Studying the numbers to launch a car rental business in the United States? Here’s what you need to know:
There are around 15000 car rental businesses in the US, which is expected to increase in the coming decade. As per reports, the car rental market is projected to reach US$ 186.59 billion by 2030 at a CAGR of 6.9% from 2021 to 2030.
You can materialize your idea of starting a car rental business after checking the viability of your startup idea with current market trends.
Starting a Car Rental Business In the USA
Here is a step-by-step approach you can follow to establish a lucrative car rental business in the USA.
Detailed Analysis And Planning
A well-concluded analysis and accurate planning help minimize the risks throughout the business processes. Your major areas of research and planning should include resource obligations, managing licenses, competitor research, technology partners, capital regulation, etc.
Additionally, researching your competitors based on their target market, locations, and revenue streams will help you balance risk with opportunities.
Select The Business Model Of Your Car Rental
You can select a business model to launch your online car rental business based on your planning and research. Determined by the user types and business models, online car rental businesses can be classified as
- Multivendor Car Rental Marketplace
- Single Vendor Car Rental Store
Multivendor Car Rental Business
- A multivendor car rental marketplace is a utility where multiple car owners list themselves as vendors and rent out their cars to the customers. The marketplace owner is the admin and facilitates the car rental operations between vendors and customers.
- The significant streams of revenue for this type of car rental business include platform fees from stakeholders, paid listings, platform memberships, selling insurance and accessories, etc.
Single Vendor Car Rental Business
In a single-vendor car rental business, an individual fleet owner rents out his cars to multiple customers and is responsible for all rental operations through the platform. Here the seller is the marketplace owner and can set terms and conditions per business planning.
Single vendor car rental businesses usually require a high investment since a single business owner has to cover all expenses, including inventory, software solutions, damage recovery, etc.
Marketing And Branding
The online car rental market in the USA has established businesses such as Discovercars, Enterprise, Hertz, etc., making it tough for a startup to battle the competition. However, a robust branding strategy can help your car rental business stand out from the crowd and create an identity to recognize the target audience easily. Additionally, you can market your business’s unique selling points and services with a structured marketing strategy that helps you reach your target audience.
According to the Business Development Bank of Canada, new online businesses’ marketing and branding budgets should not exceed 10% of the total revenue.
Budget Required To Start a Car Rental Business In the USA
Buying a fleet of cars, technology infrastructure, and vehicle maintenance tools are heavy yet one-time investments that car rental companies require as an essential part of the business. Additionally, overhead expenses such as employee wages, insurance charges, parking space rent, marketing, etc., add to substantial recurring bills.
Revenue In Car Rental Business
The revenue of a completely new car rental business will depend upon multiple factors, including regions served by your company, services offered, competition levels in the market, and the number of employees working for you. Car rental services dealing in specific domains, such as luxury car rentals, are more lucrative than regular car renting services.
Additionally, you will have to define the revenue streams for your car rental business. The revenue streams for your car rental business revolve around the business model due to the difference in user types.
In the Multivendor car rental business, you can generate revenue in the form of:
- Rental commission from car owners,
- Registration fees,
- Subscription packages
- Paid Listings
In a Single vendor car rental business, you can generate revenue in the form of:
- Subscription packages for customers
- Advertisements and running PPC campaigns
- Selling additional services such as insurance
Considering the financial spending such as employee wages, accidental damage recovery of vehicles, and fleet management, a well-functioning car rental business in crowded cities of the USA, such as CA and NYC, can be made profitable within 6-12 months.
Top 7 Popular Car Rental Businesses In The USA
- Fox Rent A Car
- Alamo Rent A Car
Online Car rental business in the USA is a profitable venture to start your entrepreneurial journey as per data experts. However, to materialize your business idea, you must put all your requirements and USPs on paper and start looking for resources.
When you run a car rental business online, it becomes difficult to streamline the rental processes and bring all the stakeholders on the same page. Yo!Rent is a one-stop, ready-to-go solution with advanced rent-centric features that help you manage your car rental operations. Its dedicated modules include a booking calendar, rental security management, returns charges, bulk volume discount, document verification, car comparison, etc.
You can book a personalized demo of car rental software to analyze how your car rental business would operate.