How to Start Car Rental Business in India 2023

Hello friends, Your friend, your brother Sanju Patil and I have come up with a blog about the best car rental business idea for you. If you want to become big in your life and want to start a very profitable business of your own, then definitely read till the end of this blog.

  Gone are the days when people used to take buses to work. To go to the market one had to search for a vehicle or a rickshaw in the sun, although the number of vehicle owners is increasing continuously. There has been a decline in public transport use. A lot of people now prefer to rent a car for safe and comfortable travel. What is a car rental business? A car rental agency is a type of business that leases or rents its vehicles to people for a few hours or days.

 Car Rental Business in India

Car rental company is growing in India. Everyone from the middle class to super-rich people use this car rental company.

 First of all, you have to understand the business model of the car rental business as it is at a transformative stage that is evolving with time. If you want to start a car rental business, there are two types of business models – one is daily rental and the other is contract rental.

 Customers can rent their vehicle for regular hours within the contract rental. Those who will be your main customers will be in this segment. Passenger business executives or those who have their vehicle breakdown inside this type of business.


 Talking about the second model, in this the client can hire your car or truck for the fifth number of days. The corporation will be your target client in this. People who are having a wedding, anniversary, birthday or any other kind of celebration in their house. Your business model will depend on your target audience and then you will have to purchase your vehicles accordingly.

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How to Start a Car Rental Business in India Steps to start a Car Rental Business

 Step 1- Detailed Analysis


First of all, you have to do a Detailed Analysis. Good analysis, proper planning and forward thinking will help you to take risks and work critically. You need to research what kind of material you will need and what permits and licenses are needed. Your focus will be required on the same dynamic and which competitors’ challenges you will have to face. In this business, you will have to make a detailed analysis and plan.

Step 2 – Select your Car Business model

Choose Business model

You will need to decide on what type of car rental operation you want to run. There are two types of primary forms in this, first comes :

  1.  Contract Hire – Where the client hires a vehicle for a fixed term.
  2. Regular Hire – where the client hires a vehicle for a short period. Here you can choose the place of business operation.

 You have to decide whether you want to work independently or affiliate with big brands like Ola, or Uber. You also have to think about whether you have to operate your business online through the website or mobile or through both.

Step 3 – Build Your Company

Build your company

You will need to collect your taxi inventory. In the beginning, whether you buy all the vehicles or take the vehicles on lease for some time. This will be the most important question that you will have to answer. Your next step will be to ensure that the vehicles are well maintained and get good drivers for them. Management of day-to-day operations is very important. In earlier times you could keep diaries but in today’s time, it is very important to have an advanced management system and a functional website so that you can compete with your competition properly.

Step 4 – Register your company

Online Register with company

Your company must be licensed AS A LEGAL ENTITY IN INDIA. You can file your company as a sole proprietorship business or limited liabilities partnership or private Ltd company. This step will involve everything else, such as applying for a trademark for your brand.

Step 5 – Register with the Tax Administration

Register with the tax administration

 You will have to register your company at the state level and federal level with the relevant tax authority. There are also some taxes that your company can do as an individual. Often you have to deduct tax from their income, which you have to remit to the state tax authority if you employ workers for your work.

 Step 6 – Open Business Account

Business Account

  Open your business account. For your company, you must have a business account. Even if you have your account, you will still need to open a separate business account for your company. Where all supermarket funds could become louse. , You can also do all the business expenditures of your company. Apart from this, whenever you have to take a loan from the bank, it will be easy for you. The separate bank account will also help in planning the supermarket financial statement, for your accountant.

 Step 7 – Insurance application

Insurance application

 The most important thing at the time of starting a company is to get insurance. Operating a vehicle company without insurance is very risky. At the time of an accident, not only can your liability destroy your company, but it can also force you to sell all your assets. Some important insurance policies that you should consider for your rental company are as follows –

  •  Responsibility Insurance
  •  Coverage of personal effects
  • Personal accident insurance
  •  Employee Benefit
  •  Harm Collision Waiver
  •  Industrial Auto – responsibility
  • Specific Accountability


  •   First of all, create your online presence – You can easily promote your car rental company through digital marketing. By creating your website, you can position your online presence well. Online marketing is the best platform to connect with your target audience.
  •  Establish Your Business Association – You can build your relationship with a small skell company to increase your taxi services. You can also connect with companies and hotels whose preference is online taxi booking. This will be your best chance in the future to make a profit.


Q. Are car rentals profitable business ?

Ans – You can earn well by starting a car rental business. The gross profit margin in this business ranges from 5 to 10%.

Q. Is car rental business legal?

Ans – The company needs to be licensed in India as a legal entity. This can be accomplished by filing it as a sole proprietorship business or a limited liability partnership, or a private limited company.
Q. How is the car rental industry?
Ans – The car rental market has recovered well from the blow caused by the COVID-19 pandemic. In 2022, car rental sales are expected to reach USD80 billion in nominal terms, although in real terms, this was still below pre-pandemic levels.


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