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How to build a fleet of cars for a car rental business

Learn how to build a fleet of cars for your car rental business with five proven strategies. Discover how to partner with local rental companies, leverage car rental APIs, explore peer-to-peer and franchise models, or opt for a lease-to-rent approach to scale your operations.

Reading time - 7min read
Date - 22nd November 2024

In this article we look at how you can build a fleet of cars for a car rental business.

We will cover five main ways that you can build your fleet of cars. 

These include:

  1. Partner with local car rental companies
  2. Use car rental APIs
  3. Operate a peer to peer model
  4. Franchise model
  5. Lease to rent model

1. Partner with Local Car Rental companies

First up, to build your fleet you can tap into existing fleets by partnering with local rental companies. This allows you to seed your marketplace with high-quality vehicles without having to own them.

Car rental companies will be happy to list on your site if you can bring more visibility to their fleet. The benefit of this approach is that, because you can list inventory on your site, this will immediately allow you to jump into driving demand for cars listed on your site. This allows you to get more familiar with the sales process and start generating revenue for your business.

This strategy is used by platforms like Booking.com who own rentalcars.com This platform has created a single landing page for Local Car Rental Companies which advertise the chance to check demand in a particular area. If there is high demand, the car rental companies will then Booking.com will reach out directly.

The downside to this approach is that it requires more upfront development cost. This is because you will need to integrate your site with local car rental companies. Below is a screenshot of a website called MoMondo. As you can see this site integrates car rental companies who offer fleets in Montreal, Canada. This includes Economy Bookings, Priceline and Hertz.

2. Use Car Rental APIs

Similar to partnering with local car rental companies, you can also integrate with aggregator platforms like CarTrawler or Rentalcars Connect to access car rental inventory from established companies around the world. These platforms offer access to their rental car inventory through APIs. 

These aggregator platforms function in a similar way to how BedBanks function in the flights, hotel and tours space. The aggregator provides a clean set of data that you can access however, they do not own the cars. Instead these systems plug into local car providers and Global Distribution Systems (GDS) like Amadeus, Sabre and Travelport. The aggregator will then clean up the data and give you a one stop location to plug into in order to get all of the local car inventory. The image below shows how this works.

If you plug into an aggregator, you will need to pay a fee for each car that is booked through their platform. This fee will be higher than if you plug into the GDS or local car rental company directly. However the development effort required to integrate with the aggregator is less than if you need to integrate with all of the individual local car rental systems or GDS directly.

3. Peer-to-Peer Models

Car rental marketplaces like Turo and GetAround pioneered a peer to peer rental model for cars. This method allows individual car owners and local car companies to list their cars on these sites. Individuals will then connect individual car owners up with people who want to rent out these cars. 

Building a peer to peer car rental marketplace requires that you find car owners who are willing to list their cars on your site. This model for car rentals is now well established however, you will still need to convince individuals that your platform is a safe place for them to rent their cars. The peer to peer approach to car rentals is highly scalable, it helps with inventory diversification and can grow really fast with network effects.

4. Franchise Model

Similar to the peer to peer car rental model is the franchise model.

In this model you will invite car owners to upload their cars onto your application. However, different from the p2p car rental model, the franchise will be required to follow strict operational guidelines. The franchise will also pay you money in order to list on your platform. In exchange for this payment they will expect to get things like exclusive benefits such as access to your branding, marketing tools, and customer base. They would also receive ongoing support in terms of technology, like software updates and customer service integration, as well as detailed operational guidelines to maintain quality and consistency across all franchises.

Unlike the P2P model, where individual car owners manage their vehicles independently, franchisees are more like business partners who invest in maintaining the brand standards and enjoy more structured support. In return, they expect more control over their fleet’s visibility on the platform, exclusive local rights, or better commission rates for bookings.

5. Lease-to-Rent Programs

Last on our list is the lease-to-rent program.

A lease-to-rent program is a business model where a company leases vehicles (usually long-term) from car manufacturers or leasing companies, then rents those cars out to customers. In this model rhe marketplace or rental company leases vehicles, so they don’t fully own them but have control over their use during the lease period.

In this model the rental company pays for the leasing fees to the leasing company or car manufacturer. The business then earns revenue by renting out the cars. There’s an upfront cost to lease the cars, but this model avoids the large expense of outright purchasing vehicles. Profits come from the difference between rental income and leasing fees, plus the cost of operating the fleet.

Hertz or Enterprise might lease cars from manufacturers and then rent them out to customers.

Conclusion: 5 ways to build your car rental fleet

These are 5 ways that we have seen car rental businesses grow their fleet of cars.

At Dittofi, we help startups, scale ups, SMEs and enterprise development companies build enterprise grade technology 10x faster than traditional coding.

We do this with the use of our hybrid no-code platform that allows you to build quality software without coding. We then translate all of your designs into enterprise grade code that you can access, edit, customize and own.

If you want to build a car rental solution for your hotel, travel agency, car rental business or any other business, feel free to schedule a call with one of our specialists.

If you are a startup, you may also be interested in our Launch a car rental business in 30 days program where we help you build and launch a car rental business without coding in just 30 days.

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