How to Start a Car Rental Business in The Philippines

Purchasing a car in the Philippines is such a nuisance nowadays with the surge of gas prices and the tax for vehicles that cost less than a million. That isn’t to say that the traffic pile-up is worth maintaining a car as well!

Did you know that in every city in virtually any country has a car rental, that is of highly sought-after? There are people who land in the country and immediately search for the nearest or cheapest car rental they can get. However, this results in a competitive environment where businesses thrive!

Fear not! If you know what it takes to successfully run a rent-a-car business, you will find it a profitable venture to be in, especially when you know that the rent of a car eventually equals the purchase of one vehicle!

Learn the tools of the trade below to know what you need to do before starting a car rental business in the Philippines!

how to start car rental business in the philippines

Specify What Kind Of Car Rental Business You Will Be

There are actually two types of car rental business models. One is the daily hire. This means that your customers will rent a car for a specified number of hours. This type of model usually attracts tourists, business executives, and emergency breakdowns. As you may have guessed, they are usually short-term and based on immediacy.

The second type of model is the contract hire, where your customers rent a car for a specified number of days. This attracts companies, events, and other celebratory functions. They are made for people who plan ahead.

Register Your Car Rental Business

For any type of business, it is without a question required to be registered. For sole proprietorship, you must register with the Department of Trade and Industry (DTI). Doing the business by yourself would be relatively easy if you have the time to process yourself. This may prove difficult to find investors in your business and has an unlimited amount of liability.

For partnerships and corporations, you must register with the Securities and Exchange Commission (SEC). Choosing both of these options result in a share amount of capital.

Furthermore, you must also inquire with the Land Transportation Office (LTO) since you will be transporting passengers similar to other vehicles such as a jeepney, bus, and a taxi service. This will make you less likely to be taken to court in the case of accidents.

Purchasing A Fleet Of Cars

Do not be intimidated if you see the word “fleet”. Buying one or two cars is okay to start with if you do not have enough capital to purchase multiple. There are many companies that started as a single car rental business that eventually flourished into a corporate giant. Also, if in case you really want to buy more cars, you can go to the bank and ask for a loan. It is relatively easy as cars are used as a security.

Get Your Car Insured!

As you deal with the road, you come face to face with possibility of a vehicular accident. This might result with being sued! The liability you might incur will not only mean a loss to your business, it could even force you to sell your property.

It is always worth it to buy insurance that is comprehensive enough to cover all your cars. Additionally, you can sell insurance to your customers, by making them choose if they want their service to include or exclude insurance.

Maintain Your Vehicles!

Last but not the least, it is important to think of the cars as equipment. Keep using them and they will eventually break down. Not only do you have to pay big in case of vehicular breakdowns, they might even result into civilian accidents! Always regularly service your cars to avoid disasters such as this, and earn a better reputation from your customers!

Manage Your Cars Carefully

With a business such as a car rental service, you would need to be in good terms with your maintenance crew and car manufacturers, as you will always be needing them when emergencies occur! Having a healthy relationship with both of these aspects of your business means that you are able to get a discount for otherwise pricey repairs and even a recommendation for the best vehicle for the job!

Ideally, you would want to turn your one time customers into a regular and loyal client that would most likely put on a good word on your business reputation! Small things mean a lot for people, and taking care of your employees means taking care of your business. That means always being on top and updated of what is needed regularly on the back end of your car rental business, fixing all the nooks and crannies as soon as possible!




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