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How to Start a Car Hire Business in the UK: 5 Simple Steps

Over the last 3 years, the UK car hire market has grown steadily and is reportedly worth £11 billion with an annual growth of 6.7% (between 2010 and 2015).

This rapid growth coupled with the fact that most millennials and generation X now prefer renting over buying cars is creating new opportunities for enterprising business professionals who want to start a new business in the gig economy.

As such, the car hire industry is a good place to invest, however, it is also quite competitive, so you need to learn how to maximise your odds of succeeding before you enter the business.

Here’s how:

Weigh Your Options – Business or Personal Rental

The two main options available in the car rental business include business car rentals, where you lease your vehicle(s) to a company for a given period and daily hires, where individual customers hire your cars for shorter periods.

For business rentals, you will need to have a good B2B contact list or make use of Linkedin to start generating leads and connect with potential clients.

With foresight, planning, and forward thinking, you should be able to choose the business model that works best based on your particular strengths and opportunities.

According to BVRLA, the trade body for the vehicle rental and leasing sector, there is no statutory regulation for the industry other than the need to hold a consumer credit licence.

There are also no legal requirements for setting up a rental company beyond what is specified by GOV.UK about setting up any type of business.


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Amass The Fleet – Buy Outright, Lease or Franchise

You will need strong and fairly new cars for your business. You could either buy the fleet outright or lease the cars and start small. The second option will work well if you are a new entrepreneur and lacking in financial capital. 

Some existing companies are even using the Uber model and let customers rent cars from other people near them. Remember that customers have different preferences.

If your target is the business industry, you need to have top of the range luxury vehicles for business executives to use. For younger customers, get cars that are affordable in terms of hire, insurance and fuel costs. It would be a good idea to invest in fleet management software if you buy the fleet outright.

You could also enter the market through a franchise agreement with a company such as Avis Budget Rent A Car, Europcar UK, Practical Car & Van Rental Services or Hertz UK.

Choose Your Location – Establish a Localised Presence

Location is vital to the success of any business. Therefore, you should research the kind of market you would like, and find a location close to your target market. You should also determine how you can use the location as a USP to enable you build a loyal localised customer base.

The best locations are close to hotels, train stations and airports. The venue should also be secure with alarm systems and CCTV cameras.

Determine Your USPs – What Makes You Different?

You should also determine your business’s unique selling propositions (USPs). These selling points will let your customers know how your service is better than a competitor’s and why they should use your business.

Examples of USPs might include affordability, home delivery, convenience, proximity, dependable services, enjoyable customer experience, and so on.

Market the Company – Use Social Media and an Optimised Website

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Last but not least, work out a sound strategy to market your new car hire company. These days, you have a better shot at attracting customers and retaining them by going the online marketing route.

This means that you should have a well maintained, properly optimised website and link it to Google Analytics to optimise it for lead generation. Bolster this website by working on your social media and digital marketing plan, and creating a content marketing strategy that works. Remember, most of your clients are likely to find you online through search engines than in person.


So, there you have it – the simplified guide to starting a car hire company in the UK. Remember, the earlier you get started, the sooner you’ll start striking gold.