I want to start a car rental business no francise who to contact, where to start & to get info can't find?

Question

I can't find any info on how to start and who to contact. please don't just tell me to see a lawyer, I already know that. I would like to speak with some one knowledgable that has done the same. or anyone who can really help me. thanks and god bless.

Answer 1

First, before you actually go through to buying/leasing any cars or doing anything try to talk to anyone you may know who is the car rental business or runs a car rental business. Even if it just a friend who worked as a cashier at a rental car franchise/chain location. Their experience and insight will be helpful.

Second, about half of all businesses fail with the first year and about 80% fail in the first 5 years. So, make sure you put together detailed budgets of what your expenses will be and what level of business you need to get to cover your expenses and make a profit. I think your biggest expenses will be rent on the location, the lease cost of the vehicle(don't buy the cars since you will be trading them for new models in a couple years anyway plus the lease payments will cost less than the monthly payments) the insurance on the vehicles, advertising, payroll for the people who clean the cars and run the shop. Talk to vendors in insurance, car leasing, advertising etc to understand what things will cost before you get into anything.
Finally, make sure that you know for sure that you can make a profit before you get started with anything. If you are going to do it then organize an LLC(limited liability company) that will legally own the business. The LLC creates a legal entity separate from yourself in order to protect your personal assets from lawsuits etc. You don't need a lawyer for that, just get a book like Starting an LLC for Dummies.

Answer 2

Are you saying that you don't want to be a francise, but an independent? What city are you in and in what part of the city do you plan to be located...suburb or downtown? If you're thinking of being at the airport, you won't stand a chance of getting in, so forget that, unless you are in a very, very small town. Do a study of where every other car rental company is located (get a very big city/area map and put a dot for each competitor...put a red one for each Avis store, a blue for each Enterprise, a yellow for each Hertz, and so forth)...this will help you on several things...who your competition is, where they are and maybe point out good areas that they don't exist right now. But, when you see big gaps, you'll probably notice that those are areas that might be economically depressed and not good for your business. Going into those areas can also mean higher insurance rates too and customers with a higher risk of not bringing your vehicle back on time. Location...location and again
location. A facility with a good amount of drive-by traffic is extremely desired.

If you don't have a lot of rental experience, go to www.mbachoice.com and sign up for their rental school. They handle RV Rental Insurance, but they also put on a rental school
in Las Vegas...I think in Feb, that you should attend. While it's
aimed at the RV industry, you'll still learn a lot about rental
operations. This school will also teach you how & what to teach your future rental agents at the same time. Or, get a job at a future competitior for 4-6 months.

Visit several different rental-car companies as a mystery shopper. See what makes them tick...what they do right, or even
wrong...how did you get greeted...friendly or stuffy corporate did the agent seem knowledgeable about the rates and vehicles... was the place clean & neat...would you want to rent a vehicle from that company.

You need to pickout an insurance company to cover your vehicles. There are several out there, but I've worked with Zurich/Empire with very good results. They can help train your counter agents and help with your rental agreement (contract). Then get your lawyer to go over the contract to make sure you've got your butt covered every way possible. Then you need to get another insurance company to cover your other insurance needs
like liability, employees, etc.

If you haven't talked to your banker, need do so asap. He's going to want to see your business plan. You'll need to compare the different rates at several funding sources for interest rates and how much curtailments they'll want each month...this is extremely important as those items affect your cash flow.

Now you're ready to see several car dealers and get with their fleet manager to review their models and pricing. But, remember this always, you want to rent only vehicles that will sell well when you want to take them out of your fleet. Don't buy a vehicle just because it's cheap. If you can turn your fleet every 15,000 miles or so, you eliminate a lot of service and maintenience costs....saves buying tires, tune-ups, brake jobs, etc. The longer you keep the fleet, the more you'll spend on those items...and the more problems your customers will experience in your vehicles... customers that have vehicle problems don't come back and/or refer friends or relatives to your company. You get enought surprises when you'r dealing with mechanical items as it is, so don't build more into your business model.

Don't pick out vehicles based on what you would like to own...don't rent just Chrysler products because that's what you've owned all your life. These are items to rent, not fall in love with, but try not to pickout too many different brands. Don't over buy...some people will look at what they need for peak times and buy accordingly, but I like to order for what I need day-to-day. Put your fleet mix in basic "meat & potatoes" type of products...keep away from the speciality vehicles that are nice, but don't get rented a lot. Mustang GT convertibles are great, but unless you're one of the big guys, you'll make more money at the end of
the year putting the same amount of money in 2-3 Toyota Corollas.

Some manufacturers offer buy-back programs, so take a look at those, but they are slowing being cut-back...and have time and mileage limits.

Answer 3

learn the lesson from that episode of seinfeld: it's not enough to take reservations -- you actually have to reserve the car