At this time of year I, along with other classic car hire companies, start receiving requests for advice about starting a classic car hire company. Admittedly, you don’t get this in many other industries, new competitors asking existing competitors to help them but this isn’t a high powered dog eat dog world, as you can probably imagine, so I am usually happy to help.
Autumn and winter are the classic times for these conversations because many enthusiasts are wondering how to justify keeping their cars for another year. Hiring them out seems an obvious solution.
If you’re considering setting up a classic car hire business feel free to email me for a chat. In the meantime here is my summary of the reality of setting up a running a classic car hire business.
1. Be realistic
As with any new business venture, set your sights low and prepare to have them exceeded, rather than aim high and be disappointed. Classic car hire is, currently, a specialist market but a competitive one. Do not expect Hertz levels of hires. It takes 3 or 4 years to build an effective hire business. Crucially, take off the rose tinted spectacles – it is great fun but also very hard work. Sure, farm labouring may be physically more demanding, but the labourer can go home at 5pm on Friday without expecting his phone to ring at 9pm from a customer with a broken down car. If the joy of seeing someone fulfill a lifelong dream to drive your car makes up for the stress then this is the job for you. It is for me.
2. Plan for failure
The reliability and quality of your cars are the key to your success. If a car fails on hire it will generally cost you considerably more than the value if the hire to sort it out, taking into account time and fuel to recover it, refund the customer and repair it. You may be hiring your own cars or someone else’s – either way, test them thoroughly before you hire them with long runs. If you aren’t mechanically minded find someone who is.
3. Have the right skills
Luck determines whether a business succeeds. But you can’t control luck. You can control you though – after luck any business succeeds or fails on the skills of the person at its helm. Running a successful new classic car hire business depends on one or both of two skills – marketing and sales acumen or mechanical knowledge. To have both would be a rare winning formula, but usually you have one or the other. I have no mechanical knowledge of any value so I have to employ people who do. To fund the extra cost of garages (in the early days) and mechanics (now) I have to sell more – my background is in sales and marketing so this helps. If your skills are in mechanics then your costs will be lower so the sales pressure is reduced. If you lack both skills don’t worry – for any reasonably switched on person marketing is the science of the bleedin’ obvious. Watch what others do, copy it and keep at it.
4. Have the right cars
I have learned the hard way that the cars I like are not always the cars other people want to drive. The best way to start your business is with cars that are popular but not available to hire elsewhere – for a while at least you’ll have a clear run. Thunder Road Classics in Wiltshire, which specialises in American muscle cars, is an excellent example of this approach. But this approach is risky because the cars are an unknown quantity. Most people start with the cars they own then add more. If this is the case, decide early on whether you are running the business for profit or to cover the cost of owning cars you like. This decision will enable you to clearly set your expectations. When I was growing Great Escape I bought cars I liked, because I had the perfect excuse to do so. In many cases they didn’t work and just cost me money. At that point I realised I wanted to run a business rather than have a hobby and so I concentrated on cars I knew would work, even if I didn’t necessarily covet them. The lesson here is – there aren’t many popular hire cars that aren’t already available. You may be lucky enough to find one, but your rubber bumper MGB or Morris 1100 aren’t among them.
5. Be ready for your customers
From a customer service point of view, classic car hire may well be the riskiest venture you could choose. This is a world of highs and lows. Generally you will be hiring cars to people who don’t own a classic and are celebrating something – a wedding, a birthday or an anniversary are common. Combine that once-in-lifetime occasion with your 40 year old classic car with its poor brakes, weak headlights and so on and you can probably see where this is going. 8 years after setting up Great Escape our breakdown and failure rates are very low – less than 1% of hires result in failure. But I remember every one. Customer expectations have increased significantly since I started. You need to be ready for failure, also educate your customers to the risks and don’t get knocked down by the inevitable problems.
6. Think laterally
Setting up a classic car hire company is only one way to make money from your car collection. It may well be the best way for you. But there are other ways. You could partner with an existing hire company and share the cost of marketing and managing the business. We work this way with a few owners who hire through us rather than on their own. A few other existing companies have subsequently copied the idea. You could also place your cars with an existing hire company to hire on your behalf. A lot of our fleet is hired this way and it is easy and relatively profitable for owners with minimal hassle – after all, owning the car is the easiest and most valuable part of the hire business. Why not let someone else do the hard work of meeting and greeting customers?
There is no doubt about it, most of the time running a classic car hire company is, for me, the best job in the world. But it is a business and a job. Take off the rose tinted spectacles and note the words of advice above – and enjoy a truly rewarding business.
I am happy to answer any questions about running a hire business or hiring out your classic car. I can be contacted via the website on http://www.greatescapecars.co.uk.