How Much Does It Cost To Start A Car Hire Business?


Planning to start a car hire company? Well, before you even start one better consider a number of important factors and see how much you would be spending before you expect to earn.

Check your local government

Every town has their own regulations that apply to the line of business you want which you should research first in order to secure your plans. The Department of Transportation will help you find out what those regulations are and will tell you your next steps.

Choosing your vehicles

You can choose between second-hand vehicles or brand new ones. Although if you choose to purchase used vehicles, be ready for additional expenses for maintenance. A safer route may be buying a new vehicle that may range from $10,000 to $20,000 depending on the model and make then multiply this with the number of vehicles you intend to start with.

Office and garage

You are actually not required to have a large office but you need to have a large garage for your taxis and a space to accommodate your dispatcher, in-house mechanic, and accountants. Prices for your office and garage may vary depending on your location but expect to spend around $1000 per month for this.

Car hire equipment

You also need to spend for your equipment especially if you are starting with new vehicles and probably minor preparations for used cars. What you need to spend for are:

Paint and Logo – The cost is more expensive if you are going to get a professional paint job but if you use decals for logos and you do it yourself then the price can be a lot cheaper.

GPS – Cost around $200 to $400 and an additional $100 for the installation.

Setting up a website – The cost for this will depend on the system you choose and your location but expect to spend a couple of hundred dollars for this.

Vehicle tracking system – The Vehicle tracking system is a software that you can purchase to connect your car to your office computer system. You will also be able to find where your vehicle is, the distance it travelled and other details you may want to know.


Getting your license is the key to running your car hire business and in some states getting one may be as simple as going to a local clerk’s office and avail the business license for just $20 to $75. But for most cities and towns, they are governed by a regulatory agency which manages licensing. For larger cities, you need to get a medallion that is the same as a taxi license to start your operation.

To obtain the appropriate license visit your municipal licensing office and ask their requirements. If you can’t wait though, search for other car hire companies that want to sell their license but just expect to give your best offer.


Insurance for car rental cars is meant for commercial purposes so they are much different from car insurances. Brokers mostly offer different packages which will include employer’s liability coverage, public liability coverage, and interruption of earnings coverage. You don’t have to pay the whole insurance in one go but you can expect to give out 20 percent of the annual policy and around $60 to $100 per week

after that. While local licensing agencies may dictate the required minimum it would be in your safe interest if you get a policy that is beyond the minimum and if it is possible, get insurance for your employees to make them productive and happy in the workplace. You should also offer additional insurance for your customers in case of personal injury during a car accident for example.

Other miscellaneous

Once everything is set in place and you have your drivers ready, prepare for other expenses such as mechanical and cosmetic maintenance. You may also need to allocate funds for gas for the first two months although you don’t need to have a lot of money for this. But just to make sure you are prepared, get a small line of credit or a business loan to help you establish your goals.

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