Golf cart rentals are a staple of any dealers business and a “necessary evil” if you will. From the outside looking in, this would seem a profitable business segment because you make money from the rental of the cart and get the vehicle back to do it again. However, not all is as is seems in this business. Within this discussion, we’ll outline some of the pros and cons of the business, headaches, and the potential for damaged vehicles.
Our local business, Mountaintop Golf Cars, Inc. is located in Banner Elk, NC just south of Boone, home of Appalachian State University in the Blue Ridge Mountains. We have long used golf cart rentals as a supplemental business segment to our golf cart sales and service. Even though there is some profit to be made, there are also a lot of headaches and hassles which go hand in hand with this business.
Being in a rural area, we often have to drive great distances to pick-up and deliver our rentals, which is an additional charge above and beyond the cost of the rental. Many customers do not feel this charge is warranted, but is a cost of doing business. Our trucks need fuel to move and it is not cheap any longer. We unfortunately, have to pass this cost along to the customer. If you have your own trailer and can pick-up and bring the cart back, this fee is waived.
Although rare, another situation we often have to deal with is theft. Many customers who use golf cart rentals intend to use them at big events such as races, campground, etc. With big events come large numbers of people and with that the chances of theft increase as well. If a golf cart rental is stolen, the party who rented it is 100% responsible for the entire replacement cost of the golf cart.
But, the largest headache a dealer has to manage is damage caused to the golf cart rental while out on loan. While, we understand that the golf cart will naturally have a little wear and tear over time, they are often returned with excessive damage above and beyond normal use.
This article was sparked by an incident which occurred this past weekend regarding a golf cart rental. A local event rented multiple vehicles, a Club Car Precedent 4 seater and an EZGO utility vehicle. During the festival, the employee in charge of this vehicle had too much alcohol and attempted to drive the cart down a long flight of steps with approximately 10 people on a 4 seater cart. Talk about bad decisions. As you can see from our picture, significant damage was sustained to the body of the vehicle, the windshield and the bumpers. Likely the employee has now incurred an additional $1,000 in damage to be billed to his organization and could possibly face termination for negligence.
This incident has now spurred as change in how we handle golf cart rentals. A rental agreement must now be signed in advance stating that all damage is the responsibility of the renter. In addition, we have also now added an additional security deposit of $500 per vehicle, to be charged in advance. If the golf cart rentals are returned without damage, the deposit is refunded. When there is damage, it is deducted from the deposit prior to the refund. If the damage is greater than the $500 deposit, the customer must pay the balance upon return of the vehicle.
As you can see from our discussion, golf cart rentals can be a decent source of supplemental income for many dealers, but is not without hassles, including long distance deliveries, theft, and damages due to bad decisions. The next time you rent a golf cart from any dealer, be sure to ask their policies in advance and know what you are responsible for to avoid any potential surprises upon return.
By Michael Williams