Opening a car rental company

Opening a car rental company | What you have to keep in mind

The business of renting cars is booming. Whether on vacation or on business trips – modern people do not want to do without their vehicles anywhere and always want to be mobile. So if you want to open a car rental business, you have a good chance of success and of attracting financially strong customers. However, it is crucial that you do not rush headlong into business, but plan well in advance. Important aspects are, for example, financing, insurance and the right location. Read here how to open a car rental company step by step.

Without capital the dream of the car rental bursts fast

If you want to rent cars to other people, you need one thing first and foremost – cars, of course. It should be clear that the number of vehicles offered should be as large as possible to serve as many customers as possible. Also, a certain selection – from compact three-doors to minivans – ensures that your car rental appeals to many people and generates good sales.

Note: Make sure you think in advance about which target group you want to address with your car rental. Based on this, you can then decide in the next step which vehicles you should offer.

Many cars = many customers. In itself, this calculation is quite simple – if there were not a crucial problem. To offer the largest possible fleet of vehicles, you need a lot of start-up capital. Opening a car rental company is not possible without financial means. Even if you only offer used or annual cars from the start, several hundred thousand euros are usually necessary to get the business rolling.

At this point it should quickly become clear that you definitely need a loan or a generous investor to open a car rental business. The fewest founders have so much money on the high edge that they can buy several cars without problems.

Opening a car rental company | What you have to keep in mind

Which legal form for a car rental company?

If you want to open a car rental company, you basically have the choice between different legal forms. It is certain that you have to register a business in order to earn money as a car rental company.

Possible legal forms include:

  • Sole proprietorship
  • GmbH
  • UG (limited liability)
  • GbR

Even if the sole proprietorship is associated with little bureaucratic effort and does not require fixed start-up capital, it is not recommended in the case of a car rental company. The reason for this is the high entrepreneurial risk you are exposing yourself to. If your self-employment fails, as a sole proprietor you are liable not only with your business assets, but also with your private ones. Or in other words: If you are very unlucky, you will lose a lot of money. The same applies to the civil law partnership (GbR). Here you are also liable with your private property.

In order to protect yourself against this danger, it makes sense to found a GmbH or UG (haftungsbeschrankt). These two legal forms have a decisive advantage: no matter in which direction your company develops, your private assets always remain untouched. The 25.000 Euro starting capital, which is necessary for the foundation of a limited liability company, you should bring along anyway, if you want to buy several vehicles. If you still can't raise the money, you can set up the UG as a special form of GmbH. For this, only a symbolic starting capital of one euro is required.

Opening a car rental company | What you have to keep in mind

Requirements and regulations

To open a car rental company, you do not need a specific education and you do not need to have a relevant study. The protected profession of car rental does not exist.

In order to be able to advise your customers professionally, it is of course advantageous if you are familiar with cars and can list various advantages and disadvantages of the corresponding models. Professional experience in the automotive sector is in no way a hindrance if you want to open a car rental company. It is also advisable to have basic business knowledge or to acquire it in an appropriate start-up seminar.

A passenger transport license is not necessary if you want to open a car rental company. Since you do not act as a driver yourself, but only provide the cars for use, the corresponding license does not have to be presented anywhere.

The situation is different with regard to vehicle registration. This must state that the car is regularly passed on to third parties for a fee (i.e. rented out). To ensure that the cars in your rental can be driven without hesitation, an annual general inspection is also due.

The right location for a car rental company

In many industries, the perfect location for a business can be described in a single word: central. However, in the case of a car rental it is quite different. Although many large rental companies often have branches in the city center, it is much more important to pick up customers at a completely different location – literally.

Airports and train stations are the ideal location for a car rental company. Because this is where your customers arrive and from here they need a car to continue their journey. Very few people will be willing to take a bus or train to the city center to look for a car rental company.

The fact that you are opening at airports and train stations in the direct vicinity of your competitors can be both bad and good. Bad because customers always have the option to go to another car rental company, good because customers always have the option to decide against the competitor and for you. If your performance is convincing, you don't have to be afraid of competition.

Opening a car rental company | What you have to keep in mind

Insurances: An important consideration when starting a car rental business

Anyone who wants to open a car rental business and in the course of doing so does not think about adequate insurance coverage is already digging his own grave. Cars are not only very expensive, but also prone to damage. This mixture leads to the fact that certain insurances are an absolute must. It is best to find out from the expert about options and the most favorable rates. In this case, there is no general rule that applies to all car rental companies.

Opening a car rental company with the help of franchising

You'd like to open a car rental business, but shy away from the many challenges and risks involved? Then it is recommended to think about the possibility of franchising. Many of the large car rental companies are franchises and are always looking for new partners.

As a franchisee, you receive permission to take over the business model and implement it independently. In addition, you are supported by professional know-how and technical support. In return, you pay a fee and may also share the turnover with the franchisor. The financial regulations are different everywhere and should always be closely examined – after all, you are entering into a contractual commitment for several years.

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