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Run Your Own Rental Fleet, Don’t Drive Customers Away

You may think you’re saving money by not having a loaner or rental fleet. But you may be driving customers towards another dealer?


You may think you’re saving money by not owning your rental and loaner fleet. But, by doing so, are you literally driving them into the hands of another dealer?

There are plenty of reasons why dealerships should consider running their rental fleets. For one thing, it can be a great way to generate additional revenue and profits. But there are other reasons, including increased customer satisfaction and loyalty and the ability to better control your inventory. So, let’s take a closer look at some of the most important benefits of running a rental fleet for auto dealerships.

Improved Customer Satisfaction

A significant benefit of having a rental fleet is improving customer satisfaction. Although they may not voice it, customers view loaner and rental experiences as part of their overall purchase experience with your dealership. Therefore, if your dealership offers rental cars, customers will appreciate the convenience and are more likely to recommend your business to others. 

How essential is that convenience? In a J.D. Power survey, 97 percent of customers would choose a dealership that offered loaners over one that didn’t. However, the report also says that only 26% of dealerships provide alternative transportation as a component of a service experience. If there isn’t an option, the customer will consistently choose a dealership with loaners or an independent mechanic closer to their work or home. 

In addition, offering rental cars can also help attract new customers who may not have considered buying from your dealership before. A loaner or rental program is the most potent factor influencing a customer’s choice of a service provider.

If you speak with your customers, they’ll tell you that customer service is all that separates most dealerships and independent shops. A fleet of rental cars and loaners give you options for elevating the customer experience.

IYou can curate their experience to exceed expectations by offering an SUV loaner to customers with larger vehicles, or giving an EV loaner to customers who express interest.

To add more convenience to the customer experience, you can drop off a service loaner to customers’ homes or offices and pick up their cars for service. Or, take the convenience a step further and offer customers a choice of your entire available model line for them to drive – if they view loaners as a test drive, offer them a way to pay for a customized experience. In either case, charging a small fee for the convenience will make sense to customers and can add to per-RO profits.

Increased Revenue and Profits

You may think, “I’m not a luxury car dealer, so the cost of starting a rental car program would be prohibitive.” However, is it time to ask yourself what your customer’s expected lifetime value is? Warranty service alone keeps most service bays busy, and many OEMs will assist in paying the rental cost. However, one thing you can be sure of is that if you don’t offer loaner vehicles, warranty customers will look for a dealer who does.

In the customer’s mind, warranty repair is warranty repair regardless of which dealership does it. And for their next vehicle, that other dealership gets the retention when it’s time for a new or used vehicle replacement. JD Power says, “70 percent of all car owners surveyed said they would return to that dealership for their next car purchase, if offered a service loaner.”

The good thing is that customers don’t feel entitled to a free loaner, and say they would pay $10 to $75 for a rental. Of course, you may think an agreement with a third party on-site for rentals would cover that with much less cost. However, your customer will be left to get what’s available from the rental company, they’ll have to wait in another line and talk to another person, and they may get a vehicle they hate. Or worse, they may get a competitor’s models that they love.

A chart showing what amount customers of mass market and premium brands will pay for a service loaner vehicle. Chart is divided across 5 price ranges from "less than $10" to "greater than $75." Also shown is an average of the two responses.

If you choose to run your own rental fleet, you can control the customer’s whole experience, and with the right fleet management tools in place, costs, contracts and fleet management get simplified. Plus, managing your own fleet could give you chances to rent used vehicles that might be sitting idle on your lot right now. Doing so can bring in extra income and get those cars in front of the right buyer sooner.

After all, customers who rent cars are often looking to purchase one eventually. Whether by building loyalty with great service experiences or giving customers more ways to access your inventory, running your own fleet will bring you sales leads.

How Do I Start a Rental or Loaner Fleet?

If you’re looking for ways to increase revenue and profits while also improving customer satisfaction, running a rental or loaner fleet is something to consider. 

There are plenty of benefits that make it an attractive option for dealerships, and, at Dealerware, we can show you how to launch, manage, and run a successful loaner or paid rental program

And, as a result, you can equip your dealership with the tools it needs to improve your customer satisfaction scores, increase retention, and have a more profitable future. 

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