Need Help - Car rental

[bashir26]

Hi,

Me and a business partner want to rent out luxury cars (BMWs, etc). We have all the insurance stuff figured out, but the issue is business location.

We have two of the following options:

1. To start the business out of our garage.
- Pros - Cheap and don't have to worry about making lease payments if business falls through.
- Cons - Unprofessional.
Extra notes
- If we did start the business out of the garage we would also do delivery for free or they can just come pick it up. Orders would most likely be placed online, or over the phone.

2. To get a location leased.
- Pros - very professional and you actually have a 'work place' that you can go to. Customers can come in anytime to look at our fleet.
- Cons - Expensive (funds aren't HUGE since we are both students!) and tough to find commercial real-estate leasing on a month to month basis. Also the lease would probably eat up profits initially until we have a good customer base.

So my question is - if you were opening a car rental business how would you start; from your garage, or a good business environment location?

discuss, and thanks!

 

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[bashir26]

Well we would start with 1 car (our own). We came up with the idea because we wanted to rent out a Mercedes S-550 and found out that luxury car rentals in Calgary doesn't really exist. Yes there are some companies, but the prices they charge are way over priced.

We also have the idea of renting out Motorcycles such as a Yamaha R6, Honda CBR 600RR. The issue with bikes is its a seasonal thing from April - November, December. We have the insurance information figured out, but the issue is

Will people want to rent out anything from somebodies garage from superbikes to bmws.

 

[camski]

I would use your obstacle as a competitive edge. I would take pictures at a high end looking location but then like you mentioned offer free delivery. Sure it might hurt your profit margin but it is easier to shave off margin than to pay expenses with money you havent earned yet. If you have a website you would absolutely want to make sure that it looks very high end. I think what you need more than a location is a fleet of more than 1 car.

 

[Scout]

Could you list other high end vehicles with tags like "Available Soon" on your web page, or when you go into the availability section of the web page it comes up with a "reserved" or "unavailable response" and then directs them to the 1 car you have for the dates they have selected. Creating the feel of a larger company front and then as you grow you can populate more vehicles. This is not lying because the cars are truly unavailable because you don’t have them.

Does anyone see anything un-ethical in this approach?

I like the free delivery, customer service is king, just make sure when you deliver the car you "walk and talk" the part of a high end car dealer, so you don't look like college kids who just lifted the car. You may need a second reasonable luxury car or classic car to do the delivery to keep the front up.

You want to grow repeat customers so first impressions are key...
:fastlane:

 

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[LightHouse]

Well we would start with 1 car (our own). We came up with the idea because we wanted to rent out a Mercedes S-550 and found out that luxury car rentals in Calgary doesn't really exist. Yes there are some companies, but the prices they charge are way over priced.

My "common sense" advice would be to research more on this.... typically there is a reason for this. Do you know there is even a market for this? Do you have a client base ready to rent cars when you start up or are you planning on buying cars and sitting on them waiting for renters to discover you?

Do you know the prices are just too high, or are they high because the low amount of renters and the high cost of maintenance and upkeep on luxury cars that people will obviously not be taking that well care of as its a rental.

 

[bashir26]

Could you list other high end vehicles with tags like "Available Soon" on your web page, or when you go into the availability section of the web page it comes up with a "reserved" or "unavailable response" and then directs them to the 1 car you have for the dates they have selected. Creating the feel of a larger company front and then as you grow you can populate more vehicles. This is not lying because the cars are truly unavailable because you don’t have them.

Does anyone see anything un-ethical in this approach?

I like the free delivery, customer service is king, just make sure when you deliver the car you "walk and talk" the part of a high end car dealer, so you don't look like college kids who just lifted the car. You may need a second reasonable luxury car or classic car to do the delivery to keep the front up.

You want to grow repeat customers so first impressions are key...
:fastlane:

Yes I completely agree that customer service is key and the business will be based on customer loyalty, because without customers there is no business. Having said that I think it is immoral to list cars I do not have because I'm not being faithful with the customer with my current stock. There's only so much I can say when they keep asking to reserve the same car over and over again!

My "common sense" advice would be to research more on this.... typically there is a reason for this. Do you know there is even a market for this? Do you have a client base ready to rent cars when you start up or are you planning on buying cars and sitting on them waiting for renters to discover you?

Do you know the prices are just too high, or are they high because the low amount of renters and the high cost of maintenance and upkeep on luxury cars that people will obviously not be taking that well care of as its a rental.

Good point research is key in any venture. We are still currently doing as much research as we can before we jump into this. I currently do NOT have a client base with luxury car rentals, but I have several people interested in motorcycle rentals. Costs would be expensive at first with motorcycles since you since you have to buy cash for the bike, but you can make up that money easily by renting a bike at $50/day including gear/insurance rates everything. Insurance to rent out a bike at full coverage is less than $6/day. So insurance costs are not that high.

I would use your obstacle as a competitive edge. I would take pictures at a high end looking location but then like you mentioned offer free delivery. Sure it might hurt your profit margin but it is easier to shave off margin than to pay expenses with money you havent earned yet. If you have a website you would absolutely want to make sure that it looks very high end. I think what you need more than a location is a fleet of more than 1 car.

I recently asked a luxury rental car owner on his thoughts on keeping costs down by opening a rental shop from your garage. He told me that with rentals costs are very high so anything to keep your costs down is a plus. He said starting from your garage is not a bad idea, but I would need a kick a$$ website and excellent service to make up for it.

Thanks everyone for the replies. We got some really excellent points here.

What are your thoughts about a motorcycle rental business? Where you can rent Yamaha R6s, Ducati, Triumph Daytona all for around $50-70/day including insurance, gear, mileage?

Thanks:fastlane:

 

[Scout]

Having said that I think it is immoral to list cars I do not have because I'm not being faithful with the customer with my current stock. There's only so much I can say when they keep asking to reserve the same car over and over again!

I was leaning to that side but figured I would throw it out to hear peoples thoughts. The "available soon" may still be a good approach because you are acknowledging the fact that you do not have the car, and it may be a good way of surveying interests for what the next car to add should be.

Good Luck

 

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[camski]

I was leaning to that side but figured I would throw it out to hear peoples thoughts. The "available soon" may still be a good approach because you are acknowledging the fact that you do not have the car, and it may be a good way of surveying interests for what the next car to add should be.

Good Luck

I think I would build my fleet of 8-10 cars that you know (after doing your research as others have suggested) will move and then instead of offering an "available soon" tag put a "what should we add" part so your customers could stter you towards the kind of vehicles that would rent more often.

 

[White8]

I'll second the need for a very nice professional office to appeal to the type of customer you want to attract that won't destroy your cars.

You might also look into something that is common in the aviation world- a private leaseback. The way leasebacks work is an owner or owner group makes the airplane(car) available to the business to rent to qualified users at an hourly rate or in the case of cars by the mile. Typically the owners who would be interested are those who don't use it all of the time and would like some help paying the loan and upkeep. An example may be someone who keeps a car at a vacation house and uses it a month out of the year. As I said, it's common in aviation but I don't know how well it would work with cars

 

[tchandy]

Bashir26,
Have you thought about taxes? I know everytime I look up a price online to rent a car I say that looks pretty reasonable. After I rent the car and return it I get bombarded with taxes that pumps up the price an extra $100 to $200. Would your business have to pay similar taxes as well?

Tom

 

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[Salinger]

What are your thoughts about a motorcycle rental business? Where you can rent Yamaha R6s, Ducati, Triumph Daytona all for around $50-70/day including insurance, gear, mileage?

Maybe I'm a bit overcautious, but I'd be really concerned about potential liability on renting high-performance motorcycles. Make sure you're very well protected legally and well insured. Just because a customer has a motorcycle endorsement on his license that does not necessarily mean he's capable of safely riding one of these bikes. How do you check this out? I realize there's potential money to be made with this, but I would put a lot of thought into this aspect and how you avoid sending your client out on a bike he's not ready for.

 

[Salinger]

To increase your "fleet," perhaps you could go to the dealers of some of the cars you want to offer and pre-arrange a lease or purchase deal that would give you access to the car (same make and model) within 24 hours. I guess the problem is, once you rent it once you are committed to paying for the car whether you have another renter or not.

Have you figured out how many days a month you would need to rent a car to cover payments and incremental expenses?

 

[bashir26]

Maybe I'm a bit overcautious, but I'd be really concerned about potential liability on renting high-performance motorcycles. Make sure you're very well protected legally and well insured. Just because a customer has a motorcycle endorsement on his license that does not necessarily mean he's capable of safely riding one of these bikes. How do you check this out? I realize there's potential money to be made with this, but I would put a lot of thought into this aspect and how you avoid sending your client out on a bike he's not ready for.

Very true. Motorcycles is not a easy business to venture in since there is a huge safety issue. But then again there is a safety issue when you want to do various things in life that are exciting. Lots of companies that are not safe, or sell products that could risk death always make you sign a waver (paintball, sky diving, snowboarding, etc). I spoke with my insurance agent and they do not cover motorcycle rentals. Actually several insurance companies do not even have plans for them. But I found 1 company that does it, and its a fairly large company. They worked out the details and it is possible to rent out motorcycles at a very cheap cost. They would cover pretty much everything (I don't think they would cover death, because I would need an iron solid legal/waver form).

Bashir26,
Have you thought about taxes? I know everytime I look up a price online to rent a car I say that looks pretty reasonable. After I rent the car and return it I get bombarded with taxes that pumps up the price an extra $100 to $200. Would your business have to pay similar taxes as well?

Tom

I noticed that lots of rental companies charge WAY much than they should for cars. I can understand the reason for the high pricing because they don't always know when someone else is going to rent from them, but still they always have shady high costs to rent out a car. What I want to build is a company that is not cheap, but affordable to rent out cars that you want. So for a short answer, No, I will not have hidden taxes. Just one fixed price for everything (except for KM on some cars).

I'll second the need for a very nice professional office to appeal to the type of customer you want to attract that won't destroy your cars.

You might also look into something that is common in the aviation world- a private leaseback. The way leasebacks work is an owner or owner group makes the airplane(car) available to the business to rent to qualified users at an hourly rate or in the case of cars by the mile. Typically the owners who would be interested are those who don't use it all of the time and would like some help paying the loan and upkeep. An example may be someone who keeps a car at a vacation house and uses it a month out of the year. As I said, it's common in aviation but I don't know how well it would work with cars

I don't know exactly how lease-backs work, but I'll do some more research on it.
A friend of a friend owns a pretty well off garage in a good location in the city. He is willing for me to store my cars/bikes there until business picks up and I can get my own location. Did i mention he's doing it for FREE. so that takes care of that!

Have you figured out how many days a month you would need to rent a car to cover payments and incremental expenses?

Lets assume I was renting out a BMW 335i. The lease on that car is $650/month. Now assume I rent out a 335i for $150/day (throwing numbers out there) I'll have the money to pay the lease in 4 days to lease and on the 5th day I'm already making money on the car.


My grand Idea is to initally start this business as a summer business. Rent out motorcycles and see how that goes. If that goes well and I build a good customer base I want to move onto renting bikes and renting out luxury cars at affordable prices. Prices that anyone is able to rent out a luxury car.

Thank you very much for all the tips and criticism. I really love this website.

 

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[PaulRobert]

Well yesterday I was on the highway and saw a convoy of a F430 coupe and spider, an Aston Martin DB9, Bentley Continental GTC, and a Maserati Gran Turismo. The reason why I am stating what I saw was because these were rentals from Gotham Dream Cars. I thought back to this thread and supplied this video about how Mr. Noah Lehmann-Haupt started up his company.

Living The Dream - FOXNews.com

 

[bashir26]

Well yesterday I was on the highway and saw a convoy of a F430 coupe and spider, an Aston Martin DB9, Bentley Continental GTC, and a Maserati Gran Turismo. The reason why I am stating what I saw was because these were rentals from Gotham Dream Cars. I thought back to this thread and supplied this video about how Mr. Noah Lehmann-Haupt started up his company.

Living The Dream - FOXNews.com

Thanks for the link to the video. It was very motivating.

I actually spoke with Rob (one of the owners of Gotham) and he gave me the same advice that I found on this forum.

All I have to do now is take action.

 

[jai02]

London Airport Taxi

Hi,

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If any one wants London Airport Taxi Cab Transfer Service than they should try this link. They Provide very good service

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Thank you

 

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[Runum]

Re: London Airport Taxi

Hi,

I had recently travelled to london for a holiday and i booked Airport Taxi transfer service with Hummingbird Cars

If any one wants London Airport Taxi Cab Transfer Service than they should try this link. They Provide very good service

Highly Recommended

Thank you

Welcome to the fastlane jai02. You can't post a link until ou have had a minimum number of posts. Your first post here should have been a non promotional introduction of yourself in the appropriate forum.

Introductions & Networking - Millionaire Entrepreneur Forum

Your email and IP address are listed on the IP ban lists. At this point I think you are a spammer as well. You have the chance to prove me wrong now. If you attempt to post links to the forum they and you will be removed from the forum.

I hope you stick around but we are not your customers.:cheers: