Those who know the rewards don’t question the idea of investing in a car hire business. While there are some risks to watch for—putting your car to work can be especially rewarding in the longer term.
If the business is run properly, there’s almost no risk of property loss, except some minor damages that often occur even if you were driving the car yourself. The usual tear and wear, and some scratches that any car owner is always aware about.
Most financial investment consultants are advising on more shares in a car rental business as opposed to taxi, or Uber investments. This is due to the lower returns, and greater tear and wear costs that are currently being experienced by those who invested their cars on Uber business.
While some are often looking on the downside of investing in a car hire business, the risk takers, and the smart car hire agents are banking some hot cash from taking the risks. But there is always more to it than just taking all the risks. Understanding the kind of risks involved is always critical to decision making.
Risks of Investing in a Car Hire Business and How to Avoid Them
For obvious reasons, potential car owners who are often looking to invest in a car rental business are best advised to think 3 times before ignoring any of the requirements that car hire companies often ask for. Such requirements include but are not limited to comprehensive insurance cover, car tracking device with cut-off oil feature among other things like documents of approval of ownership.
Essentially, these requirements are always only meant to safeguard rental cars against risks like property loss, collision among other damages. To give you a better view of the types of risks involved in car hire business, I have identified the main risks, and explained how we avoid them to run a successful car rental business.
1. Collision and damages. This is one of the most obvious risks that any car hire agency is occasionally dealing with. But it’s also one of the easiest to eliminate, if not, to reduce. At Royride Car Hire, we deal with this risk by vetting our clients. And we don’t give cars to drivers with less than 2-years of experience, or persons below 23 years of age, or above 70 years.
Equally, before renting out cars to clients, we often ensure that we both examine the car to identify any possible defaults such as body scratches, broken mirrors, broken windows, features that are not working, or any other issue that needs to be identified in the car hire contract agreement.
2. Property loss or theft. Some car rental agencies have had a good share of the risks of loss, or theft of a rental car. Although we have been trying as much as possible to curb the chances of renting cars to clients who have interests of stealing, or disappearing with rental cars, this risk remains to be most impactful, and the lowest of all other risks to be encountered by car hire companies.
As part of the vetting process, we always demand for copies of our client’s personal documents like their national identification cards (ID), driving license with over 2-years of experience, KRA pin certificate, valid good conduct certificate, and a clear photo showing their face.
3. Exchanging parts of the rental car. When it comes to caring for our partner’s properties, no stones will remain unturned. And while there are a couple of other things to worry about, the case of exchanging the parts of a rental car recently came to our attention.
We heard a colleague from a rival company complaining about their new car wheels being exchanged with some worn-out tires. This is the most annoying thing to encounter in a car rental business—but you almost won’t hear or encounter it. To curb such a risk, though, we often carry on with our routine vehicle check before handing over the car keys to the client.
Also, we record the status of each vehicle part, and take photos of certain parts—including the wheels in this case. Our vetting, and approving process, however, have so far proved to be especially effective, and much helpful when it comes to protecting our company cars, and a partner’s property.
Advantages of Investing in Car Hire Business
Just like there are some risks to be considered before choosing to invest in a car hire industry, the advantages of investing your car in a rental business are plenty. To name a few, you can put your car for rent to recover all, or part of the costs you paid to own the car, you can take it as a side hustle to generate some income you can use to settle some bills, make it as part of your retirement plan.
Some people who want to own a car but don’t have enough money to pay the full price are also taking it as a chance of owning a car overtime. They go for the bank asset financing option, things like mogo loans, or hire purchase from the car dealers themselves.
As a company that cares about their potential partners, we often ensure to provide enough business for all our partners to ensure they are having a smoother run with loan repayments. In addition, we also take good care of the cars, not only because we care so much about the owners but also because we care about providing our clients with fresh and mechanically sound vehicles for their hiring needs.
Requirements of Investing in a Car Hire Business
What are the requirements if you want to invest your car in a car hire business? Firstly, you need to have a mechanically sound vehicle—preferably a new car if you can get it. In this business, news cars are the hot deals—and anyone who brings a new car onboard is rewarded with the most jobs as many clients are often looking, and willing to pay for the next best thing car hire.
However, if your car isn’t new but it’s still in good condition, it will still be able to earn you some good money—you won’t even see the need of starting with a newer car. But it’s critical that we also advise on the minimum age of vehicles that we are taking.
We care about our brand, and as such, we are only looking for, well, almost new cars. Be sure to message us on WhatsApp, and include clear photos or your car interiors, and exteriors for further approval if you want to partner with us.
Some other basic requirements include a comprehensive insurance cover, proof of ownership or a signed proof that shows the original owner of the car has granted the permission of investing their vehicle on car rental business. We also expect you to have a KRA pin certificate, certificate of good conduct (not very necessary), your copy of your national ID card, and car tracking device login info.
For more information about the vehicle onboarding processes, kindly reach our operations manager here +254 791 174 592, or send an email at firstname.lastname@example.org.
Type of Cars That are On Top of Our Search List
Although we are looking to expand our business by adding several different types of cars to the fleet, we are looking for hot cars in the car hire business. With that said, the following list of cars will tell you exactly what we are hoping to find.
- Standard 5 seaters: Toyota Axio, Fielder, Premio, Nissan Teana, Nissan Juke
Offer: KES 3000 per day, per hire. Contact type: Paid per hire contract.
- Small cars: Honda Fit, Insight, Fit shuttle, Mazda Demio, Nissan note, Nissan Tiida, Mazda Axela
Offer: KES 2500 per day, per hire. Contract type: Paid per hire contract.
- Mini SUVs: Rav-4, Xtrail, Harrier, Suzuki Escudo
Offer: KES 4000 per day, per hire. Contract type: Paid per hire contract.
- Mini Vans: Toyota Noah/Voxy, Nissan Serena, ISIS
Offer: KES 4000 per day, per hire. Contract type: Paid per hire contract.
- Luxury Cars: Toyota Crown, Mark X, Nissan Fuga, Nissan Skyline
Offer: KES 3500 per day, per hire. Contract type: Paid per hire contract.
Additionally, with our current type of contract, you’re only required to provide the car whenever there’s a job. In other words, you keep your car until we call with an offer. Also, you can choose to accept, or decline an offer. Accordingly, you’ll be required to handle all transactions, and send our commissions within an hour after you have handed the keys to the client. Feel free to contact Royride for more info, and further inquiries.