A car rental or car hire agency is a company that rents automobiles for short periods of time (ranging from a few hours to a few weeks) for a fee. It is an elaborate form of a rental shop, organized in numerous local branches, primarily located near airports or busy city areas and often complemented by a website allowing online reservations. There are also third party websites (such as online travel agencies) which compare quotes from the major car rental agencies.

Car rental agencies primarily serve people who have a car that is temporarily out of reach or out of service, for example travellers who are out of town or owners of damaged or destroyed vehicles who are awaiting repair or insurance compensation. Because of the variety of sizes of their vehicles, car rental agencies may also serve the self-moving industry needs, by renting vans or trucks, and in certain markets other types of vehicles such as motorcycles or scooters may also be offered.

Alongside the basic rental of a vehicle, car rental agencies typically also offer extra products such as insurance, global positioning satellite (GPS) navigation systems, entertainment systems, and even such things as mobile phones.

Business models

There are two major types of car rental companies. The first group of companies own their own cars (known as a fleet) and may have agreements with car manufacturers to provide all the cars for that fleet. An example of this type of company would be Hertz or Europcar.

The other type of car rental company operate on a broker model and have commercial agreements with other car rental companies to provide access to their fleets of cars.

Rental conditions

Car rentals are subject to many conditions which vary from one brand to another. The vehicle must be returned in a good condition and must not exceed a maximum driven distance, otherwise extra fees may be incurred. Additionally, some companies set a minimum age for the vehicle driver, which in some cases is as high as 25, even in countries where the minimum legal age to hold a driver's license is much lower. In all cases a valid, current driver's license is required in order to rent a vehicle.

Recent conditions have utilized GPS technology to limit maximum speeds or driving to specific regions. Renewable fuel vehicles are available in certain areas.

Rental companies buy large volumes of vehicles through fleet companies for use in their fleet and then sell those vehicles into the used car market to dealers across the country in what is known as a fleet sale. Dealers generally will go through an inspection of the vehicles to make sure they comply with the safety standards of that dealership and then sell the car to the public. Many of these are known as program or lease return vehicles in the representation by the selling dealer.