Interested in starting up a van hire company

[Messer]

Hi All,

Firstly, I am new to these forums but am always lurking on forums such as this.

I am looking for a bit of advice really from anyone who may have been in the same boat as me and has started up a van hire business.

I am currently a business development manager for an IT security company but have always wanted to have my own business, I started an online model shop a couple of years ago importing chinese model cars & helicopters, but for many reasons I decided to close it down.

So, I have always thought about the feasability of opening up a van hire firm. Starting small, as in a very small fleet and grow organically as and when the business demands.

I have some cash available to help with startup costs, although I dont expect these to be very high anyway.

Do people in this business lease the vans and then hire them out? Are there any limitations on doing this from the lease contract point of view? Which insurers offer a business insurance policy for hiring? Is it ok to act as a sole trader in this business? what about VAT registration, TAX etc etc?

As I said, its very much an infant idea at the moment but I am sure more questions will arise as I think it through more and more!

 

[vvaannmmaann]

If you can do this alongside your current job,then why not? Just don't burn your bridges at the moment.
Not done this myself,but I imagine the insurance will be the first issue before worrying about antything else.Then you will need a secure yard,maintenace mechanic......
IIRC there have been a few threads about this.Look visa the search button it may help.
Good luck.

 

[JamesCartwright]

If you are unsure about starting out as a sole trader and VAT, tax issues etc. then you should probably seek advice from an accountant. You can also get general information about starting up and insurance issues from Business Link.

 

[PhilWarman]

We do Self Drive Hire insurance (its rather a limited market), I'll warn you that its not cheap as chips either.

 

[mattbetts]

Hey if you need any advice with getting hits to your site then let me know! m

 

[Dave Shaw]

The vehicle hire market is a difficult market to penetrate and is littered with failed businesses. They are highly reliant upon scale and utilisation - if you don't hire out the vehicle for 1 week it may take several weeks of hire to pay for that lost week. Whatever happens you will have to pay your lease costs (which are not going to be cheap on a small scale).

If you don't know the market and are unsure where you are going to generate business from then think very carefully about entering into this field.

 

[mattbetts]

Couldnt agree more with Dave

 

[Rainbow Chasers']

We hire motorhomes, and I must say insurance is an absolute killer, especially your first few years, as many companies want two years books etc before considering you. There are limited insurers out there that will do new business, but it really is a killer!

You can lease vehicles for hire companies, a quick google search and you will find them out there. Not sure as regards to vans though. There are lots of overheads and hoops to jump through, and hire is a time consuming business. It isn't just a point of taking money and handing the keys over - you have to do licence checks, security checks etc Costs around £20 per person, so factor that in.

Also you will need premises, which will mean extra insurance, some sdh insurers require a seperate motor trade too - which means two expensive policies! lol! and that is before you start, but factor in premises, that insurance, business rates for the size compound/offices etc.

Also, don't forget that you have to make sure the vehicles are paid for, as you cannot hire if they are on finance due to them being on hire/purchase! (you would be sub letting) Auctions are good places. You will also void all manufactuers warranties as well, another thing to factor in if buying new.

I can give you some details of insurers and licence check peeps if you pm me.

 

[Robert Humphreys]

I feel that you have to do something different from everyone else
There are so many van hire companies and most conform to the same model

I thought about my business and how I need to hire a van from time to time but cannot justify the expense of buying and running it.

maybe if you can somehow find people like me to commit to 1 or 2 days or so a week maybe sell it like a timeshare

Price is an issue so perhaps consider running a fleet of second user vehicles maybe 1 year + old (build quality and reliability is now pretty good.........that’s why they offer unlimited 3 year warranties)
just a few thoughts

 

[Rainbow Chasers']

I think 'Time Sharing' a van will be problematic, or at best difficult to manage.

The reason you won't have a warranty is because warranties do not cover for hire or reward - it is seen as a business where the vehicles are abused, often do high mileage etc so they void it.

There would be a market for used vans to hire though, you could offer large companies special rates for long term or seasonal hire etc. Plebty of companies who deliver need extra vans during busy periods.

 

[Conrad]

you do not need an o licence just make sure your customers have one or the ministry will impound it if caught without regardless of who owns it,you will have to maintain it as per vosa guidlines,insurance is usually down to the hirer or you insure it and put it on price.
you do not need council permission to park them although the land will have to be suitable from a business and access point of view,most landlords hate anything to do with cv,s,need anymore ask.

 

Any hire business is capital intensive, which is not a good thing in the current, restrictive market.

Whilst it is possible to raise lease/HP finance against vans for hire, lenders will require a significant deposit, rates will be fairly high and they might ask for secondary security.

As has previously been mentioned the fall-out rate is high.

Sorry to be bleak, but I would strongly recommend you look at something with less cash outlay!

Mark