Why is the Car Rental Market in a slump? Well actually the demand is very high, there just is not enough inventory …for a few reasons. The following article will explain why. And to be very honest, now is a great time to get into the CAR RENTAL space. If you want to own a car rental company with your own commercial insurance, contact me right away.

All of the major Car Rental Companies like Avis, Hertz, Enterprise, etc have had to deal with 3 major factors that really put a hurting to their bottom line. First the Covid Pandemic came on in a whirlwind ..and literally 60-80% of business travel dried up. Family vacations withered and sputtered to a small trickle, so the car rental companies had to pare back their vehicles because of very low demand. After we were globally knee deep in the pandemic, this caused a shortage in labor, which  lead to the computer chip storage. Why? Labor markets were greatly impacted because everyone was home. Factories in China were shuttered and they manufacture most of the chips that go into cars and other computers, etc. So the chip shortage was connected to labor and shortage of raw materials. Once your chip shortage is felt in the new car market (manufacturing), it naturally spills over into the used car market and the car rental market….which tends to only lease and buy newer vehicles. 

So, after the powers that be finally churned out some vaccines and global Covid numbers were dropping, you started to see travel and vacations return back to pre-Covid numbers. But the Car Rental companies could not scramble fast enough to ramp up inventory and are still struggling. What next? The War in Ukraine. The war has rippled thru the global economy in a number of ways. Oil production is affected because of sanctions on Russia, food markets are weakened because Ukraine cannot ship grain and other food stuffs that they produce (and are a global leader at doing this). So even though car rental companies want to get cars, the distribution channels that they traditionally relied upon, are not producing vehicles fast enough.

So the smaller car rental companies are picking up the slack, sort of.  Entrepreneurs (and even used car dealerships) are putting vehicles on Hyre Car, TURO and other ride sharing apps. Now is a great time to be in the car rental business. The global demand for vehicles is almost back to its pre-pandemic levels, even with the war in Ukraine still raging on.  Are you gonna sit by the sidelines and watch? Or are you gonna get a few cars and put them on. TURO …or launch your own private label car rental company? 

If you want to start a car rental agency and are not sure how or where to obtain the commercial insurance necessary to do this, contact me right away and I can make it happen for you. (470) 246-9662