How to Start a Car Rental Business in California

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Rental cars provide visitors and temporary residents with convenient transportation.
Rental cars provide visitors and temporary residents with convenient transportation. (Image: Thinkstock/Comstock/Getty Images)

California has been known for decades as the land of the car. Cities like Los Angeles have infrastructures that are completely dependent on the private automobile. Millions of visitors come to California every year on business and as tourists, and need cars to get around. A well-run rental business can provide you with a viable income for the long term in California. Starting small can keep you from getting into financial trouble if your business doesn't work out.

Obtain financing for your business. You will need to put a substantial amount of money into it before you get any out. Develop a productive relationship with the loan officer at your bank, because you will need it.

Talk to your insurance company about your plans. Because of the inherently dangerous nature of cars and driving, insurance rates for car rental businesses can be very high. Don't skimp on your insurance coverage. If someone is injured in a car rented from you, particularly if it is as a result of mechanical failure, you could be in serious trouble if your business isn't fully insured.

Buy several cars to start your fleet. Start with a small business while you get your company off the ground. Don't expand until you are sure that your business idea is viable. If you can't afford to buy the cars, look into leasing. This will take more of your profits in the long run, but will require less financial risk upfront.

Promote your business through magazines, television ads and Internet presence. Advertise in venues that are read by people who will need a rental car, such as airline magazines or California publications aimed at tourists.

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