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Open Rent a Car Company

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Category : > New Business Setup
Posted On : Sat Oct 08th,2016

Car Rental Company: A SIMPLE & Easy Method That Works for All

How to Start Rent A Car Business?

 Opening a car rental business is totally feasible both in the term of cost and benefit. The term car rental is commonly used for the customers who hire cars for a limited period of time. To enjoy a good turnover, you need to have a sleek and impeccable fleet.


  • Overview 
  • Market Feasibility Report
  • List your Niche
  • Choose your Location
  • Possible Challenges
  • Obtain Insurance
  • Get Online Exposure
  • Company name regitration and Licenses

  An overview of car rental industry 

Car rental business is progressing day by day. It is a business where you can take your start with few cars. In this article, I am going to depict the whole picture of setting up a new car rental company along with business planning and legal requirements.

Rent a Car, Business has Advantages and Disadvantages

  • It is highly competitive and risky business.
  • The insurance cost is too high due to risk factors, cars may go to the maintenance and you should have good inventory for the replacement otherwise you will lose customers and revenue.
  • Companies or individuals rent cars on short or long term basis. Car maintenance and insurance is not their responsibility.
  • Most of the car rental companies do not allow to cross the country borders.


It is highly recommended to consider and list all advantageous and disadvantageous before starting a business.

Market Feasibility Research 

Market feasibility report can be said the very first point to registering a car rental company. You must extensively research on the current market trends of customers in the area where you are going to open your business. what kind of customers like what car?

You will prepare a list with the following contents: 

 You can drive revenues from the following sources:

  • Government agencies
  • Private Companies
  • Individual Customers
  • Field Managers

 Expenses to be considered:

  • Cars Cost
  • Insurance Cost-Car rental companies is a business where the risk of damaging cars remain always; get an adequate cover of the best insurance companies to get instant economy flow in the case of any incident.
  • Risk is involved to cover cost of unexpected expenses
  • Rent Expense
  • Administrative Cost
  • How many companies have already existed in the area, you are planning to start?
  • Cash flow to pay routine expense

You can take an average by researching the competition in the market. You can make some surveys to know the customers’ views.


List of Niche Ideas within the Car Rental Industry 

Choose the area in which you have expertise or you can manage it. At the start, you have to be very careful in selecting the car rental category. Customers like the companies those are disciplined in nature and have a special protocol. Every business demands attention and customer care. The same theory applies in this business. you can choose from the following category:


  • Individual car rental services 
  • Corporate service  
  • Transport service 


Choose the location of your operation.

The location has been a key consideration in any sort of business. select the place where you are easily accessible and can develop your commitments and plans smoothly. Locations of high traffic areas possess more business opportunity as compared to the low traffic areas. Here is a list of ideal locations:

  • Hotels
  • Airports
  • Stations
  • Prominent commercial areas

 Possible Challenges

In every business where there are some edges, there always remain some challenges to face. You need to be consistent with your goals and plans. With the time you will make your own way one day. You may face following challenges in opening a car rental company:

  •  Financial challenge
  • Good cash flow
  • Legal problems (licenses-permits)
  • Poor location


Have a website

A unique website gives your customer a larger exposure, you can approach your audience in a single click. The customer feels it comfortable to book with the company that has a website with the packages details and the price. Let customers decide what they want. It is a way to win their trust.

 Choose the best legal entity

You have various options to get registered your car rental company in the USA.  You can choose one of the following structures to incorporate your business.


  • LLC (Limited Liability Company)
  • Sole Proprietorship
  • Partnershis and Limited Partnerships
  • Corporations or S Corporations


 A Non-US resident can register his car rental company in the USA under following laws

  • Register his business in the state where he is going to start business
  • File taxes as a Non-US resident
  • A non resident is not physically presented in the USA cannot reigister a sole proprietorship.



The Author of this article is a M.Phil in English Literature

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