Four Important KPIs in the car rental industry

Four important KPIs in the car rental industry

The global car rental industry is here to stay. A number of reports suggest that the rental business will see a surge and some studies predict that the compound annual growth rate of the US vehicle rental market will soar by 5-6% in the period between 2021-2026. Against this backdrop, it is important for the rental companies to level up their service, in order to stay on par or better still stay ahead of the competition. Once you are thorough with “How to start a car rental business ” and “Things to follow before starting a car rental business,” it is vital to understand the important KPIs in the car rental industry.

Now, some of these indicators may vary according to the specific niches of your business. However, an accurate understanding of the pulse of your circulation is vital to stay competitive in this growing industry.




This is a fundamental indicator in any business. The common understanding is that we deduct the total amount incurred to produce the goods or service from the total sales. However, this common phenomenon is not so simple in the rental industry. The diversity in the fleet and the fact that each of these SKU’s has recurring cost lines makes the accounting process complex. This abstruseness in determining actual costs makes price and revenue a critical risk factor for the sustenance of business.

A plethora of indicators could be utilized in measuring this metric. Nonetheless, it is best for the business to closely monitor the unique independent variables that influence the cost of and adapt the most suitable metric.

  • Percentage increase in car rental rates
  • Percentage increase in revenues
  • Weekly or monthly car rental rates


Fleet Efficiency

Car rental is a unique business. Here, the service is offered using a material (fleet) that creates a number of incidentals and interim costs. There are multiple revenue methods and cost lines that fall on the same product. These individual materials (fleet) have to be carefully monitored to identify their performance. Cost means like damages, repairs or rejections by the customers should be calculated on par with the market value, price inflation, fuel efficiency of material (fleet). This individual tracking and monitoring are vital in determining the performance of your fleet.


Customer Satisfaction

The relationship you grow with the customer is of paramount importance. Increasing customer satisfaction almost always will generate new leads, converting them into successful businesses. Alternatively, in a rental business, while it is important to satisfy the customer, it is crucial to foresee the average sale that you could generate from that particular customer. This will shed light on the customer lifetime and value, thereby signalling indications on your investments like; how much you could invest in retaining the customer or going for a new one, what are the improvements you could do to your fleet, develop attractive short-term packages and so on. If you are thorough with the customer base, it becomes extremely easy to make these decisions and increase your revenue.


Fleet to Rental Ratio

The fleet to rental ratio is relatively the easy one on the list. However, it is one of the most important indicators that predict the performance of the business. The fleet to rental ratio analyses the number of active and usable vehicles that can be given out on rent out of the entire fleet. This gives a realistic sense of the sales. Maintaining this ratio, in closer frequencies, will also give a better understanding of the depreciation rate of the material (fleet). Thus important purchase decisions and sudden and predictable breakdowns and accidents could be avoided.

The vehicle rental business is becoming increasingly competitive in the US, like in most countries around the world. One of the significant reasons is the concern over reducing emissions. The increased use of electric vehicles predominately contributes to this positive trend. It is indeed a favourable sign towards bolstering a greener and smarter planet to live in.


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