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How Dealerships Can Profit From Car Rental Revenue

Car Rental: How Dealerships Can Profit From Car Rental Revenue

A car dealer has many options for increasing revenue. For instance, giving text-drive vehicles necessitates the same procedure as the rental without charging.

You can keep track of the inventory of automobiles with the use of car rental software. Car dealerships have a few different revenue streams they might employ.

Improving the management: 

It becomes imperative that you have total command of your fleet. Create a system that will let you verify the availability of vehicles based on their intended use. Car dealers typically use their automobiles in one of four ways.

  • Test drives or demo cars
  • Courtesy Cars
  • The cars you are supplying to those waiting for new vehicles.
  • The cars for customers who need to rent a car

Moving The Car Dealer business model to a rental one 

Before switching your vehicle dealership operation to rentals, you should take all the factors into account. By contacting more customers, car rental software helps to grow your dealership’s business. Some of the factors that must be taken into account in order to have a useful rental service are.

  • Fresh Used vehicles to sell: First, you need to consider that after 6-12 months, you will have fresh cars to resell once the rental activities will be terminated. 
  • System: You should choose a system that allows you to see the vehicle availability according to vehicle usage. The system should also allow you to make charges for the damages, or as called “Damage report”. 
  • Budget: The budget plays an important role in deciding the system quality and the number of resources that you will use. It also considers the number of vehicles that you are planning to involve. 
  • Rates: Car rental software can help you in deciding the rates depending upon the days and number of bookings. The ideal rates should be affordable and also provide you with a good amount of profit. 
  • Website: You should prepare your website for the options to rent. It is crucial for you to have a rental option and also when the client will check. 

More Streams To Generate Revenue

You should take advantage of every opportunity as a car dealership owner. For example, if a customer comes for servicing their car, you should offer them the rental service until their car gets repaired. Using these small opportunities you can easily generate a good amount of money. 

Also, a potential rental on the showroom floor will need to be replaced.

It should be a pure enough motive to encourage car rental staff to sell the vehicle. Here is where the overlap with the rest of the dealership would be necessary to cover such areas as well as the sticker price. 

Integration of policies that determine the department’s autonomy and coordination with other areas of the dealership, as well as the right resources in place, adding a rental car revenue stream can provide more profitability to the business. 

How the implementation of the right ideas can increase profitability by up to 95%?

A car rental software can calculate the number of people searching for car rentals and, depending upon the statistics, can provide you with the right strategy to follow. 

Challenges: Management limits the replacement process and their ability to be profitable and their growth potential. For example, the majority of profits were not coming from the replacement process and it was representing the direct cost of customer services. 

Task and Integrations Involved: 

  • Integration with the management system
  • Managing the rental services and car replacement services
  • Digitalize the manual process


In the strategy first, the issue of organizing and digitizing is solved by putting it in one space of MyRent. With this, the replacement process would be faster and deliver added value to the customers.

After that, we have to integrate MyRent with the DMS to provide a single experience to the dealer managers and operators. The final step was to review the business model of replacement add the additional paid service and expand the business to people that were looking for mobility services. ‘


95% increase in profitability

100% digitization of the rental and replacement process

30% cost reduction

75% fleet utilization

Why does Star Cars Rentals require a cloud-based integrated system?

Most of the functionalities of a car rental are controlled by a number of IT systems. These systems are not integrated since every system is operated individually. The IT system nowadays is capable of managing different sections like reservation management, accounting, payroll, fleet maintenance, fleet management, etc.

Star Car Rental was one of the successful organizations in the terms of renting vehicles in New since it would attain a remarkable market share of 45% of the entire market in New Zealand. Individually functioning systems have generated huge problems when organizations in expanded. Users need to enter the same data in the current scenario into multiple systems and this results to existing a massive amount of duplication of data across the different systems. 

-What are the expected outcomes?

The major advantage is the new system that will eliminate batch-file transfers and enter the data into multiple systems manually. Since the cloud-based system is a software-as-a-service approach, it will not need to allocate the hardware cost anymore. Customer satisfaction will start to grow again. 

-What are the Project’s Critical Success Factors?

Cost-effectiveness is one of the most important key factors in project management. According to the ARS’s quotation, the organization needs to invest an amount of $510,000 as a one-time cost for the system implementation.

Car rental software can help you with achieving cost-effectiveness. Set up the process while the estimated cost per month is $35,000. It means the organizations only need to invest $42,000 per year. 

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