How to start your own car rental business

Dubai - United Arab Emirates

pired moreder
  • Email address verified
Oct 13, 2022 - Mar 16, 2024
Group size: 1 - 25
How to start your own car rental business
Dubai - United Arab Emirates

pired moreder
  • Email address verified

Oct 13, 2022 - Mar 16, 2024
Group size: 1 - 25

About this trip


The car rental market has been around for some time and is growing and growing every year, cities are growing, which means that the need for rental is growing. When going on vacation to Dubai, looking at the distances there and seeing the cost of a taxi, the thought immediately arises of renting a car from the site, even renting a Lexus, you can travel more profitably by car than by taxi or public transport. 

It should be noted that when starting such a business, you need to be prepared for everything - there can be quite a lot of risk factors. For example, some customers may remove good parts from cars and install cheap ones instead.

There is also constant work and disputes with insurance companies. After all, they are reluctant to work with representatives of our field - they do not want to put themselves at high risk.

Where to start

We start, of course, with an idea and a business plan. And the first thing we need is a down payment, a contribution to your future company.

The initial contribution to such a business will vary from country to country, from the number of cars that you want to rent, from the number of employees hired, etc.

Let's look at approximate amounts.

  1. Registering a company in America costs an average of $1,000.
  2. Parking space rentals average $200 per month per parking space. That is, based on 10 cars, you will have to pay about $2,000
  3. Office space rental. Let's start with an average office for 10 people, while your company is just at the start. Prices will vary, so in New York the price will be higher than in Portland (about $2,000)
  4. Staff salary

  • Administrator - $60,000 per year
  • Accountant - $70,000 per year
  • Manager - $50,000 per year
  • Technician (maintenance, assessment, issuance and reception of a car) - $50,000 per year
  • Security. A hired worker - $85,000 per year 
  • Payroll taxes - 15.3 percent

  1. Purchase of vehicles for the fleet. It all depends on you whether you want to rent budget cars or business class cars. For example, you want to rent both budget cars and business class cars. Supposably, you will have 7 budget cars and 3 business class cars at the start. Based on the calculation that the average cost of a budget car is $14,000, and the price of a business class car can start from $50,000. Counting everything, the amount comes out to about $250,000
  2. Advertising - about $10,000 a month to really get noticed

In total, the initial and minimum contribution will be approximately $310,000.

Location and its role in sales

The successful location of the office significantly affects the success of the business. Many car rental companies also operate in hotels, high traffic areas and airports. In the second case, accommodation will be expensive. The main thing in this matter: customer traffic and the ability to safely park their cars

Promotion. That is advertising.

Advertising is key to promoting your business, especially if you are setting up a business in a big city. Advertising is important even if you are a company with hundreds of rental cars. 

You need to use all possible advertising options, because not all people are looking for it. Therefore, at your disposal there are billboards, frantic lines, television, advertising in Google, Instagram, Facebook, etc.

Risk Protection

  1. Auto insurance. It is important to get money in case of force majeure
  2. Deposit by the client. The amount again varies depending on the class and the initial high cost of the car.
  3. Also a standard action is to limit the daily mileage.

Car rental is a fairly profitable business that you can start developing with a small car park, expanding gradually. However, the constant risks of loss of profit and considerable investments at the first stage can scare away a certain part of entrepreneurs. But with the right approach and a clear understanding of each step, you can grow from a small fleet of 10-30 cars into a federal-scale organization.

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pired moreder
Joined in October 2022
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