Car Rental Business Plan | A Complete Guide 2

Car Rental Business Plan | A Complete Guide

What most of your friends would suggest for a road trip? It is to rent a car and enjoy flexibility. Most people find rental cars a lucrative option than to save lakhs of money for years. 

Why to wait if you can enjoy now? Also, the cost of buying a car is equivalent to renting it for a few years. This aspect has been understood by most of the people in India.

Car Rental Business

If you are looking to start a car rental business in India, then this is the time. Opportunities have been created, you are required to take action. What is the biggest question in the minds of people? From where to start a car rental business in India.


Develop a Car Rental Business Plan:

A successful business depends upon the strategy that you follow. Read the below strategy to enhance your market knowledge.

Research the Market

Start by approaching various car rental dealers. Get quotations from them to know the pricing. Further approach car showrooms to understand the costing of various models of car. 

Understand Customers

You need to build contacts in the automobile industry. It will help you to know the demand of customers in the industry. For beginners, the best way is to use the research data present online. It will help you at the initial stage. You will come to know which cars are preferred more in your area and other factors.

Competitors Research

Based on the area of operation, the competitive market will change. You need to know the strategies used by your competitors. Who are their suppliers of cars? What kind of cars do they provide for rent? What is their targeted market? 

Business Structure

Depending upon the targeted market, the business structure will be defined. The structure for a business is used to simplify your work and have an advantage over your competitors.

Car Rental Business Structure

Here are the various business structures that you can use.

Sole Proprietorship

Starting a car rental business as a sole proprietor will be advantageous if you have the required capital to purchase a fleet of cars. This type of structure helps to make decisions without thinking of any other’s perspective. You get all the profits and liabilities too.


Starting a car rental business with partners will be productive for those who do not have enough capital or knowledge so that other partners can balance out on your needs. You will have to share profits but it becomes easy to operate and make your business successful with experienced help.


Buying a franchise will give you an edge from those startups who are trying to build their brand. You already have a brand image that you can use to attract customers. You should know that in this case, you need to follow the rules of the franchise company.

Purchase a Car Rental Business

A working car rental business is a good way to have a headstart from your competitors. It will provide you with already formed networks and customers. You may even get a good inventory of cars. You must have the knowledge to take it forward.

Legal license 

A car rental business needs various licenses. Not only business licenses are mandatory but also cars will require mandatory permits for their usage. Before applying for a license of your business, you must make sure that the business is for chauffeur-driven or self-driven cars.

Driving car

Business Licenses

GST Registration Taxation number is important to pay taxes on your income.

Business Registration depending upon the business structure you can apply for registration.

Trade License You must obtain a license to deal with cars on rental.

Car Licenses

Rental Agreement You should prepare an agreement with your customers to trade rental cars.

Leasing License You must have the license to lease out cars.

Car Insurance Cars should be insured as it is compulsory by the government of India.

These are obtained from the seller of the car either the individual ( in the case second-hand purchase) or the company.

Cars Required

purchasing cars for renting

While purchasing cars you should know that one type of car won’t work. You must have at least two to three different models to attract customers. You may purchase a mix of luxury and medium-cost cars.

  • Check the working condition of the car through a mechanic.
  • Get the licenses required if the car is second hand.
  • Ensure the expected lifespan of the car and balance it out with the cost.

What type of cars should be purchased?

  • If your target market is the corporate industry then luxury cars are more preferable.
  • For youngsters, medium-cost is much more advantageous.
  • Tourist places will require costly cars.


Before pricing, the major aspect that needs to be defined is the rate at which cars will be charged.

  • Hourly Rate
  • Fixed Time Period
  • Mixed Pricing

Most of the businesses follow mixed pricing as they have both types of customers. You need to develop charges for your cars depending upon the fuel it takes an average mileage of the car.

One more strategy is followed by business in the car rental industry for pricing is:

  • Per day rates
  • Per week rates

If you are confused then you need to know the kind of area such as tourist areas have hourly rentals while the industrial area has per day rentals. Determine your area and fix the rates accordingly.


Location of car renting business

The location factor of the business is really important and it is dependent on various factors. 

  • If you are a beginner and starting from home then have some space to park 3 to 4 cars which will be surely required.
  • If you are starting as a storefront car rental dealer then go for a big space to keep numerous cars at your location.
  • If you are starting online then too you will require a storage area. You can call it a warehouse or go down but it will take the same space as a storefront.

Any location you choose must ensure these factors:

  • Enough space
  • Operational area
  • Raw material area
  • Safety from rain and snow

Following the above points will be sufficient to secure an ideal location for a car rental dealer.

Hire Staff

car maintenance

A car rental provider makes sure to provide well suited and smooth functioning of cars. It is only possible if you have efficient workers.

The basic requirement for the car rental business is efficient mechanics. Skilled and experienced mechanics are required who can check the lifespan of cars and fix any damage created in Your cars.

Interview mechanics properly as most of the time they would come to you to learn the mechanical job. Do make sure that they are experienced enough in their field.

Digital Presence 

Car rental dealers are generally booked online. People find it easy to talk and book quickly. That means a social website is everything you need to attract first customers.

Here are some strategies to find potential customers.

Post on social channels

You can start posting various offers available. We recommend you to build posters and publish online such as road trip discounts or outstation offers.


TV catches the eye of every person in today’s time. You can promote your business on tv or radio channels. It is the most effective form of communication that is reachable to large customers.

YouTube Marketing

While comparing various sellers most people go to youtube and if they get good comments about your business then it is always a yes from their side. Make attractive videos of your products and publish them on YouTube.

Google Adsense Marketing

You may come across with ola ads every now and then when you watch a video. That is how you remember a brand and try it to know its features. It is a great way to build customers.


Starting a car rental business is easy and profitable in today’s world. What you need to learn majorly is the basics of car models and their features. If you are through with these things then your business can earn high profits.

With the above strategies don’t forget to categorize your business into a defined structure and build a great pricing structure. It is the most basic part of your business.

Here is a TIP# Get certified cars to avoid future interferences. Check licenses and operational capacity of the car. Once you purchase a car it will be your asset so make decisions carefully.

Have any queries? Don’t wait, Comment Below.

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