Car Rental Business

In order to run your Car Rental Business legally you'll need to abide by government rules and regulations on the state and local level.

You'll need to do your research, determine what type of business (sole proprietorship, corporation LLC, etc.) to register, create and register your business name, and register your Car Rental Business with state and local authorities.

To go through the business registration process, see Chapter 6: Making Your Business Legitimate, starting with 6 Easy Steps to a Good Business Name.

8. Get Equipment for Your Car Rental Business

In order to run your Car Rental Business successfully and efficiently you'll need to acquire the right type of equipment. How can you run an online business without a computer? You can't! This is an important issue. See Acquiring Equipment for more on this topic.

9. Insure Your Car Rental Business

Make sure you have the proper insurance for your Car Rental Business. Without the right coverage you could lose everything you've worked for. For tips on insuring your Car Rental Business, see our free online guide: Insuring Your Small Business.

10. Prepare To Accept Money

You'll need a way to accept money, you can't depend just on cash or checks. You'll need to accept plastic: Visa, MasterCard, and American Express. To do that you'll need to apply for a merchant account. See Setting Up a Merchant Account for more on this topic.

11. Set up Your Accounting System

Running a Car Rental Business requires you to collect taxes, and report your earnings. So it's best to set up an accounting system in before you start your Car Rental Business. See Setting Up Your Accounting System for more on this topic.

12. Acquire Customers for your Car Rental Business

In order to exist, every business needs customers. Getting customers is one thing you'll need to be good at. If you can master the tasks of getting customers, it's just like turning on a cash machine almost any time you want. See Acquiring Customers for more on this topic

See Also: Our Free Online Guide to Starting A Business

Car Rental Business Issues's:

Estimating Startup Costs - Find out if you're forgetting something

Business Location - Choosing A suitable one For Your Car Rental Business

Build or Buy A Business? - Buying an existing Car Rental Business

Car Rental Business Research:

Here are some popular terms people are looking for online. These may help you during your research.

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Business Builders For Your Car Rental Business:

Business cards for Your Car Rental Business

Business Plan for Your Car Rental Business

Business Insurance for Your Car Rental Business

Small Business Loans: Finance Your Car Rental Business

More Business Ideas:

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