How to start a car rental company

If you are interested in starting a car rental company, you can buy a franchise program, select and buy cars individually for your business, or buy or rent a fleet. To compete with existing car rental companies, it is best to start with a specialized car rental company, if your area can sustain such a business.

Write a business plan for your car rental company, identifying a market for the business. Determine how you will make your business stand out. If you live in a particularly dense city that is not friendly to pedestrians, you may want to start with a company that allows car rentals per hour to cross the city for business meetings or conferences. In that case, you need to establish major centers throughout the city where customers can conveniently leave and pick up cars. Another idea is to rent luxury, exotic or classic cars to customers who want to experience driving one without the commitment to acquire one. If your community is particularly green, you would do well to start a business by renting Smart cars. Create a budget for advertising expenses.

Find the place that can accommodate your fleet. Look for spaces in a busy commercial area, in the center or near tourist areas, airports and main hotels. Contact your local zoning office to make sure the place is properly zoned. Then get a business license.

Create a list of the cars you want to procure and any features you want each car to have. Then contact the manufacturers or distributors to buy or rent a fleet. If you operate a small fleet of specialized cars, get enough financing to buy each car. Financing options include a mortgage on your home or a personal loan with your bank, asking your friends and family for loans, or finding investors. When you borrow from family and friends, establish a contract that details any interest rates or conditions to avoid complications later. A good place to start looking for your cars is at a military base. When members are deployed, they often need to sell their cars quickly.

Find an insurance company to insure your cars. This will be your biggest obstacle, since most insurers want you to have a lost record before extending a policy. Contact the state insurance department and a local Chamber of Commerce for a list of potential insurers in the area. Then contact each one. If the insurance company refuses to insure you, ask how you can become insurable. You may be required to pay a higher rate.

Set your prices for rent; gasoline, in case the car is not returned with a full tank; and additional mileage. Implement a tracking system for your inventory, gas fluctuations, regular maintenance schedule and payments.

Have a mechanic available who can work on your cars or learn how to perform minor repairs on the brands you use. Hire an employee and train him on how to properly inspect each car after the return.

Create a rental agreement. It offers additional insurance protection, shock damage extensions and total loss extensions.


Send your business to local directories, such as Yellow Pages, online and in the book. If you rent luxury or exotic cars, submit your business to the exotic car rental directories.