The ups and downs of the self-drive car rental business.
(Baonghean)According to official statistics, there are currently nearly 40 establishments in our province offering "self-drive car" rentals, with almost 300 vehicles of various types and models. There are many issues surrounding both the rental owners and the renters.
A few years ago, seeing that the real estate business seemed to be stagnant for a long time, Mr. Nguyen Van Binh (Quan Bau Ward, Vinh City) switched to the business of renting self-drive cars. At that time, in his eyes, this profession had great potential. The reason was that Vinh City had seven driving schools, and they were always packed with students. Furthermore, through his "survey," he realized that out of every ten people who got their driver's licenses, only one or two could afford to buy a car immediately afterward. The rest, after their driving lessons, became addicted to driving. And they didn't hesitate to spend money renting cars to drive to satisfy their craving for the "profession" or to satisfy their need for prestige. At that time, there were already quite a few businesses renting cars in the area, but Mr. Binh believed that this profession was still profitable if one knew how to do it.
A self-drive car rental shop on Nguyen Du Street (Vinh City). Photo: Canh Nam
After months of searching, Mr. Binh acquired five used cars, mostly budget models like the Matiz, Kia Morning, Hyundai Gez, and Zaze. He then refurbished them, both exterior and interior. With prices ranging from 300,000 to 700,000 VND depending on seating capacity, plus some clever promotions, his company often experienced a shortage of cars. During holidays and Tet (Vietnamese New Year), the demand was even higher. Thanks to this, in just over a few years, he essentially made a profit from the five cars. He would have recouped his investment even sooner if, a few months earlier, a customer who didn't know how to drive had crashed into a lamppost on Hong Bang Street, damaging the front of the car and seriously injuring the customer, who had to travel to Hanoi for treatment. That incident cost him over 100 million VND because he hadn't had insurance.
Despite encountering a few setbacks, Mr. Binh's self-drive car rental business is still considered to be doing well. The case of Mr. Pham Van Khanh in Ben Thuy ward is different. After retiring from over 20 years as a driver for an administrative agency, in 2010, he decided to mortgage his land title to the bank to borrow nearly half a billion dong, plus his own capital, to buy two cars from a wealthy businessman in Ha Tinh who was selling them off to pay off his debts. He put up a sign that said "Self-drive car rental," and the next day customers came to rent them. Business was going smoothly until just before the recent Lunar New Year (Year of the Snake). That day, two young men, regular customers, came to rent two cars at the same time.
The contract and agreement were complete and in order, just like always. But unexpectedly, not only was the deadline missed, but nearly half a month later, both the vehicles and the customers disappeared. Panicked, he reported it to the police. It turned out his two vehicles were at two different pawn shops. And his two "regular customers" were being held in custody at the Vinh City Police Department for gambling. Needless to say, the owner had to go through a lot of trouble, both financially and in terms of effort, to get his two vehicles back.
Later, he realized that he was lucky, because some car owners suffered even more because after renting a car, they pawned it at a pawn shop using a fake ID card. When everything came to light, getting the car back was a very difficult experience.
A customer of self-drive car rental shops confirmed: Some owners of self-drive rental shops are quite unscrupulous. Once, he was fined by the police for not using his turn signal when turning. Upon inspection, it turned out the signal had been broken for some time. But the owner insisted the renter had damaged it. That's not even counting minor scratches or damage. Renting a car without careful inspection is a sure way to get into trouble. Furthermore, most renters are inexperienced drivers. Many rental cars have a good exterior but flimsy engines, making them prone to accidents and traffic violations. Especially if an accident happens, the owner gets compensation from the insurance company and the renter covers the repair costs – a great deal. Even better, if the car is impounded by the police for traffic violations, the longer it's held, the more the owner benefits. According to the contract, the customer just pays the fine. Whether the car is on the road or at the police station, the owner doesn't care.
Viet Long
