Car rental business is a quite expensive event, but only for tenants. For car owners, their rental gives an opportunity to get big profit. The rental company is a serious type of business because to maintain a vehicle fleet isn’t a cheap pleasure. Before to decide to open a car rental, we recommend to analyze this segment of market thoroughly and to draw up a business plan.
Main business or additional income?
Car rental gives an opportunity to earn a lot of money. But only on condition that the owner is competitive and has found its own niche in the market. This may be a regional advantage, special offers or specialization in a particular service.
As an extra income, almost everyone can rent a car. As for the main business, investments will be higher here. If you really want to earn money, you will have to spend money on completing and servicing the vehicle fleet, arranging all the necessary documentation and other needs.
Income earning potential
The cost of rental varies from the condition and class of a car, as well as location. In general, to rent an inexpensive car in Europe, for example, Nissan Versa, costs no more than 60 euro per day. Rental of a premium car will cost no less than 100 euro.
Current expenses include employees salaries, utilities, insurance, replenishment and maintenance of the vehicle fleet, rent, the Internet, creation, and support of the company's website. Hiring workers, count on a daily payment in 10 - 12 euro per hour. Taking a mechanic to the staff, it will be necessary to pay him from 30 000 euro a year, and a staff marketer from 25 000 euro a year. In the same range will cost the services of a web designer and accountant. Insurance policies will be needed as for the business itself and for each car as well. In Europe, it will take at least 450 euro per month.
A couple of hundred euro will be needed to pay per month for utilities and the Internet. Also, from time to time you can add new cars to the fleet. In this case, it’s desirable to have in stock up to 30000 euro. To maintain vehicles will cost about 450-900 euro per month, depending on the intensity of use and the number of customers. The monthly rent for inexpensive office space varies from 600 to 1000 euro. Also, when the website of the car rental company will be launched do not forget to allocate money for its updating and improvement.
If you have chosen a good location, filled the vehicle fleet with various models of cars and set competitive prices, your investments will quickly begin to bring visible profit. In the first one or two years, you can count on income from 50 to 100000 euro.
Continuing to develop your business, improve the quality of service and replenish the vehicle fleet, you can count on further stable earnings in the hundreds of thousands of euro. If you decide to expand the service area and to reach a higher level, then you can earn millions on car rental.
Where to find your first customers
If you want to create a car rental, first of all, you need to determine if the place where you live is suitable for such a business? More favorable to launch a car rental company are tourist cities such as Paris, London, etc., or any business centers. In such places, the only ones who do not have a car are tourists and travelers. So they form the basis of your target audience.
When you know your main customers, you can understand how to communicate with them, what to offer and where to advertise. You can also start cooperating on a commission basis with travel agencies, airports, hotels and hostels. They will recommend you to their customers for a certain percentage. That will allow to save on advertising and to get direct access to the target audience.
There’s also a special car rental solutions that makes possible to contact those who want to rent a car directly. To achieve this and optimize the work of your business, car rental software will help you:
To get the maximum profit from renting a car, follow our recommendations:
List of RentSyst updates and features that were added during Q1 of 2023
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