Even with the population in Nigeria, up to half of the population still does not have cars.
Due to the constant movement from one place to another, means of transportation are very much needed.
Therefore starting up a rental service is a very good business idea. No matter the number of cars available, there will still be a need for rental.
When one moves from one state to another, they do not often travel with their cars and will need rental service.
For that reason, we’ve carefully prepared this article to help you know how you can start a rental service from scratch.
How To Start A Car Rental Service
There are several steps you need to take if you want to start up a successful rental service. Below are some of them;
Explore Your Options
For you to start a successful rental service in Nigeria, you need to explore and know what you are in for.
You need to know the times that rental cars are in demand, the rules and regulations surrounding them, and also an estimate of what others in the business spent while starting.
You need to know those that have been there before you and the main competitors you might have in the business.
Lastly, you need to research their strengths and weaknesses, how they got the business to the level it is now, and how you can get your resources cheaper.
When it comes to rental service, location plays a very vital role. There are many things you need to consider when choosing a location.
Firstly, you need to check for the population density of the area you are choosing.
The area needs to have lots of people that will need a way of maneuvering the city.
Secondly, you need to consider the space around your location. You need to check if there is enough space for packaging.
Finally, you need to make sure there are a lot of engagements in the area. There needs to be companies and factories in proximity.
Choose A Suitable Business Name
Next is to get a business name that is suitable for a car rental service and is also easy to remember.
A good business name should be unique and memorable for a potential customer.
This will help for easy referral and marketing when the time comes.
Get Your Business Registered
After finding a suitable location next is to get the necessary certification to get your business licensed.
This will require a small fee from the Ministry of Transportation. They have locations in almost all states in Nigeria.
Therefore it is necessary to get one that is close to you and do the necessary registration.
Apart from the Ministry of Transportation, you will also need to get a license from the Federal Airport Authority of Nigeria.
You just need to research the necessary documents required for registration.
Buy Quality Cars
You will need good and affordable cars for this kind of business. Consider looking to buy Honda or Toyota products.
Also, add some luxury cars as some events might need something more classy.
For luxury, you can consider adding Lexus to your list. Make sure to get cars that are not just good on the outlook but also have strong engines.
The impression you make on your clients will determine how you survive the business.
Get Insurance For All Your Vehicles
We don’t plan for accidents or theft but it is better to be prepared at all times.
It would help if you got insurance for all your vehicles in case of theft or accident. This is a very crucial step in the car rental business.
You should research a reasonable insurance company that provides the best services to its customers at a reasonable price.
Hire Good Drivers
Make sure that all the drivers you hire are reputable drivers. That is, they have experience, are registered, and also take business seriously.
Do some background checks on these drivers by asking previous employers about their experience.
Also, try as much as possible to check for their criminal record in other to be sure that your customers are in safe hands.
Market Your Business
You are not the first to start a car rental service and as such, you have many competitors that started the business before you.
Technology has made things easier that more than half of the Nigerian population have one social media or the other.
Getting your business out there can be very easy with a small price.
All you need to do is to use platforms like Facebook, Twitter, and Instagram to frequently advertise your brand.
Aside from increasing your online presence, you can also print pamphlets, fliers, or handbills that will contain your business logo, services, and location and share them around.
This will also a long way in increasing your potential clients.
Get A Website And Mobile App
This is another good marketing strategy from other successful car rental service owners.
The internet now provides customers with many alternatives to choose from.
Getting your business as a website will give your business a chance to be among the options out there.
It will also help customers with easy access to your services rather than email or phone calls.
Estimated Cost Of Starting A Car Rental Business
Below is a rough estimate of the most needed things while starting up a car rental business;
If you are looking to use fairly used cars of brands like Peugeot, Toyota, Nissan, Honda, etc, then you should budget about N800,000 to N2.5 million.
But if you are going in for the whole high luxury kind, then you are expected to spend more.
Office Space And Furniture
Depending on the location of the office space and where the fleet of cars will stay, you might spend around N500,000 to N1 million a year.
The office furniture might cost as low as N200,000 since you are just starting up.
Depending on the number of people you reach out to or you instruct these online social media to reach out to during advertisements, you might spend up to N350,000 on marketing.
This covers the printing of fliers, pamphlets, etc.
Below are some frequently asked questions on car rental services and answers to them;
How Profitable Is A Car Rental Business?
Generally, the profit of a car rental service is 6% but with the right fleet car insurance policy, the right location, and more customers, you are expected to make more.
What Do You Need To Rent A Car In Nigeria?
If you are renting a car to drive it around yourself, then you are to provide a valid driver’s license.
Depending on the luxury of the car, you might be required to provide more.
What Is The Basic Rate In Car Rental?
The rate determination is measured by the “base rate” of the vehicle, and will not include taxes, fuel, surcharges, or any other ancillary charges.
The car rental service business is a good business to start in Nigeria because not all locations in Nigeria have these services and the competition is still very low in some locations.
But it requires lots of research and planning to avoid the business being a flop just after starting it.
This article on how to start a car rental service in Nigeria has provided lots of answers to most of your questions.