Car Rental Business, Benefits, and Tips
Car rental business is quite an enticing business today. Especially since many people travel by car compared to public transport. Some people choose to use rental cars because the price is quite affordable if they bring many family members during the trip. Not only that, with this rental car, you can stop at any point.
The car rental business is quite enticing today. Especially when many people need it while the supply is not as much as the demand. Especially if you are in a tourist area that is frequently visited by tourists and need a car to explore various tourist spots in that area.
Advantages of Running a Car Rental Business
Here are some advantages that you can gain when you run a car rental business.
1. Attractive Profit
For those of you who have a large capital, you can start by renting out several cars. Some car rentals can usually earn a net profit of around 3.7 million each month for one car. Imagine if you have 4 cars or more. Interesting, right?
2. Easy to Manage
Visually, this car rental business is quite easy to manage. You just need to prepare the right regulations and rental procedures. After that, you just need to promote it and wait for renters to come.
If you don’t want to bother with the promotion yourself, you can also join existing car rental marketplaces. You can also partner with a car rental that you know. For example, if you have a friend who runs a car rental service, you can entrust your rental car there with a profit-sharing agreement that has been mutually agreed upon.
3. Wide Market Reach
The trend of using cars is currently quite high. Some do it out of necessity, while others do it for prestige. There are people who want to rent a specific luxury car just to experience what it feels like to drive that car. Even though it's expensive, they still rent it occasionally.
You can also easily market your car rental services online. Through WhatsApp, Facebook, Instagram, Twitter, or by placing paid ads on Google Ads. You can also manage the reach of your renters. For example, if you are in Jakarta, you can set the ads to be seen by people in Jabodetabek.
4. Risks Can Be Managed in Many Ways
Currently, there are many insurance companies that accept claims for damage or loss of cars. You can be selective in choosing an insurance company that has proven to handle such cases well.
In addition to insurance issues, you can now also use GPS technology to know the current location of the car. This is very important if you encounter a case where the renter runs away with the rental car.
5. Can Be Done Without Capital
The car rental business can be done without capital. You can be the one offering car rental services even if you do not own a car. The car can belong to someone else, but for every rental transaction that occurs, you earn a commission.
Some people conduct this rental business by taking out a car loan. It's like digging a hole to cover a hole. As long as the cash flow is healthy and the demand for car rentals is high, this is not a problem. The problem arises when the cash flow gets stuck in the middle due to unforeseen circumstances.
Tips for Starting a Car Rental Business
Besides the advantages, every business has its own risks. The greater the potential profit, the greater the risk. Therefore, before starting a car rental business, you can follow some tips for starting a car rental business below.
1. Choose a Popular Car Type
The first tip for the car rental business is to choose a popular car type. This means you should buy a car that many people can drive, such as the Daihatsu Xenia and Daihatsu Sigra.
Almost every driver can drive these cars. Not only that, the Xenia is a fuel-efficient car and can accommodate many passengers. This is why many people prefer to rent popular cars.
2. Do Not Buy Used Cars
The car rental business is not the same as using a car for personal use. For business, the car must be new. The reason is that used cars are usually troublesome. You have to spend extra money for servicing. Meanwhile, the car rental business should not incur additional costs at the beginning. Moreover, financing a new car feels more profitable than buying a used one in cash.
New rental cars will be more in demand by renters and the rental price can be higher. That is why you should avoid buying used cars for the car rental business.
3. Create Clear and Beneficial Rental Regulations
Before starting a car rental business, you can conduct surveys or ask your friends who have been in this business longer. Gather as much information as possible about the best regulations so that you do not incur losses later.
Car rental regulations can include: a rental agreement signed on a stamp, holding the renter's ID card, preparing a complete data form for the renter, and installing GPS on the car.
4. Install GPS in Cars to Track Their Location
Often, cases of rental cars fleeing can be avoided by installing GPS in the car. There are even software developers who seriously address this issue. When a car is rented and the GPS exceeds the allowed radius, an alarm will be sent to the car rental owner. The rental owner can then call the renter to confirm the situation. If the renter does not respond and is suspected of fleeing, the rental owner can immediately report to the authorities and pursue the matter.
5. Use Insurance to Minimize Risks
Insurance is often referred to as dead money. Money paid without hope of return. However, insurance is very useful if the car is involved in an accident or stolen. The rental owner can file a claim to get compensation for the incident. You still need to be careful in choosing insurance. Make sure to choose an insurance company that has proven to be responsible when there is damage or loss of the car.
6. Buy Cars with Light Credit
Some people indeed cannot buy cars in cash for several units. Credit sometimes becomes the last option. If you have to take out a loan, choose one that is light and in accordance with the financial planning you have made. Don’t be too greedy.
7. Manage Finances Well
The key to a healthy business is good financial management. You need to record income and expenses and be strict in budgeting. Once you let your guard down, you will bear the consequences.
8. Set Up a Promotion Strategy
You can promote through various social media available today. From free to paid options. Evaluate the budget spent against the results obtained. By evaluating, you will know how effective the promotions are. If they are less effective, try to find a new strategy.
9. Place Ads on Car Bodies for Additional Income
To increase additional income, you can place ads on the car body. Currently, popular providers for car body ads are Ubiklan and StickEarn. It’s quite nice to earn money just by sticking ads on cars. The risks are low, and the results are decent.
Author: Iskael
