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!

37 responses to “How to Start a Car Rental Business in The Philippines”

  1. Joel Abanador Gavino says:

    Thanks for all the informations that youve shared.

  2. Najebb Miranda says:

    Thank you for these important bits and pieces of how to get down to car rental business. They are useful.

    Thanks and God bless.

  3. jim says:

    Hey I tried to ask around here in Davao, DTI and Dept. of Tourism said in order for you to get approved for permit to operate, you need at least 10 cars that are at least 6 months old or newer. I would like to ask further specific details how you can register it legitimately with only a handful of cars like 2-3 units at first.

  4. Игорь says:

    Thanks! Very useful!!

  5. Renato C. Favila says:

    Please advise if there is a role of LTFRB in Rent a Car business.

  6. Haiz says:

    Hi, do you need LTFRB franchise if rent a car self-drive only? Thank you

  7. elmae Mercadillio says:

    Sir may i ask panu po ako makapagstart ng business as a rent a car 1unit lng po ung sasakyan ko. mayron na po akung dti. Gusto ko po sana ipabusiness as a rent a car ung sasakyan ko po. Panu po sir

  8. Yow says:

    Thanks. An start in one unit will later become many.

  9. Moreno Clarite Jr says:

    nice tips sa kagaya kung newbie sa business..God bless po..

  10. I want to start with one unit on rent a car business how much could i spent to complete all the legal documents

  11. My husband is a member of a cooperative/corporation where the business is solely a VAN FOR RENT.
    MY question is, IS he still entitled to ask a business permit for his personal VAN FOR RENT business using the same VAN registered in the cooperative/CORPORATION? THANK YOU SO MUCH SIR/MA’AM.

  12. Jade says:

    Hello, thank you for all these. Very informative.

    Does LTFRB have a minimum for the number of cars for the startup?

    I am planning to start with just 1. Is that okay?

  13. Joselito F. Dolorito says:

    I do have 2 brand new cars Vios and Hundai and a sportivo 2018 model and one cargo izuzu fb type. I wish to earn money out of them. Can you help me convert my liabilities assets to profitable
    business like vehicle for hire.

  14. Joselito flosa says:

    Kailangan po ba kung sino ang owner ng vehicle siya din ang kailangan na mag apply para sa mga requirements ng rent a car buiseness?

  15. Mj says:

    Good day! Paano po mg register dto for 1 unit pwede po ba? If yes, paano po mgapply ty

  16. Pentrasco catanauan says:

    Good day! Kami Po ay coop. Problima hirap nakuha Ng prankisa, Ang mga unit Po namim ay van, pwide pobang Tayo namim ay rentavan nalang Po. Ty

  17. GERARD says:

    I already registered my business with DTI? What do I need to check with the LTO?? They are telling me to go to LTFRB to get a franchise, is that necessary?

  18. Rodolfo Calma says:

    Sir paano po ba mag apply ng rent a car business meron po ako 1 unit Hyundai Accent 2020 model.

  19. Ronelo C. Fernandez says:

    if you have tie-up agreements with existing rent a car company. do LTFRB franchise documents is needed for this self drive rent a car services?

  20. Frances says:

    Ano mga requirements para makakuha ng rent a car permit? Na may recibo po? Isa lang po sasakyan namin. Thank you.

  21. RentALL Cars says:

    Renting a car for an official or personal is most common in many metro cities around the world, In the past few years, it has a unexpectable growth because of the introduction of mobile apps to rent or schedule a car quickly within a few taps on the mobile phones. The online car rental system disrupts the conventional way of renting a car.

    If anyone planning to launch a car reservation software for your startup or transform your business online, it would be the right time for the launch. Many readymade solution providers available out, You can reach them and purchase the solution and add or remove the features as you want.

  22. Jhanelyn Tamayo says:

    Hipo hulugan po kasi van nmin so naisip ko e e van for hire nlng or rent a car. Para mka pagbyad ng monthly. Ano po ba dapat kng gawin thnks in advance sa magrreply po.

  23. Good day po.unit po nmin ay g4 mirage 2019 inaplay po nmin sa owto d nman po ntuloy dahil sa lockdown. Bka meron po kayo mapasukan ng unit nmin pghulog man lg sa monthly amor. Thank you po.

  24. Francisco Jr. Hidalgo says:

    Same here, 1 unit lang po yung sakin.. is there any chance na makapagapply nang rent a car business.. meron po akong isang unit nang Toyota HIACE 2019 model

  25. Rodrigo Gozun says:

    In your explanations and requirements LTFRB was not mentioned … Why Enforcers are appehends as such…. Asking for franchise … 1st its not individual paying passenger/s like PUVs people contract and pay as a whole so…. whats gonna be the problem and why until this time is not resolve

  26. Luisito V. Sequitin says:

    gusto ko sana mag start with one car. paano ba ang mechanics nito para pag inilabas ng renter ang kotse ay insured ito sa kanyang pangalan at siya din ang mag ba bayad nito?

  27. Ragnar says:

    Mam Ma.Evelyn Reyes, I’m interested with the cooperative your husband’s in. Can I join? I want my van to be a legit Van for Rent.

    Thanks po!

  28. Elmo simor says:

    1 unit lang po sa akin nv350 2023 model. Paano ba maka pag apply for rent a van business.

  29. Ryan Raguer says:

    Need pa po ba kumuha ng business permit ng 1 unit na balak ko ipa rent..

  30. Johny Q. says:

    Patulong or advice po naman paano makakapag simula ng rent a car business, im just ordinary citizen lang po and i have no enough money to buy 1 unit.

  31. Miyaka says:

    Need help, I have fleet of cars already na nakapasok sa rent a car. 7 sedan & 1 SUV. I want to start on my own. How to start po ba what need gawin?

  32. Third says:

    After June 30 2023 LTFRB accepts only vehicles 2023 yr model lang po. Para makakuha ng franchise sa ltfrb minimum of 10 units. Makaka join lang po kau sa corporation or cooperative. May mga units din ako suv and van nakapasok sa transport na may award sa Airport doon po legal kaso bukod sa ltfrb dadaan din cya sa DOT and DOTR tawag Nila dun tourist transport and maganda ang kita hndi pa bugbog ang sasakyan

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