The global car rental market isn’t standing still and according to the forecasts, by 2022 it will reach 124 billion dollars, which is almost double the 2016 figure. The demand for economy cars is growing the fastest. For these reasons, it’s not surprising that European car rental firms arise more and more. If you have enough funds and you are thinking about starting your own business, consider work in this particular niche.
Competition in the field of car rental is big enough, but despite this, it can bring great profits. To open a car rental company, first, you need to determine a business model, location and to create your own vehicle fleet. Besides that, it’s important to fulfill all regulatory and insurance requirements, including obtaining permission to run a business.
Besides the classic car rental, there other business options which are available for entrepreneurs. For example, it may be a rental car for special events. The chosen business model will determine your target audience and possible income.
The type of vehicles that you will rent depends largely on financial possibilities and location. Economy-class cars, luxury cars, and SUVs are in the greatest demand. It’s important to consider the cost of subsequent maintenance and repair, as well as insurance rates.
At first, determine the amount you are ready to invest in car rental. Next, you need to plan the number of cars in the vehicle fleet and to understand the needs of the main target audience. You can offer your clients one or several services, including:
Many customers don’t have a driver's license, that's why additional it is possible to offer the driver's service. This will increase your earnings and expand your target audience.
In order not to get lost in a string of competitors, you need to consider every little thing thoroughly and separate from them. So you can offer additional services, provide maximum comfort of transport or show creativity in the marketing promotion.
Name of the company is one of the important details that require special attention. The future name should be easy to pronounce, catchy, memorable, short and relevant. After it is necessary to choose the optimal structure of the company, for example, partnership, individual entrepreneurship or LLC. Take the legal aspects seriously - file your taxes, get all the required permits and licenses.
Liability insurance is compulsory in all countries, but it doesn’t provide full insurance coverage. To protect the vehicles fully, it is necessary to buy additional insurance that will be applied in the event of a collision and other cases. For this, it is better to request the available packages from several companies, and after comparison, choose the best one.
Most customers rent vehicles through online platforms or mobile apps. But, regardless of the method of order, the convenience of receiving and returning the car are important. The optimal location - near airports, stations, hotels and other attractions that are popular among tourists. The better and more popular the place is, the more expensive it will cost, but the benefit will be much higher.
A well-built marketing strategy is also required. Its type greatly depends on the financial capacity and target audience. Beside creating websites and registering on various online platforms, you can agree to cooperate with local companies, place advertisements in local media and on street banners.
Choosing a marketing strategy, it’s important to conduct a thorough analysis of competitors. So you will see their advantages and can improve them. Various promotions or special offers for new and existing customers also work very well. It’s important to participate in various touristic events and build profitable partnerships with agencies, etc.
The cost of a car rental in Europe differs depending on the location. So in the resort town or city, the price will be much higher than in a small village. For example, in the UK, the rental week will cost from £ 700, which’s the highest rate among European countries. Next are Italy and Portugal, where the tenant will have to pay from 700 to 800 euros.
The cheapest way is to rent a car in Turkey, Holland, and Belgium, where prices are about the same level - 500 euros per week. All presented figures are based on an average rate (five large rental companies) of renting a family car with improved insurance, driver, car seat and navigator. Also in the amount is included the cost of a 40-liter gas tank.
Don’t forget that all these figures are relative and may differ depending on a number of factors:
Every country has its own rules and requirements for opening a car rental. To find out the exact list of required documents, it is necessary to consult with the list of permits and licenses on the administrative site of the required city.
Some legal documents, which is necessary for a successful car rental business in Europe are listed below:
In addition to the business license, insurance is the key point for the car rental company. It’s important that the vehicle fleet to be in excellent condition and to have corresponding insurance coverage.
Comprehensively coordinated business process is very important for the success of the company. We recommend using special software solutions that allow tracking the work of car rental fully. Such is the rental car software RentSyst.
We offer the online platform of car rental in Europe RentSyst with the widest internal admin functionality. With its help, you can monitor the work of the company, the condition of cars, orders history, and others. The modular system makes possible to include additional widgets in the standard package and to improve usability.
In addition, if you are just launching your car rental, you can contact RentSyst and the company's specialists will do everything “on a turnkey basis”.
To start a car rental business can be difficult because the industry is quite competitive. But, following our recommendations and using RentSyst - car rental software, you can count on a successful start, expansion and a rapid increase in income.
List of RentSyst updates and features that were added during Q1 of 2023
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