How To Create a Car Rental Invoice

Car Rental Invoice – How to Create One?

Running a car rental service requires top-notch billing and invoicing. That’s why if you’re managing a car rental service center, you need to incorporate a unique rental car invoice. In this article, we’re going to look at car rental invoices and how you can create one for your business.

What is a Car Rental Invoice?

A car rental invoice is a type of bill that’s delivered either in-person or via email. It’s usually sent to customers of a rental car service centre that rented a motor vehicle for one or multiple days. The cost charged to clients will depend on the following factors:

  • Type of vehicle chosen
  • The corresponding taxes
  • The age and experience level of the driver.
  • The number of days the car will be rented.

Using an official invoice to document the details of the package arrangement will allow both parties (the rental company and the customer) to contact each other even after the transaction and aid the company’s accounting and bookkeeping purposes.

What is a Car Rental Service?

A car rental company that offers rental vehicles of all sizes and configurations to customers on a per-day basis. Longer rental periods are often given discounts and other promotions. Many rental car companies are usually found in high-traffic or populated areas. Airports are also a common location where rental centres are located since most travelers don’t have access to a mode of transportation and will be looking for a vehicle to rent.

Factors of Pricing a Rental Car

For larger and more established rental car businesses, pricing is generally controlled and mandated by company executives before being passed down to each chain. This process increases the convenience for customers since they’ll understand the price they will most likely pay regardless of their location.

However, this process doesn’t withstand the exceptions with top-rated locations and special promos that a single chain may be operating. For small-business rental car companies, pricing is entirely dependent on their decision. With that said, the following factors should always be considered when determining various pricing structures and pricing fees for every new or small-business rental car company:

Drive Time

Here’s the golden rule for dive time: the longer a customer rents a vehicle, the lower their rate will be. This pricing method is pretty standard in the rental car business and other rental industries, for that matter. In-home rental, for instance, long-term leases tend to get a lesser monthly rate.

The discount will depend on the demand for a particular rental car in the business’s area of operation and the standard of daily pricing set by the rental company. Another common pricing method is not charging by the hour, which is pretty reasonable. Instead, pricing can be charged for a minimum of a single day.

Booking Date

When it comes to the booking date, it is standard for you to offer customers who book earlier at a much lower price. Same-day rental requests require more work while not allowing for sufficient planning for the rental company.

Vehicle Type

When it comes to vehicle type, the rule of thumb should be this: larger and more exotic vehicles should get a significantly higher rental cost compared to smaller, economy-sized vehicles. The reason for this is their expensive purchase price and maintenance needs. For faster vehicles like sports cars, charging a higher rate to compensate for the more aggressive ways customers drive the vehicle should also be considered.


If the customer returns the vehicle with less fuel than what was originally in the gas tank, they should also be charged for the cost of the gas plus an additional fee for the energy and time it takes to refill the vehicle.

Driver Age and Experience

Customers who are under the age of 25 should also be charged a higher rate or an additional daily fee (between $8 – $20). This extra charge is to account for the increased liability they will pose. You can also impose an age restriction policy, which restricts drivers under the age of 25 or 21 to rent a vehicle from your company.

You should also be mindful of your state’s vehicle rental rules and regulations. Certain states tend to prohibit rental restrictions based on age. According to an article from the Enterprise, the following states in the United States impose age exceptions.

  • New York – Must be 18 or older.
  • Michigan – Minimum age of 18.
  • Government Employees – Must display “official orders” to the rental company.

How to Create Invoice and What to Include in this Invoice

Writing a car rental invoice is the same as other types of invoices. The difference is the content and items that you’ll include in your invoice. To write a rental invoice, follow the steps below:

Step 1 – Obtain the Car Rental Invoice

You can obtain a free car rental invoice template by going to invoicing platforms like FreshBooks or Invoicely. You can also create one for yourself. ReliaBills offers a simple way for you to create your unique and personalized invoice on their platform for free.

Step 2 – Display Your Business Information

Whether you’re using a free car rental invoice template or creating one from scratch, the first thing you will need to include in your car rental business information. Remember that every invoice you make should always begin with a request to identify the rental car business issuing the invoice.

Add your company name or replace the “Company Name” placeholder on the free template with your company name. Then, enter your full name or the name of your company representative handling the billing process.

Next, add your company’s complete address and other contact information like your fax or telephone number and email address.

Step 3 – Attach the Car Rental Transaction

The invoice will also need to have a common or unique point of reference that will tie the paperwork with the two entities involved. This item is often referred to as the invoice number or unique invoice number. Make sure you add an invoice number to all of your invoices to make it easier to locate previous invoices. It will also greatly help the accounting and bookkeeping department.

Step 4 – Document the Customer and Rental Transaction

The customer who rented the vehicle needs to be reported and documented in a distinct area. Make sure you add or supplement the “Bill To” section by adding the customer’s name, address, and other relevant information. Include the customer’s mailing address at the bottom of the address.

Now, you’ll need to discuss the rental transaction involved. First, list some details regarding the rental in the “Description” section. The total amount of days that the customer has had and used the vehicle should be counted and displayed in the number of days column. If you’re creating your invoice from scratch, write it down manually.

In the third column, report the “daily rate” applied to the rental. Multiply the value entered in the “Number of Days” column by the one in the “Daily Rate” column. Then, report the product/service in the last column.

The next three lines will allow for some basic information that will break down the total amount. First, enter “Subtotal,” which will serve as the amount owed for the rental company (excluding fees and taxes.

The following line should reflect the fees and taxes. Finally, include the additional costs and taxes with the subtotal. The resulting figure will be the one you’ll add in the “Total” section, which is the total amount the customer will pay your rental company.

Step 5 – Apply Additional Content If Necessary

At the very bottom of your invoice, you can add short notes detailing your payment policy and other as well as consequences for delayed payment. In addition, you can also add “Thank You” notes to show appreciation to your customer for choosing your car rental company.

Why Switch to Recurring Billing

Knowing how to create a car rental invoice is an excellent step towards improving your overall billing system. But if you want to make it easier and more convenient, you need to consider automated recurring billing.

Introducing Recurring Billing

The subscription model is not just for magazines and utilities anymore. Software, digital services, cell phone plans, and more are now available on a recurring basis. The popularity of this payment type has grown steadily in recent years because it provides many advantages to both customers and business owners alike. For businesses, the benefits include better and more reliable cash flow with cheaper administrative costs. For customers, there’s no need to open or act on invoices every month. Apart from that here are five other reasons why recurring payments are becoming more popular worldwide:

Recurring Billing Streamlines Business Processes

One of the biggest benefits businesses receive from recurring payment is a streamlined process that reduces overhead costs and administrative workload. Business owners no longer need to spend time and resources tracking down payments, studying payment trends, or resolving customer billing disputes.

Recurring Billing Offers Flexibility

One significant advantage of recurring payments is that businesses can offer different subscription plans for their products and services based on each customer’s unique needs – such as a monthly, quarterly, or yearly payment plan. This level of flexibility allows businesses to attract and retain more customers because they can provide them with a recurring billing schedule that works best for their needs.

Recurring Billing Provides More Predictable Revenues

Since recurring payments happen regularly, both business owners and customers know what to expect regarding revenues. With recurring billing, businesses know how much they will receive every month (or another time period). Customers won’t need to worry about paying additional late fees or overdraft charges on their bank accounts due to missed payments.

Recurring Billing Boosts Customer Retention

The flexible recurring billing model helps businesses retain customers because they can offer different billing schedules (i.e., monthly, quarterly, yearly) based on the unique needs of each customer – such as their budget or payment preferences. 

The subscription model also helps retain customers who may be tempted to cancel services by opening and to act on several invoices every month. With recurring payments, canceling a service is a one-time action, not an administrative nightmare.

Recurring Billing Saves Time and Money for Customers

With recurring billing payments, customers don’t need to pay their invoices manually every month. Instead, the service provider collects their payment on their account automatically. With automated recurring billing, customers won’t have to deal with late fees or overdraft charges from missed payments. In addition, businesses can automate the entire recurring billing process, saving customers time and money in administrative costs.

Subscribe to ReliaBills Recurring Billing Software!

At this point, you already know what recurring billing is and what it can offer. The next step is to discover what recurring billing software can do for your business. ReliaBills is a flexible, reliable solution that allows you to automate invoicing and payments in one easy step — giving you more time to focus on growing your business! Check out ReliaBills today and sign up for free to get started with professional invoicing. If you want to enjoy the benefits of recurring billing, upgrade to ReliaBills PLUS right away!

Wrapping Up

That’s it! You do know how to create a car rental invoice. Remember to follow these steps carefully. Don’t skip anything to make sure your invoice is accurate and comprehensive. ReliaBills can help you with your invoicing. All you need is to create a free account, and you’re ready to set up your invoicing system. Try creating your account for free today.

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