Car rental can be a very lucrative business if done right. There is still a demand for Rent a Car in Karachi, but there is also a lot of competition.
Decide on The Type of Rental Service
There are main types of car rental services.
Special Occasion Rental Services hire premium cars like limousines and luxury vehicles for occasions like proms, weddings, bachelor parties, and any other event that requires a touch of class for a day. In this case, it is probably necessary to hire drivers as well. And the types of cars needed for your fleet will be more expensive, as you will need to offer limousines, luxury SUVs, Hummers, and the like.
Longer-term rental services hire vehicles for people who need them for long trips, while on vacation, or when their car is undergoing repairs. In this case, the initial costs might be a bit lower, as you won't necessarily need to acquire luxury vehicles only, and drivers are not essential. But you might also need a larger fleet, and the return on any individual rental will likely be less than the rental time.
Maintenance, Insurance, and Safety
Once you have acquired your fleet and started your business, it is very important to have a solid plan to maintain and insure your vehicles.
Maintenance is important to keeping your fleet in good shape, but also to keep your customers happy.
Insurance is a very important point because foreigners use your cars, and all kinds of unforeseen circumstances could put you in a difficult situation. Don't forget to inform yourself well.
It is also essential that you keep your vehicles in a safe place. You will need a parking lot and security measures to keep your cars safe. A security guard or security service may be needed, and an alarm system or similar safeguards are also good ideas.
Never Underestimate a New Idea
Aside from the traditional and proven business model of car rental, some amazing new ideas use digital technologies to disrupt old markets.
For example, some companies offer renting cars parked at airports while their owners are away. This allows the car owner to enjoy free parking and even make some money. The renter of the car gets a better rate, and the middleman takes its share. This is an innovative model for which it is not even necessary to own a single car. So remember to try to find easy ways to do things differently. Everything is possible!
What Training to Open a Car Rental Agency?
Generally, before setting up your agency, it is recommended to have acquired prior experience as an account manager in a car rental company. Abac + 2 level is generally required when recruiting.
To set up your agency while maximizing your chances of success, it is wise to have in your pocket BTS in "Tourism" or training as a travel advisor in a school specializing in tourism. However, be aware that there is no training dedicated to this profession.
A first professional experience in tourism and the hotel and restaurant industry is a plus.
What Regulations for Car Rental?
Before you start, be aware that opening a car rental agency subject your future activity to comply with certain rules. Before renting vehicles, you must, in particular:
Provide information on your customers' general rental conditions: information on rental prices and conditions, on insurance conditions, on other ancillary services. This information must be accessible in the reception area from customers or electronically if the rental offer is made online;
Give a quote to your customers before the contract is concluded. This estimate must contain certain mandatory info;
Check the car's condition (scratches, shocks, etc.) before the actual rental of the vehicle by a customer. The defects observed must be described in the rental contract or on the vehicle's condition sheet;
Request a security deposit, which is used to cover costs in the event of damage to the car. Optionally, you can also request an advance when you are giving a car on rent, which guarantees payment of the rental;
Take out civil liability insurance, covering material damage and bodily injury suffered or caused by your customers, as well as theft and damage caused to rented vehicles.
Business Plan and Car Rental: What's The Point?
It is authoritative to carry out a market study to verify that it makes sense to set up in the desired geographical area. To do this, you must, in particular, analyze:
The offer: what is the density of vehicle rental agencies already in place where you plan to set up? What price do they charge? What deals do they offer? Are the big names in the industry (franchised organizations) present in this area? If not, for what reasons (low demand or not)?
Demand: is the tourist flow essential? Are there many business customers in the area? Will my agency be close to stations or airports? Does the local population have a vehicle? If the answer is no, can she be occasionally interested in renting a vehicle? What are customers' expectations in terms of facilities and prices?
If the marketplace has real commercial potential, it is strongly recommended to write a business plan. This document is used to determine the financial balances of your future car rental agency: initial financing requirement (e.g., purchase of rental cars), general costs (e.g., car maintenance, insurance, etc.), and income (example: rental rates for different types of cars). This document should make it possible to set a profitable model over the long term.
Writing such a document can be very useful in convincing your potential funders (especially banks) of your agency's viability.
Opening a Car Rental Agency: What Legal Status?
Micro-business and car rental: incompatible
Adopt the auto-entrepreneur status is strongly important to open its car rental agency. To create an agency, you have to buy vehicles to build up a car fleet. This requires making significant investments.
However, the auto-entrepreneur regime does not allow either to recover the VAT paid on your purchases nor amortize your investments. This status is, therefore, unsuitable for this type of activity.
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