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car rental business

How to start a Car Rental Business and generate ($50k/year)

Your dream business is one click away! Learn how you can start a car rental business, business model, licenses, and insurances to get.

Mohamed Natheem
Mohamed Natheem

πŸ˜‡ Doing business we love is a blessing!

I'm happy that you are about to begin your dream business and excited to be a part of it.

In this article, we will be exploring how you can get started with your car rental business, how much you can make from your business, and everything you need to know.

😎 With some expert tips included!

But wait, what exactly is an online car rental company? Is it similar to the car rental store close to my home?

No, the online automobile rental business is unlikely to have a physical location. Customers can rent vehicles through their digital presence (website/mobile app).

πŸ€“ If you're a digital nerd like me, I recommend starting an online car rental business rather than a traditional one.

Step 1: Pick your car rental specialization

Riches are in the niches!

You have to understand what market you want to serve.

Here are some of the car rental business markets that you can choose:

βœ… Exotic & Luxury car rentals

βœ… Leisure car rentals

βœ… Business car rentals

βœ… Airport car rentals

βœ… Limousine rentals

By picking up your business niche, you can serve your customers better and stand apart from competitors who provide generic services.

Here are some tips to help you choose your specialization:

  1. Find what you are passionate about and work on that.

  2. Find what customer problems you can solve.

  3. Be clear with your unique selling point (USP).

Step 2: Decide your target audience

After the niche selection, you have to identify your potential audience base.

Identifying your target audience will help you develop the best marketing strategy such as which demographic to target, which channels to use, where to spend money on ads, etc.

Your business can't cater to every audience. Your business niche might also help you understand your audience.

Step 3: Conduct market research

Market research helps determine the viability of the services you intend to offer.

It also helps you get feedback about your business directly from your target audience.

There are two types of market research you can perform:

βœ… Primary research

βœ… Secondary research

Primary market research includes focus groups, surveys, and polls. The secondary market research leverages pre-existing data that are available on the internet.

You can conduct market research in-house or collaborate with a specialized market research team from the outside.

Here's a video that explains how you can conduct market research:

How to do market research?

Step 4: Form a car rental business plan

A business plan is a document that describes your startup objectives, business model, and financial, & marketing plans.

Here are the elements to include in your car rental business plan:

βœ… Business objectives, vision & mission.
βœ… Business & revenue model
βœ… Value proposition
βœ… Competitive benefit
βœ… Marketing plan
βœ… Financial analysis
βœ… Management team

4 pointers to help you write a better business plan:

  1. Be realistic with your plans
  2. Understand your audience
  3. Back up your ideas and plans with data
  4. Be laser-focused

Step 5: Gather your funds

Financial planning is an important step before you start your car rental business. Car rental businesses require some upfront costs for registration, fleet management, & creating a website [which we deal with later].

You can also get funding from angel investors and VCs. You have to pitch them with your unique business idea to secure funding.

Here are some financial planning tips for your car rental startup:

βœ… Always have a contingency plan. Your business may incur unexpected expenses.

βœ… Efficiently manage your cash flows.

βœ… Monitor your expenses. You can use Quickbooks to keep track of your records.

βœ… Have a clear financial goal.

Step 6: Choose a business name

Let's discuss something light!

We are going to pick a name for your business. This should be fun.

Your business name helps you with branding and will give you an identity.

Here are some tips to come up with a better business name:

βœ… Make it readable and easy to remember.

βœ… It should be relevant to your business.

βœ… Make sure it isn't being used by any other companies.

βœ… Don't pick a one that's too similar to your competitors.

βœ… Conduct a brainstorming session to pick the best.

The owner will need to choose a name for their online store as the first step toward registering their company. It's vital to double-check that your company name hasn't previously been registered with the US Patent and Trademark Office.

Applying with a name that is already registered with the USPTO will be rejected outright. You'll also waste any application processing fees.

Steve Wilson, Founder @Bankdash.com

Step 7: Choose a business entity

After you've decided on a business name, you'll need to choose a business structure from the options below.

βœ… Sole proprietorship

βœ… Partnership

βœ… Limited liability company (LLC)

βœ… Corporation

The type of business structure you choose influences how your business operates, the taxes you pay, and everything.

Sole proprietorship & partnership entities are easy to set up and have less paperwork so that you can focus on other things.

The corporation is the hardest among all the business structures. It requires a lot of paperwork and should meet the tax requirements and regulations.

Business structures

Feel free to consult with attorneys or business counselors to choose the best for your business.

Step 8: Register and get a license

It's time to kickstart your business officially!

You have to register and get licenses for your business in the state where you operate.

Registering your car rental startup will help you form a legal entity, get business loans easily, raise funds, and build a brand.

The registration process varies from state to state and is based on business models.

For more information on business registration, read this article.

Legally, if you wanted to do business in every state, you would register in the other states as a β€œforeign” entity, registered in one state, but also doing business in other states. Once you are registered in that state, you can then open a bank account, showing the legal status of your business.

There are several merchant account service companies, check them out before you choose one.

Martin Luenendonk, an entrepreneur and co-founder @Founder Jar

Step 9: Create a car rental app/website

The use of mobile apps and the internet has risen considerably since COVID-19.

You're missing out on a potential revenue stream if your car rental business doesn't have a mobile app.

You have three options while creating an app:

  1. Create an app from the ground up.

  2. Using turnkey solutions like RentALL Cars.

  3. Using app builders like Bubble.

Here are the benefits of creating an app for your car rental startup:

βœ… Your customers can book directly from your mobile app.

βœ… Mobile app will be more user-friendly and easy to use.

βœ… You can use it as a direct communication channel.

βœ… You can provide better customer service.

βœ… You can build a stronger brand.

What more do you need?

Step 10: Build your fleet

What would be a car rental company without its fleet? So let's build one!

You can build your own fleet or encourage car owners to list their unused vehicles on your website.

Turo, a prominent car rental platform, uses the latter to run their business.

You can start small in your locality by inviting your friends and people around you to list on your platform and then scale it up.

Step 11: Insure your business

Every business is prone to damage and losses.

You must safeguard yours at all costs. Buy insurance for your car rental business to protect your fleet and business assets.

If you hire people for your organization, you could also offer insurance to your employees.

Step 12: Create a marketing strategy

You have built your car rental business. But you can't rest until you have a steady flow of customers and revenue into your platform.

This can be achieved by creating a better marketing strategy.

Here are some of the marketing tips to promote your rental car business:

βœ… Create 'Near me' pages to attract a local audience.

βœ… Use blogs to provide valuable information to your customers.

βœ… Try using Google ads on competitor branded queries to get more eyeballs to your platform.

βœ… You could also use retargeting ads to get people back to your website.

βœ… Use SEO to drive traffic to your money pages.

βœ… Utilize social media to create brand awareness.

This car rental business marketing guide will provide you with valuable insights on how to effectively progress with your marketing effects.

Step 13: Build your support team

Customer service is by far the most effective way to get recurring customers and promote your business through word-of-mouth marketing.

People trust peer and family recommendations when it comes to choosing a product/service.

Create a support crew to help your customers tackle difficulties.

The faster and more courteous your customer service, the more likely your business will grow.

As a new business owner, one of the first items on my sprint was to define and document the customer success process. Our primary goal was to keep our customers happy, and good customer support was a surefire way to ensure that they love the services we offer.

With great support that includes live chats, email support, and frequent one-on-one meetings with the customers, we managed to land over 40 business deals.

This means that we are able to work on long-term client retention and happiness and focus on our business, gathering invaluable customer feedback, and growing the customer base.

Gordana Sretenovic, Co-founder @Workello


As an aspiring entrepreneur, it must be overwhelming to go through all these steps to get started with your car rental business.

Don't worry, you could bookmark this article and read it through again when you have time.

Make sure you do your research before starting any business. Your time is invaluable.

Looking to further explore our product with the help of our support team? Just ping us on WhatsApp.

Create your car rental app with us!


How profitable is a car rental business?

The car rental industry revenue is projected to reach US$83,022m in 2023. And 71% of this total revenue is expected to come from online transactions. Hence starting an online car rental business would be a profitable venture.

How to develop an app for an on-demand car rental business?

To make an on-demand car rental app, decide on its purpose & features, choose the right tech, design UI, develop, test, deploy, integrate backend systems & payment gateway, launch, market, collect feedback, and update as needed.

How much profit can I make with the car rental business?

On average, an auto rental company can make up to $50000 to $100000 depending on the factors like your business location, customer support & service.

What is the best car rental management software I can use?

There are many software out there that can help you manage your business. But we offer a complete turnkey solution that you can use to create your own platform like Turo and earn from it.

How do online car rental businesses make money?

Online rental businesses use a commission-based revenue model like Turo. They earn from the commissions they get from the car owners who list on their platform and customers who use their platform to book a rental.

How does a car rental business work?

The car rental business acts as a marketplace that connects car owners and customers. Customers use the car rental platform to book their rental and car rental owners list their cars on the platform.

How do I attract customers to my car rental?

You can use digital marketing strategies like SEO, PPC advertising, and social media marketing to improve your car rental business. Check out this blog for valuable car rental business marketing tips.

How much does it cost to start a car rental business?

The average cost of starting a car rental company will be around $7000 to $10000 including the cost to create an online platform.

Starting a business

Mohamed Natheem

Mohamed is our former SEO analyst and content creator.