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Renting out vehicles for a fee brings in the LTFRB on top of the basics. Its circulars say private vehicles rented out for a fee need an LTFRB franchise, and every vehicle must be registered with LTO. The thing owners miss most: if your cars are still being paid off, the franchise application needs your lender's written consent and the recorded chattel mortgage.[1,3,4]
Why a rented car needs a franchise
LTFRB MC 98-027 says owners of trucks and other private vehicles rented out for a fee must secure an LTFRB franchise. Under MC 98-002, the Vehicles for Hire service covers 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 conversion filing fee of ₱430 for the first 5 units plus ₱35 for each unit beyond five.[1,2]
Every motor vehicle used on public highways must be registered with LTO.[3]
Financed units
If a unit is under financing or mortgage, the franchise application must include the lender's written consent and the recorded chattel mortgage.[4]
Ask your bank or financing company for the consent letter as soon as you buy the car, since the franchise cannot move without it.
These circulars are old: confirm first
The LTFRB circulars cited here date from 1998 and 2004, so they may not match today's rules for rent-a-car services. Before you buy units, visit the LTFRB regional office and ask which franchise applies to self-drive and with-driver rentals today, and what it costs. If you will serve tourists, also ask DOT about accreditation for tourist transport.
Before you rent out your first car
- Ask LTFRB which franchise covers your rental model now.
- Make sure every unit's LTO registration is current.
- Get your lender's written consent for any financed unit.
- Get a certified copy of each recorded chattel mortgage.
- Write a rental contract with rates, deposit and damage terms.
- Ask your insurer about cover for cars rented to other drivers.
- Keep a log of each rental with the renter's license details.
Questions people ask
- Do I need an LTFRB franchise to rent out my car?
- LTFRB MC 98-027 says private vehicles rented out for a fee need a franchise. Because the circular is from 1998, confirm the current rule with LTFRB.
- How much is the LTFRB fee?
- MC 98-002 (1998) set ₱430 for the first 5 units and ₱35 per unit beyond five for converting to Vehicles for Hire. Current fees may differ, so ask LTFRB.
- Can I use a car that is still being paid off?
- Yes, but the application needs the lender's written consent and the recorded chattel mortgage.
- How do I set my rental rates?
- Under MC 98-002, sedan Vehicles for Hire fares are on a contract basis per vehicle as approved by LTFRB.
Sources
Checked 13 November 2026. We link the agency's own page for every requirement. Rules change; confirm with the office before you pay.
- LTFRB Memorandum Circular No. 98-027: Franchise for Dump Trucks and Other Private Vehicles Used as 'For Hire' · LTFRB (via Supreme Court E-Library) · 25 September 1998
- LTFRB Memorandum Circular No. 98-002: Vehicles for Hire · LTFRB (via Supreme Court E-Library) · 20 January 1998
- LTO v. City of Butuan, G.R. No. 131512 · Lawphil Project (Arellano Law Foundation) · 20 January 2000
- LTFRB Memorandum Circular No. 2004-022 · LTFRB (via Supreme Court E-Library) · 17 August 2004
The extra permits, in one table
| Permit or registration | Agency | When it applies | Fee |
|---|---|---|---|
| LTFRB franchise for private vehicles rented out for a fee[1] | LTFRB | vehicles rented out for a fee | Not published |
| Vehicles for Hire CPC (sedans, AUVs, pick-ups, vans, station wagons)[2] | LTFRB | for-hire sedan/AUV/van service | PHP 430 for first 5 units + PHP 35 each beyond (conversion, 1998) |
| Contract-basis fare approved by LTFRB[2] | LTFRB | sedan vehicles-for-hire | Not published |
| Motor vehicle registration[3] | LTO | always | Not published |
| Lender consent and recorded chattel mortgage for financed units[4] | LTFRB | units under financing/mortgage | Not published |