10 Car Rental KPI Metrics to Track and How to Calculate

The car rental industry is competitive. If you want to be successful, you must measure yourself against your competitors on an ongoing basis. This is where KPI metrics come in – they give you the information you need to benchmark your performance against other companies in the industry and identify areas for improvement.

1. Average daily car rental rate

The average daily car rental rate is the average daily rate of a car rental company. It is calculated by dividing the total revenue generated by the total number of days the vehicle was rented.

The formula is simple:

Daily rate = Total revenue / number of days rented

The Average Daily Rate can be used as a benchmark to compare different car rental companies. It’s also useful for seeing how much you’re paying compared to the industry average.

2. average days rented

Average days rented is the average number of days a vehicle is rented, and it is an important metric for car rental companies. It can help you calculate revenue per vehicle per day (RPTD), which is calculated simply by dividing total revenue by total vehicles.

If you’re looking to increase your average days rented, it helps to know what causes long-term rentals:

• The customer likes the service so much that he wants to continue using it for longer than originally agreed; Or
• He doesn’t want his insurance company or credit card provider to know how often he uses his car.

Another way to increase your average days rented is to offer longer term plans. This can be a good idea if you’re targeting customers who use their vehicles frequently but want to save money on gas, insurance, and other ownership costs.

3. Occupancy rate

Car rental occupancy is the percentage of time your fleet is filled with a customer.

• Days Leased (rental days) divided by available inventory (cars).
• The total revenue generated by all vehicles divided by the total available inventory.

A good car rental occupancy rate is 70% or more. If your cars have been sitting idle for too long, consider lowering your minimum rental period or increasing your price to accommodate shorter rentals.

4. Car renewal rate

The car rental churn rate is the number of cars rented divided by the total number of cars in your fleet. It’s a measure of how busy your business is and an indicator of how fast your cars are being rented and returned.

If you have 100 cars in stock, but only 10 are rented per month, your turnover rate would be 10%.

The turnover rate of car rental companies is usually around 20%. This means that on average a car is rented and returned every two weeks. If you only lease 10 cars per month, your turnover rate will be much lower than that.

5. Cost per mile

Cost per mile (CPM) is the most important metric for car rental companies. It is calculated by dividing the total cost of vehicle rentals by total miles. So if a car rental company has 50 cars and each car has been rented 100 times for a total of 5,000 miles, then the CPM would be ( x 100/5,000).

The reason this metric is so important is that it helps you understand how profitable each individual car will be over its lifetime. This means that if you have more expensive cars with higher CPMs versus cheaper cars with low CPMs, your overall profit will increase because you get more for your money!

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6. Miles per gallon

Miles per gallon is the average number of miles a vehicle can travel on one gallon of fuel. This is an important KPI for car rental companies because it helps them understand how much money they are spending on gas.

In order to calculate MPG, you need to know:

• The number of gallons used in your fleet over a specific period (i.e. last year)
• The total distance traveled during this period
• The average number of miles a vehicle can travel on one gallon of fuel (i.e. 20 mpg)

7. Monthly car rental sales per employee

Monthly car rental sales are the total number of vehicle rentals in a given month divided by the number of employees working in that same period. This metric is useful for establishing a baseline for each employee’s performance and for comparing other employees in your organization. To calculate monthly car rental sales per employee:

• Average all total amounts paid per rental at each location. Divide this figure by the total number of rentals at each location (excluding canceled/returned reservations) to get an average cost per rental transaction. Multiply this figure by 12 months to get an annualized average cost per rental transaction.
• Divide this annualized cost per transaction per vehicle by your company’s workforce during the same designated period to determine your monthly car rental revenue from customers who purchased their reservations through one or more employees of your organization (in other words , divide it by all employees salary during those months).

8. Car Rental Gross Profit Margin

You can use the gross margin metric to compare the profitability of different car rental companies. It is also useful for comparing a company’s performance over time and with other companies in its industry. This metric is calculated by dividing a company’s gross profit by total revenue, expressed as a percentage.

Gross profit margin reflects the amount of money your business earns after subtracting all costs from revenue (including taxes). The higher this number, the better off you are as an owner, as it means that you have more money left to invest in your business or your pocket as profit when all expenses are paid.

9. Car rental net operating income

Net operating profit, or NOI, is one of the most important metrics to track in your car rental business. If you don’t know how much money you’re making each month, it can be difficult to make decisions about how to improve your income and continue to grow as a business.

NOI is calculated by subtracting all expenses from all income:

Net Operating Income = Rental – Repairs – Debit Card Fees

10. Maintenance costs

Maintenance costs are the costs associated with maintaining a car on the road. They include everything from oil changes and tire rotations to transmission replacements. These expenses are often overlooked when considering the costs of running a car rental business, but they shouldn’t be!

Maintenance costs can be divided into two categories: regular maintenance and unexpected maintenance (which we will discuss later). Regular maintenance includes things like oil changes, tire rotations and fluid flushes. The objective here is to ensure that all moving parts continue to function properly so that your fleet remains in top condition and ready to rent at all times. Excessive wear and tear is avoided, helping to lower repair costs when these parts fail or need to be replaced entirely due to age-related wear.

Conclusion

The above metrics will help you gauge the performance of your car rental business. You can check these KPIs monthly to see if they are on track and keep them in mind when making decisions about hiring more employees or buying more vehicles.