I am planning to start my own online car rental business. I would like advice on the best way to begin and whether this business is still profitable today and what challenges I should be prepared for that.
It depends — not just on market demand, but on your readiness for what this type of business really requires.
The car rental market still has potential, especially if you serve a niche (for example, electric vehicles, premium cars for professionals, or short-term rentals for tourists). But profitability is much harder to achieve today because the entry barriers are higher than they appear.
Let’s be transparent about what you’ll face:
- Upfront investment: Even a small fleet of five to ten cars means a six-figure outlay before you generate a single booking.
- Depreciation and maintenance: Cars lose value daily, and you’ll need consistent servicing, insurance, and storage space — all adding recurring costs.
- Operations: You’ll need a legal structure, rental agreements, liability coverage, and a system for handling accidents, fines, and disputes. Do you have legal counsel and an accountant ready?
- Location and logistics: Where will customers pick up and return cars? You’ll need secure parking or a garage — that’s rent, permits, and personnel.
- Financing: If you need to raise money, be prepared to show clear differentiation and a path to cash flow within 18–24 months — investors are wary of asset-heavy startups.
So my advice: Before thinking of “how to start,” clarify why this business. What drives your choice — passion for mobility, market insight, or perceived profitability? Your reason determines how much risk and time you’re ready to absorb.
In my work helping entrepreneurs and leaders make purpose-aligned decisions, I focus on clarity and strategy before execution. Sometimes the smartest move isn’t scaling fast — it’s validating the model first, maybe through partnerships or a small proof-of-concept fleet.
If you’d like, let's test the idea against your goals, resources, and risk tolerance together — before you commit serious capital.
