Rent A Car Business In Pakistan

Rent a car business is one of the smart business models, and it's getting bost in all over the world, including Pakistan. In the car rental business, the Owner rents his/her car for a short period, generally for a few days or weeks.

On the other hand, there are many agencies or platforms where one can rent his/her vehicle in response; they charge for finding customers for you. Car rental companies mainly serve individuals who need a car temporarily. For example, people who do not own their vehicle, out-of-town visitors, or owners of damaged or disabled cars awaiting compensation for repairs or insurance need rental cars.

In Pakistan, there are many platforms where you can rent your car in a much simple way, and one of them is known as Uber. There are numerous options provided by many companies in Pakistan. Renting your vehicle every month is one of the choices open to you. Bases on a short-term contract, this would leave space for you to take your car back. On the other hand, if you want to give your vehicle up for a long-term deal, you will have to part with your car for a long time.

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Requirements to rent a car

Before opting for any travel agency or organization, make sure you conduct thorough research. You should not proceed with renting your car until you find a successful car rental company of your choice. However, to rent your vehicle to travel agencies or businesses within Pakistan, certain conditions need to be met and the details you need to remember. These conditions are as follows.

Condition of vehicle

Your car's condition is of paramount importance. On a rental basis, all businesses or travel agencies rarely take the car in poor condition. Before renting it out, you should take your vehicle to a mechanic.

Your Profits

A contract that ensures the recipient of a certain fixed amount then has no room for explanation. According to the contract, the amount you will receive is plain and simple, either by the specified period, such as each month. There are certainly other types of agreements, however, which affect your earnings. An example would be that you provide your vehicle and driver to the company. You can get up to 75 percent of the driver's revenues in this case. But the driver's income will vary as per the hours of driving he does.

Always rent your car if you think the contract will be profitable to you after paying for the vehicle's depreciation cost and maintenance cost.

Agreement

In Pakistan, the type of agreement you sign up for depends entirely on your car's availability and demand. Three types of arrangements are commonly offered. These are:

Weekend: The weekend agreement includes only Saturday and Sunday and is known as a part-time earning agreement.

Short-Term: Usually, a short-term agreement includes a period that lasts from a few weeks up to one year. The term may vary as per the requirement of both parties.

Long-Term: A long term agreement is for a term of more than one year. In this contract, both the parties agree on maintenance and other costs incurred on the vehicle during the contract term.

Security of car

You must be aware of the risks that your car might face. For this purpose, before renting it out, you need to get your car insured. Many well-known Pakistani insurance companies can help you with additional procedures. The travel industry is also flourishing in the north of the country, with security concerns improving in Pakistan. Therefore, renting out more cars has become a company of its own. You can now easily make a little extra money as tourism in Pakistan is increasing. But before sending your vehicle far from you, get it insured first.

Rental condition

 Car rentals are subject to several situations that differ from one nation to another and from one organization/company to another. The vehicle must usually be returned in the same condition as it was leased. It must also not exceed the mileage cap, or else the company will pay some additional charges. In Pakistan, the driver must have a driver's license, so the rental company should ensure that the driver has it.

Many car rental companies permit the use of a credit card to incur extra charges in terms of road tolls, monitoring-related fines, or lost fuel. Some businesses/companies need a significant cash deposit in place of a credit card. Some businesses, usually with evidence of a round-trip travel ticket, e.g., an airline, bus, or train ticket, allow a debit card for deposits.

How Rental Car works in Pakistan?

Car rental companies operate by buying or leasing several fleet vehicles and renting them to their clients for a fee. Anyone can form rental fleets in several ways. You can be own them directly by buying them from the manufacturer. It is risky because you don't know for how much the car will be sold when you take it out of the contract. In contrast, you can also enroll yourself in the manufacturer's guaranteed buy-back programs.

In Pakistan, rental car agencies also have relations with second-hand car dealers. So they sell the ex-rental cars to the public through these dealers and buy new cars for rental purposes.

Car rental rates vary according to the quality of the vehicle and the location. The low end of car rentals, such as the Mehran, generally cost around 1000 to 1300 PKR a day. In contrast, upscale rental cars such as a Honda, Civic, or a 4x4 vehicle can earn up to 3000 to 5000 PKR or more a day.

If you have an optimal location, a diverse fleet of vehicles, and competitive rates, your car rental business can rake in cash. In the first few years, it is possible to make 1 Million to 3 Million PKR. After that, continue to grow your company, and eventually, you will make huge profits. Expand across the region and nation, and you can make millions of Rupees per year by your car rental business.

Expenses for a car rental Business in Pakistan

There are two types of business expenses in the rental car business. We will discuss both of them in detail here.

Small-Scale expenses

Continuing expenditures include wages, utilities, insurance, the addition of new car to the equipment, fleet repairs, leasing of office/parking lots, high-speed Internet marketing, and maintenance of the website. Employees at the lowest level will earn between 500 to 1000 per day. An on-site mechanic will demand a 20,000 to 30,000 salary per month.

If you bring a marketing professional on board, he'll demand a 30,000 to 35,000 monthly salary. For an accountant and web designer, the same salary rate applies. To protect your company and the vehicles, insurance is necessary—budget for this expense of at least 10,000 to 15,000 per month.

There will be several thousand rupees per month for utilities, including high-speed internet and electricity bills. Depending on how many clients you have, servicing your fleet of vehicles will probably cost between 5000 to 10,000 or more per month. For website improvements, allocate at least 10,000 or more per year and around 5000 or more per month marketing budget.

Large-Scale expenses

Vehicles will be added to the fleet, or you can buy them on lease. Anticipate adding a new car every few months, and for such a purchase, always have at least 1 Million PKR or more on hand.

Evaluate this expense over the year, and if bought outright, new additions to the fleet would likely cost millions of rupees a year. 

The process to rent out a car

In-country like Pakistan, one is not bound to go through the whole process of renting a car as compared to the western world. One can rent their vehicle in just a few steps by logging in to car rental platforms or by hand in public (the trusted way in backward areas of Pakistan ).

You will have to list your car, i.e., provide the company with your vehicle information and agree to its terms and conditions. The company may take up to 2 weeks to get back to you and immediately respond on a platform like PakWheels or OLX. The company will get in touch with you to check your vehicle's condition after the listing process is complete. You can earn up to 1000 to 10,000 per day depending upon the model, state, and luxuries of your car.

Now you know the whole process of the rental car business, if you like it and have some amount to invest, you can start this business too.