What should I check before buying a car rental business?

A car rental business is mostly a fleet that earns money while it is out on the road. The fleet is also what ages, gets damaged and has to be paid for. Ask for a vehicle-by-vehicle list before anything else. Each other check on this page makes more sense once you can see which cars you would actually be taking on.

Fleet age, mileage and rotation

Ask how the seller decides when a car leaves the fleet. A tidy rotation plan means the cars you take over are spread across their useful life. A fleet that is all the same age may need replacing at once, and you would be paying for that after closing. Ask to see service records, and have a mechanic you trust look over a sample of the cars.

Use through the seasons

Ask for booking and utilization records by month, and by vehicle class. Ask whether demand is uneven across the year. A fleet that sits idle in the slow months still costs money to insure, park and finance. Compare the records with the financial statements, and ask the seller to explain any month that looks out of pattern.

Damage, claims and financing

Ask for the damage-repair files and the claims history, and whether any vehicle has an open claim. Then ask who owns each car. Some may be owned outright, some under a fleet loan or lease. Your lender and the fleet lenders will each have a view on a change of owner, so ask your lawyer what the loan documents say about it.

Locations and booking accounts

• Any airport, hotel or dealership counter agreement, and whether the other party must consent to a transfer.
• Corporate and insurance-replacement accounts, and who holds the relationship.
• Booking-platform accounts and reviews, and whether they can move to you.
• The software that holds customer and vehicle records.

This page covers a car fleet. If you are looking at tools and machinery instead, this page on equipment rental businesses is the closer fit.