Choosing car models for a rental fleet — what to buy, what to avoid

Every 18 months you'll replace a car. The model you pick decides your margin for the next 3-5 years.

The five criteria, in priority:

1. Resale value retention. A Corolla holds 70% of its value at 3 years; an uncommon import holds 40%. Over a 5-year cycle, the difference is an entire extra car in your fleet.

1. Parts availability. Every local garage stocks Corolla parts. A brake pad change is ₨3-5K, same-day. The exotic import — you order from Dubai, wait 10 days, pay 3× the price. While you wait, the car earns zero.

1. Typical repair cost. A 2018 Toyota Corolla's service cost is predictable — ₨20-30K/year. A 10-year-old German car is unpredictable — ₨0 one year, ₨150K the next. Rental margins do not absorb unpredictability.

1. Fuel economy. Corporate customers often absorb fuel. Walk-in customers don't, and they know what they're comparing. A car that returns 12 km/L in city is a harder sell than one that does 15.

1. Driver familiarity. Your pool of drivers can drive a manual or an automatic. They cannot drive your first-ever CVT or paddle-shifted electric without 2 weeks of training. Keep the fleet boring.

What to avoid:

• Imports no local garage can service. One break-down, three-week repair, zero revenue.
• Luxury cars for a regular-walk-in fleet. Wrong clientele, heavy depreciation, every scratch is expensive.
• The same model for 20 cars. One recall or common failure becomes a fleet-wide disaster. Mix 60/30/10.

The profitable mix for a 15-20 car Pakistani fleet today: 10 Corolla / Civic / City sedans for walk-ins, 5 Altis / XLi or Vitz for corporate + airport, 3 Hilux / Revo for upper-tier rentals, 1-2 luxury for wedding season only.