Inventory shortages are the ongoing frustration no dealer needs right now. For Chris Kari, dealer principal at Kari Toyota, that frustration sparked an idea – why not earn more from the service fleet by offering dealership car rentals?
“We were already in the Rent a Toyota program and had seven cars in the fleet, but they weren’t being used much. They were just a convenience for service customers, and that’s an expensive convenience. So I thought, let’s make some changes and try to see if we can make some money with these cars,” Kari said.
Building a real dealership car rental program
To start, the plan was to expand the fleet. But before he could add cars, Kari said he knew he would need a better system for writing rental contracts. The paper contracts his team used for service customer loaners were too slow, and key information was buried in reams of paper in filing cabinets.
Fortunately, Dealerware had just been approved as a Rent A Toyota vendor, and once he watched a demo, he knew it’d be the right tool for his small team.
“I needed something that is easy to use and basically walks you through every step. That’s what Dealerware is versus some of the other systems that are so complicated,” Kari said.
That simplicity meant the service team at Kari Toyota didn’t need to grow to support the new dealership car rental program. Kari was able to expand the fleet to about 20 cars, and Dealerware’s tools for custom rental pricing let them keep rates competitive, respond to changes in demand, and even offer discounts on longer-term rentals. It’s all part of a diversification strategy that’s paying off.
“We’re more than a car dealer, we’re in the business of transportation. You need a car for just a day or two, we’ve got you covered with rentals. Need a car for a few years, we’ve got you covered with leases. Longer than that, we’ve got cars for sale, and we’ll keep them maintained and on the road,” Kari said.
Bringing in the rental dollars
Kari jokes that “90% of our interesting stories come from the rental department. You’re going to have headaches and you’re going to have things that don’t go smoothly.”
Despite that, he says diving into dealership car rental has definitely been worth it.
“We used to be losing money on fleet cars, and since we started this two years ago, we’ve had a 1200 percent increase in revenue, and the rentals are covering the cost of the loaner cars and bringing in profit” Kari said.
“The rental program has helped us sell deeper into our incoming vehicles, too,” he explained. “Pretty much every car that we get is sold before it arrives, so now our sales team can offer rentals to people so they can see what a car is like, and maybe put their name down for an incoming order.”
A word to the rental curious...
“Keep it simple. As simple as possible.” That’s Kari’s advice to other dealers interested in exploring dealership car rentals. For Kari, using Dealerware helped the program grow without straying from simplicity.
“That’s why we went with Dealerware in the beginning, because some of these software programs that come out are so complicated that it takes a lot of training to get people set up, and then they don’t want to use them because they’re too complicated,” he said.
“Even though Dealerware started as a loaner car platform, it works well for car rental fleets and since it is so easy to use, we knew it was a good tool for us. Plus, the staff has always been very responsive and super helpful.”