Tours & Travel

Guide to setting up a successful Car Rental Agency in Uganda

Every rental car type serves a different purpose, but for Uganda road trips, none beats 4×4 rental car.

The car rental business is a promising area that is gaining more popularity in Uganda and East Africa at large. New Car rental companies are emerging day by day over the internet since most of these agencies target clients abroad.

Tourism is the backbone of the Uganda Car Rental Business as a number of tourists continue to visit the Pearl of Africa year by year. Others come for business travels, conferences, weddings, and visiting their families.

Many people without cars prefer renting cars from agencies rather than individuals as the former is more reliable in case of emergencies throughout the process. Government organizations also hire cars from these agencies for various purposes such as transporting guests during big conferences.

How to start your car rental business

Any business should start with a detailed study and analysis of the market. You need to understand who your target audience is, and what advantages and disadvantages are involved, which will make your concept as attractive and effective as possible. In the car rental business, this data will help you choose the price category you will work in. It will help you decide which cars you should get for the fleet as well.

In the process of budgeting, it is worth considering crucial items of expenditure such as buying cars, company registration, insurance and permits, rental of office space and parking, office equipment, and extra car rental equipment for example camping gear, baby seats, Global Placement System devices and travel maps among others.

Others to note down can include recruitment of employees and payment of salaries, development of a website and mobile application, development and implementation of a marketing strategy, car maintenance, and unexpected expenses etc.

Car rental options

Mr Ssali, a director of one of the top car rentals in the country with offices in Najjanankumbi, Kampala says there are mainly two rental options in Uganda; Self-drive rentals and renting a car with a driver. Others could include one-way rentals, cross-border rentals, and unlimited mileage.

The self-drive option is the most common because of a number of reasons including privacy, flexibility, and cost. Renting a Car in Uganda with a driver always comes with an extra cost of not less than $30 per day and if one needs a multilingual driver, the cost can go up to $90 per day for only the chauffeur service.

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The other option that is becoming popular is the cross-border rental option where you can rent a car to go to other countries such as Rwanda, Kenya, and Tanzania. Getting a car for self-drive in Kenya can be hard while in Kenya which is why many tourists and businessmen on short holidays prefer to rent one from Uganda and take them around the whole of East Africa.

Type of cars

Sebuufu Jonathan, a travel consultant at Experience Uganda Safaris, says to tap into the various interests, an operator needs many car types from saloon, wagons, vans, and recent pick-ups to meet various needs and these must be four-wheel drive (4wd).

During the set-up phase of your car rental business, decide on the type of car that is most demanded to give you quick returns. The most popular car for self-drive in Uganda is a Toyota Rav4 and Land cruiser Prado. If you are starting small, you will need two or three cars of each type and if you are going large-scale, you will need a fleet that may also include Land cruiser V8s, Hiace Vans, and customized Safari Land cruisers among others.

Alternatively, you can also get suppliers when the need arises or agree especially in high seasons. Many big car rental companies also lease cars to others.

License Requirements

On top of the third-party insurance, the Transport Licensing Board advises rental car owners to get a tourist agent licence for a year. Companies that mainly serve tourists obtain these licenses from Uganda Tourism Board (UTB). Payment depends on the type of vehicle and its seating capacity. The car is first inspected before issuing the licence, which ranges from $70 to $200.

A comprehensive insurance policy for the car rental is also vital to protect it from losses and damages including theft, normal accidents, and out of natural disasters such as fire.

Lake Bunyonyi in south-western Uganda near the border with Rwanda.

Lake Bunyonyi in south-western Uganda near the border with Rwanda.

What else do you need?

Since the world is going tech, you will need an online platform to advertise your business from. A good-looking website is a great way to start. This can cost between $250 to $1000 and more depending on the functionalities you would like on it.

After that, you need to start on promotion to see a breakthrough in your business for your customers. Some use online ads on Facebook and Google while others reach out to online marketers with a good experience in Search Engine Optimization to help them out.

Advantages of car rental business

If you decide to join this business, first of all, study the entrepreneurship area in detail. After all, you will find both advantages and disadvantages of this business. However, the main advantages of running an Uganda car rental agency include ready availability of demand as a number of travelers increasingly prefer to rent a car to drive themselves instead of using public means.

Another advantage is that is about investment control as you can start a car rental business with relatively little funds. It all depends on your capabilities and the size of the fleet you are ready to start working with.

This business saves time as running it does not require a lot of time, and the number of business processes and their relative simplicity make it possible to manage with a small staff.

The car rental business is a fast payback and if you carefully analyze the market at the start, create a detailed business plan and follow an effective strategy, it can pay off in the first two years.

Disadvantages of the Car rental business

In this business, as in any other, there are also disadvantages as well as challenges and these may include;

Stiff competition from new companies that in a long run affect the quality of service delivered. To catch up with the already-established agencies, these new companies tend to lower prices to attract more customers.

Another main challenge is breakdowns and thefts. You must be ready to meet all breakdown costs when the car gets into an emergency on the road. This sometimes involves unplanned repair costs on handling them. Unscrupulous customers can even turn out to be scammers, so you should better be keen about your clients.

Lastly, some clients do not take good care of their cars as some vandalize them, while others fail to pay their parking fees or commit a crime in the cars and do not report the return of the car.

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