Car rental business plan template for the Philippines

Summary

[Business name] Car Rental will rent [number] units ([for example, two sedans and one 12-seater van]) from a garage at [address], [city], with or without driver. Target customers are [balikbayan families, tourists, corporate clients, wedding parties]. Owner: [name], who will manage bookings and maintenance.

Capital needed: ₱____ for vehicle down payments or purchase, ₱____ for insurance, ₱____ for LTFRB, LTO and local fees, ₱____ for GPS trackers and a booking system, and a reserve of ₱____. Monthly amortisation on financed units: ₱____.

Fleet, garage and booking

List every unit: make, model, year, seats, plate number, whether it is fully paid or financed, and its insurance cover. The fleet decides your customers. Vans suit families and groups; sedans suit business travellers and couples.

Garage. Where the units park overnight, who holds the keys, and whether the space is secured. Booking. Customers book through [phone, Facebook page, website form]. Each booking needs a signed rental agreement, a copy of the driver's licence for self-drive, and a deposit of ₱____.

With driver or self-drive. If you supply drivers, list each driver, their licence type and pay arrangement (₱____ per day or per trip). For self-drive, write your rules on minimum age, licence years and the security deposit.

Market and competition

Use these prompts. Write what you found, not what you hope:

Example fill-in. "We contacted [number] car rentals in [city]. Self-drive sedans were offered at ₱____ to ₱____ per day; vans with driver at ₱____ to ₱____. [Number] said December and Holy Week are fully booked weeks in advance. We plan to serve [airport pick-ups / out-of-town trips to (destination) / corporate monthly contracts], which [number] of them do not offer."

• Who rents cars in your area: tourists, balikbayan families, businesses, wedding planners?
• How do the existing rentals price: per day, per 12 hours, per trip?
• Which months are fully booked, and which are slow?
• Do customers want a driver or self-drive?
• What do customers complain about in reviews of other rentals?

Operations and maintenance

Write a maintenance schedule per unit: oil change every [km], tyres checked weekly, full inspection every [months]. Keep a log book in each vehicle. Clean and inspect each unit after every return, with photos of the exterior and fuel level at handover and return.

Damage and disputes. Your rental agreement should cover fuel policy, late return charges, damage deposits and what happens if the car is impounded or in an accident. Have it checked by a lawyer before you use it.

Tracking. GPS trackers on every unit, with alerts if a car leaves the agreed area.

LTFRB, LTO and the other permits

The basic registrations are in the registration guide. DTI's business name fee runs from ₱200 to ₱2,000 depending on scope, plus ₱30 documentary stamp tax. BIR stopped collecting the ₱500 Annual Registration Fee from 22 January 2024.^[1,2]

LTFRB Memorandum Circular 98-027 requires owners of dump trucks, cargo trucks and other private vehicles rented out for a fee to apply for and secure a franchise from the Board. MC 98-002 created the "vehicles for hire" service for sedans, AUVs, pick-ups, vans and station wagons, with fares on a contract basis per vehicle as approved by LTFRB. That 1998 circular set a filing fee of ₱430 for the first five units and ₱35 for each unit beyond five for operators converting to the service; ask LTFRB for the current fee for a new application.^[3,4]

Every unit must be properly registered with LTO before it is used on a public highway. If a unit is under financing, LTFRB Memorandum Circular 2004-022 requires you to attach the lender's written consent and the recorded chattel mortgage to your franchise application.^[5,6]

Financial plan

Published figures are filled in: DTI ₱500 plus ₱30, BIR ₱0. The LTFRB fee is left blank because the only published figure in our sources is from 1998.^[1,2,4]

Revenue per unit. Rental days per month [number] × daily rate ₱____ = ₱____. Fleet revenue = sum of all units. Use a low case for slow months and a high case for December and Holy Week.

Break-even per unit. (Amortisation ₱____ + insurance per month ₱____ + maintenance ₱____ + parking ₱____) ÷ daily rate ₱____ = [number] rental days per month for the unit to pay for itself.

• Vehicle purchase or down payment ₱____ per unit
• Comprehensive insurance ₱____ per unit per year
• LTFRB franchise filing ₱____ (confirm with LTFRB)
• LTO registration ₱____ per unit
• DTI business name ₱500 + ₱30; BIR ₱0
• Barangay clearance and mayor's permit ₱____ (set by the barangay, assessed by the city)
• GPS trackers ₱____; booking setup ₱____
• Monthly: amortisation ₱____, maintenance ₱____, cleaning ₱____, garage ₱____, drivers ₱____

Risks

Car rentals lose money through a few predictable events. Plan each.

• Car not returned or used for a crime. Verify IDs, take a deposit, GPS on every unit, rent only to people you can trace.
• Accident. Comprehensive insurance, clear damage clauses, photos at handover.
• Units sit idle in slow months. Offer monthly corporate contracts and discounted long rentals.
• Operating without a franchise. Apply to LTFRB before you take paying customers; do not rely on a private-plate arrangement.

Car rental permits and fees

Questions people ask

Do I need an LTFRB franchise to rent out my car?

LTFRB MC 98-027 requires owners of private vehicles rented out for a fee to secure a franchise from the Board. Plan for it before you take paying customers.

Can I use a car that is still being paid off?

LTFRB asks for the lender's written consent and the recorded chattel mortgage when a franchise application uses financed units.

How much should I charge per day?

We do not publish rates. Call several rentals in your area for their prices, then work out the daily rate that covers your amortisation, insurance and upkeep.