How to Open a Car Rental Company
A car rental company hires cars out to customers for temporary periods of time, generally from a few days to a few weeks. Reasons for renting cars are, generally, the need for transportation while away from home on vacation or business, or the need for alternative transportation following an accident or while a vehicle is being repaired. In a prime location, such as an airport, car rental companies can be very lucrative. Most rental companies are part of large chains, however, that are able to competitively price their rentals due to the high volume of business.
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Instructions
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Complete a feasibility study and determine if, and what type of a car rental business is viable in the location you plan on operating in. Find out if your planned location has sufficient potential customers and how many car rental businesses already exist in the area and the type of rentals they provide. Your feasibility study will help you to decide which type of business has the best chance of success, for example, rental cars, franchise or limousine services, based on competitors and the market in your chosen location. The results of your feasibility study will also help you develop a comprehensive small business plan, which you will need, if you intend to apply for business start-up loans and grants and seek investors. The Small Business Administration has regional offices across the country, which can assist entrepreneurs by providing free assistance with all aspects of starting a business.
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Locate a suitable property to lease for your business. Ideally it needs to be easily accessible from major freeways, and located in a convenient and safe location. Ensure that the property is zoned appropriately for a car rental business. Ideally, the location will have adequate fencing for security purposes.
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Find vehicles for your fleet. According to Auto Rental News website fleet vehicles for car rental businesses can generally be sourced in three ways: outright purchase; lease; and ownership with manufacturer repurchase.
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Learn the Association of Car Rental Industry Systems and Standards (ACRISS) classification coding system. ACRISS has developed a car classification standardization for vehicles to assist ease of comparison of rental prices. Each make of vehicle is signed a unique four-letter code based on size, cost, power, luxury factor, chassis type, transmission and drive and fuel type.
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Design a rental contract and determine your conditions for vehicle rental. If the renter wants to avoid surcharges, he must return the vehicle in the condition he hired it and he must not have exceeded an agreed amount of mileage. Decide upon a minimum age for renters. Some companies will not hire cars to drivers under 25 years of age. Renters must also be in possession of a valid driver's license. Once you have created your contract, it would be a good idea to consult a business attorney to ensure that all aspects of it are legal and binding.
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Check the insurance liabilities of the car rental business. In addition to business liability insurance, state laws require that car rental companies provide liability insurance for bodily injury and property damage. You will also want to offer your customers a range of other insurance options, from which you will make a commission. These include: collision damage waiver; supplemental liability insurance; personal effects coverage and personal accident insurance.
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Hire customer service staff and staff to clean and prepare cars between rentals. You may also want to provide valet parking, in which case, you will also need parking staff. You will also need vehicle maintenance staff, or contract with a local auto repair shop to provide services for your fleet of vehicles.
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Market your business by contacting local auto repair shops, hotels and other potential business collaborators. Join your local chamber of commerce and network with other local business owners to see if there are ways you can cross-promote. Advertise in inexpensive local publications. Hopefully, your reliability will earn you word-of-mouth custom, too.
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References
- Photo Credit cars in parking lot in an airport image by L. Shat from Fotolia.com
