Starting a car hire company - not a PH type one though
Discussion
Chaps I've had a typical biz idea of the type we all get and dismiss daily but I'm going to run this past you guys for mirth, merriment and possibly some good input.
Simply the idea is to hire cars the difference is the cars are DACIAS thus the barrier to entry is lower and the cost to the consumer lower plus the resale will be higher.
We would be super flexible as a start up can be and offer monthly rates etc
What am I missing?
There is a good market for those who simply want wheels and don't care about the vehicle...
There is a good market for those who wish to hire a car...
How big is the overlap?
As margins will be tight, can you make the overlap big enough to compensate?
Have prices for current cheapest hire options already hit low enough t be in the zone where price is irrelevant?
There is a good market for those who wish to hire a car...
How big is the overlap?
As margins will be tight, can you make the overlap big enough to compensate?
Have prices for current cheapest hire options already hit low enough t be in the zone where price is irrelevant?
Unless you're in an area where people need to hire a car forget it.
If you're near tourist destinations etc then yes maybe, is there other rental offices in the area?
We have a local rental place in town, they rent vans and cars. The vans are cheap, a lot less then other mainstream agencies and their cars are a lot cheaper also. We rent from them if required as they don't worry so much about ripping people off for stone chips etc like the chains do. That said the local National office will rent you a small car for less than £20 a day
If you're near tourist destinations etc then yes maybe, is there other rental offices in the area?
We have a local rental place in town, they rent vans and cars. The vans are cheap, a lot less then other mainstream agencies and their cars are a lot cheaper also. We rent from them if required as they don't worry so much about ripping people off for stone chips etc like the chains do. That said the local National office will rent you a small car for less than £20 a day
I suspect the main overhead of a hire car company isn't so much the capital outlay of the car, but everyday costs; staff, offices and insurance. Thus, using cheap cars you won't be able to offer them at prices attractive enough to gain many customers.
A slight twist, but something like GWizz hire in London might have a market. Not only would the cars be cheap to buy and thus hire, but you'd be saving your customers the congestion charge and making it easier for them to find parking. I'm not sure there are the same benefits in Liverpool?
A slight twist, but something like GWizz hire in London might have a market. Not only would the cars be cheap to buy and thus hire, but you'd be saving your customers the congestion charge and making it easier for them to find parking. I'm not sure there are the same benefits in Liverpool?
What market are you targeting?
Most people who hire a car for work will use Enterprise/Hertz/whatever the company tells them to.
How many people hire a car for leisure? Those arriving by air will likely rent from the airport; people arriving by train probably aren't in the market for a hire car. Those wanting a "good" car for their holiday won't rent a Dacia. So that leaves you with people who don't have a car (likely to cost you a bit in repairs) and ...?
Most people who hire a car for work will use Enterprise/Hertz/whatever the company tells them to.
How many people hire a car for leisure? Those arriving by air will likely rent from the airport; people arriving by train probably aren't in the market for a hire car. Those wanting a "good" car for their holiday won't rent a Dacia. So that leaves you with people who don't have a car (likely to cost you a bit in repairs) and ...?
Well after a quick chat with a guy who does tourist beatles tours he thinks pre programmed sat nav tours of Liverpool (self drive) could be a winner so we shall look at it a slightly different way.
Beatles and places of interest are huge in Liverpool for 7 months of the year, it would only be a side project so we will see if it has legs - next stop tourist board!
Beatles and places of interest are huge in Liverpool for 7 months of the year, it would only be a side project so we will see if it has legs - next stop tourist board!
DSLiverpool said:
Well after a quick chat with a guy who does tourist beatles tours he thinks pre programmed sat nav tours of Liverpool (self drive) could be a winner so we shall look at it a slightly different way.
Beatles and places of interest are huge in Liverpool for 7 months of the year, it would only be a side project so we will see if it has legs - next stop tourist board!
Easy way to market test that - just do the sat navs and see if people will hire them to drive in their own car.Beatles and places of interest are huge in Liverpool for 7 months of the year, it would only be a side project so we will see if it has legs - next stop tourist board!
Much less capital at risk and gives you a good sense of the size and profitability of the market.
It's a strange one, I have a client who has two car hire franchises from one of the big players. They're cheap but not really any cheaper than anyone else. What's strange is that people travel miles (and I mean miles) passing who knows how many closer hire places to take their cars. Regularly 20 and apparently up to 200 miles.
It seems they search car hire on Google, pick the first/cheapest one and make no allowance for the time and cost it takes to collect and return the thing. Utterly mental. Obviously they're happy but it does make me question the general public.
Point is if people are doing that because of the power of the brand then I can't imagine it's easy for an independent.
It seems they search car hire on Google, pick the first/cheapest one and make no allowance for the time and cost it takes to collect and return the thing. Utterly mental. Obviously they're happy but it does make me question the general public.
Point is if people are doing that because of the power of the brand then I can't imagine it's easy for an independent.
Just to balance the point of view that people are only renting on price - I have a small local firm that I always use and I don't even check their prices. I am a repeat customer for a couple of reasons...
1) They really don't scrutinise to the nth degree the cars/vans so I have no worries about being ripped off for a stonechip I didn't notice at the start. So long as you return the vehicle in pretty much the same shape it was lent to you in they are happy.
2) They have a petrol station on site and only charge the pump price to fill the vehicle back up again. The tank is brimmed every time the vehicle is returned so you always hire with a full tank. Unless I'm doing mega mileage I don't bother to fuel up and let them take the cost out of the deposit.
1) They really don't scrutinise to the nth degree the cars/vans so I have no worries about being ripped off for a stonechip I didn't notice at the start. So long as you return the vehicle in pretty much the same shape it was lent to you in they are happy.
2) They have a petrol station on site and only charge the pump price to fill the vehicle back up again. The tank is brimmed every time the vehicle is returned so you always hire with a full tank. Unless I'm doing mega mileage I don't bother to fuel up and let them take the cost out of the deposit.
Another angle, not sure it would work with Dacia's is being used to great effect by a local company to me.
They bulk buy cars with orders of 50+ in return for massive discounts (think 25-45%). The catch is they can't sell them for 6m.
so the first thing they do is add them to their hire fleet and claim the vat back.
They then hire them out for 6m to cover interest payments, then sell them into the trade giving car dealers a good supply of nearly new cars
They bulk buy cars with orders of 50+ in return for massive discounts (think 25-45%). The catch is they can't sell them for 6m.
so the first thing they do is add them to their hire fleet and claim the vat back.
They then hire them out for 6m to cover interest payments, then sell them into the trade giving car dealers a good supply of nearly new cars
insurance_jon said:
Another angle, not sure it would work with Dacia's is being used to great effect by a local company to me.
They bulk buy cars with orders of 50+ in return for massive discounts (think 25-45%). The catch is they can't sell them for 6m.
so the first thing they do is add them to their hire fleet and claim the vat back.
They then hire them out for 6m to cover interest payments, then sell them into the trade giving car dealers a good supply of nearly new cars
This is how car hire generally works, outside the 'niche' locations or vehicle types.They bulk buy cars with orders of 50+ in return for massive discounts (think 25-45%). The catch is they can't sell them for 6m.
so the first thing they do is add them to their hire fleet and claim the vat back.
They then hire them out for 6m to cover interest payments, then sell them into the trade giving car dealers a good supply of nearly new cars
The cars themselves are effectively free, the vehicle manufacturers want to sell new cars to keep the factories running so will offer them to rental fleets at a reasonable discount, often financed through their own banks.
There are also a massive number of people who say 'I'd never buy a new car' but will happily pay £1,5k below list price for a 9 month old ex rental example who will lap up the returned vehicles. The manufacturer doesn't have to throw in discounted finance or deposit contributions so the nett margin to them is the same as selling a brand new one.
The final nail in the coffin is the location you're in - the amount of hire car fraud in the big Northern cities is huge, think people hiring and taking the 'zero excess' option before ramming it into their mate's old Audi, cars being hired with credit cards which subsequently turn out to be stolen and the car not coming back, or parts being stripped as the car was 'stolen' while on hire.
Not worth the hassle I'd say...
I have got a small car hire business.
It's not a great sector to be in and Insurance Jon's vehicle resale angle angle above is a good one if you can order enough cars.
Other than that it's v difficult to make any sort of worthwhile profit on standard type cars. Some niche stuff does ok as do things like Luton Vans.
Cant see how you will make any decent money on Dacia and you don't even have the benefit of smoking round in a nice pool car.
It's not a great sector to be in and Insurance Jon's vehicle resale angle angle above is a good one if you can order enough cars.
Other than that it's v difficult to make any sort of worthwhile profit on standard type cars. Some niche stuff does ok as do things like Luton Vans.
Cant see how you will make any decent money on Dacia and you don't even have the benefit of smoking round in a nice pool car.
jamiebae said:
insurance_jon said:
Another angle, not sure it would work with Dacia's is being used to great effect by a local company to me.
They bulk buy cars with orders of 50+ in return for massive discounts (think 25-45%). The catch is they can't sell them for 6m.
so the first thing they do is add them to their hire fleet and claim the vat back.
They then hire them out for 6m to cover interest payments, then sell them into the trade giving car dealers a good supply of nearly new cars
This is how car hire generally works, outside the 'niche' locations or vehicle types.They bulk buy cars with orders of 50+ in return for massive discounts (think 25-45%). The catch is they can't sell them for 6m.
so the first thing they do is add them to their hire fleet and claim the vat back.
They then hire them out for 6m to cover interest payments, then sell them into the trade giving car dealers a good supply of nearly new cars
The cars themselves are effectively free, the vehicle manufacturers want to sell new cars to keep the factories running so will offer them to rental fleets at a reasonable discount, often financed through their own banks.
There are also a massive number of people who say 'I'd never buy a new car' but will happily pay £1,5k below list price for a 9 month old ex rental example who will lap up the returned vehicles. The manufacturer doesn't have to throw in discounted finance or deposit contributions so the nett margin to them is the same as selling a brand new one.
The final nail in the coffin is the location you're in - the amount of hire car fraud in the big Northern cities is huge, think people hiring and taking the 'zero excess' option before ramming it into their mate's old Audi, cars being hired with credit cards which subsequently turn out to be stolen and the car not coming back, or parts being stripped as the car was 'stolen' while on hire.
Not worth the hassle I'd say...
They had 10 m4's on launch day for hire
desolate said:
I have got a small car hire business.
It's not a great sector to be in and Insurance Jon's vehicle resale angle angle above is a good one if you can order enough cars.
Other than that it's v difficult to make any sort of worthwhile profit on standard type cars. Some niche stuff does ok as do things like Luton Vans.
Cant see how you will make any decent money on Dacia and you don't even have the benefit of smoking round in a nice pool car.
Will be a tourism model - in liverpool we have rickshaws, tuck tuks and until recently amphibious craft (that sunk) - we have Beatle tours, taxi tours and now we have cruise liners docking - I'm not the driving force on this but I will be involved to a degree - let's see what we can do.It's not a great sector to be in and Insurance Jon's vehicle resale angle angle above is a good one if you can order enough cars.
Other than that it's v difficult to make any sort of worthwhile profit on standard type cars. Some niche stuff does ok as do things like Luton Vans.
Cant see how you will make any decent money on Dacia and you don't even have the benefit of smoking round in a nice pool car.
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