How to Begin a Luxury Car Rental Company

How profitable is it to own and operate an exotic car rental company? Despite the fact that Covid has impacted many businesses, rising demand and a shrinking supply of cars are boosting the luxury car rental market.

Previously, driving a luxury car like an Audi, Mercedes, or Mustang was limited to three options: buy a new car that was prohibitively expensive, buy a used car, or borrow one from a friend. However, due to the high cost of a luxury car, it is out of reach for many people. Furthermore, the issue of trust arises when it comes to car borrowing.

This is where a company that rents or leases exotic cars comes into play. Many people prefer leasing or subscription models to purchase new cars for the reasons stated above. A luxury car rental company provides vehicles for business or pleasure.

The advantages of starting an exotic car rental business

Your classic and exotic car fleet can be rented for weddings, corporate events, parades, music videos, and movies. The profit margin on start a exotic car rental business is quite high, despite the fact that the business is small. Your income can skyrocket if you find the right clientele.

Renting or leasing a car is not only a cost-effective option for the customer, but it also provides a number of other advantages such as convenience, flexibility, and safety. You can also provide chauffeur service to make it more convenient for the customer.

According to Mordor Intelligence’s industry report, the global car rental market is expected to grow at a 7.5 percent CAGR from 2020 to 2025. The luxury and vintage car rental industry in India is worth Rs 800 crore and growing at a 30% annual rate.

What is the definition of a car subscription?

In exchange for a monthly fee, the customer receives access to a car through a car subscription. He is exempt from paying registration fees, maintenance, or insurance. All of this is included in the monthly fee, as well as roadside assistance. Aside from the monthly fee, the customer is only responsible for the cost of fuel. You can sign a short-term lease agreement with the customer if he wants to keep the car for a long time, say 6 to 12 months.

The customer has the option to upgrade, downgrade, or cancel the service after the subscription period has ended. As a result, a customer who previously drove a Jaguar can now drive a Porsche.

What is the best way to start a luxury car rental business?

If done correctly, starting a luxury car rental business can be quite profitable. We’ll give you some pointers on how to do it successfully in this article.

1. Develop a business plan

To gain lender confidence and lay out your strategy, you’ll need a high-quality business plan. The section on finances will be the most important part of your high-end car rental business plan. This is where your investors will focus their attention in order to assess the viability of your plan.

You’ll need to work closely with automakers to add cars to your fleet. If you don’t have a luxury car inventory, you can find someone who does. You can team up with people who aren’t using their cars or who want to make money off of them. You can allow them to rent their cars to your customers. For both parties, it will be a win-win situation.

You can start with 3 to 5 cars to provide some variety and inventory. Some cars can be rented on a daily basis, while others can be rented for longer periods of time. If a car is becoming obsolete, you can sell it and re-fleet it when demand increases. Don’t let your inventory go stale; buy and sell when the market conditions are right.

Instead of renting a car for a weekend, try renting it for a week.

2. Funding

You can buy an existing business to save money on startup costs. You can use this method to tap into an existing customer base. To finance the purchase of new luxury vehicles, you can raise funds from carmakers or venture capitalists.

3. Research your competitors

Find out who your local competitors are and what their strengths are. In a crowded market, you must stand out from the crowd and identify a niche for your business. Any of the following can be one of your target markets:

• Recreation.
• Services for Corporations.
• Services for individuals.

4. Seek assistance.

Try to speak with a business owner in the exotic car rental industry who isn’t a direct competitor. He can provide you with sound advice and pointers on what to look out for in this small business. Keep in mind that this is a high-risk, high-reward business, so you should have a healthy risk appetite.

5. Geographical location

Luxury automobiles are in high demand near airports and hotels. Many five-star hotels cater to wealthy clients who request luxury cars for shopping or sightseeing. It would be advantageous for your company to be located near these locations.

6. Expenditures

A large amount of working capital is required to start a luxury car rental service. Making car payments will be the most expensive expense. What are the other costs you’ll have to deal with on a monthly basis? Rent, salaries, insurance, and advertising will all consume a portion of the budget. The cost of insurance is proportional to the number of vehicles in your fleet.

7. Promotional material

Word of mouth and repeat customers are the best forms of advertising for this company. A good website can bring in a lot of traffic, which can lead to sales for your premium car rental company. With images of cars available for rent, you can use Instagram as a promotional tool.

You can offer customers discount codes, coupons, or run promotions to help them save money.

Also see: India’s Automobile Manufacturers

8. Exercising Due Diligence

Make sure you’re not renting to the wrong kind of people. Before renting a car, make sure the customer is legitimate. Check his address and, if applicable, the validity of his debit or credit card. The customer’s profile is also important. Luxury cars are expensive; even if you have insurance, you should not rent one to an immature 21-year-old.

9. Provide something extra to your customers

It is critical in this industry to have repeat customers. And the only way to do that is to make the customer happy by providing him with more than he originally requested. Attempt to make your cars look better in person than they do in photos.

You should be willing to go above and beyond. Luxury cars are typically rented for special occasions. If a customer requests that a car be delivered to a specific location at 3 a.m., say, with flowers, you must be able to accommodate that request.

Ensure that the drivers are knowledgeable and well-dressed. The fleet should be well-maintained, and everything should be closely monitored.

Route of franchising

Now is an excellent time to invest in a car rental franchise, as the travel and leisure market has begun to recover. You can buy a successful luxury car rental company’s franchise. Try to learn everything there is to know about them on their website.

Rental Services for Businesses

You can start a corporate car rental service where you rent out luxury cars to businesses 24 hours a day, seven days a week. In larger towns and cities, demand will be higher.

The luxury car rental industry faces a number of challenges.

Insurance can be quite costly. When the cars are involved in an accident, the insurance may not cover the entire cost of the repairs. As a result, you may find yourself with a large hole in your pocket. Excessive wear and tear, repair, and maintenance may also be significant costs.

As this article has shown, the luxury car rental business is not easy, but it can be very rewarding and enjoyable. The profits in this business can be sky-high if you are dedicate and have a good business plan and marketing strategy.