Taking a Chunk of the Replacement Market

When Mike Dabish found out his cousin, Norman Dehko, was referring clients from his 12 affiliated body shops to the major insurance replacement rental providers, he saw a business opportunity he couldn’t pass up. Those 12 body shops equated to about 40 rental cars out at any given time, income that could’ve been kept within the family.

“I said, ‘How about if I come see you tomorrow and we start a company?’” says Dabish.

In just one month, Dabish pulled everything together to start the Detroit-based Rent A Ride USA with his cousin as his business partner. “We went to the Manheim auction,” says Dabish, who has owned and run various business ventures since the age of 18. “We bought 10 cars, and when we rented those out, we bought another 10, and then another.”

Now, just two years in the business, Rent A Ride USA owns 151 vehicles.

Finding a Niche

Dabish realized early on that his insurance clients, especially those with families, appreciate a larger rental vehicle than a subcompact. And he realized he could provide a roomier, higher grade car for about the same rate the competition charges for a smaller car. Because he buys used at auction, holding costs for his larger cars are about the same as buying new subcompacts.

“I’m not taking a loss on renting the bigger cars,” Dabish says. “Would you rather drive a 2006 Ford Taurus or a little Chevy Aveo?”

He believes this extra courtesy has made Rent A Ride USA grow.

Dabish rents vehicles next to Dehko’s main collision shop. Half of his business comes directly from the collision shops, and a quarter comes from repeat customers who rent for general purposes because they like the service.

The shop isn’t located on a main street, so walk-ins are minimal. Still, Dabish says he doesn’t need advertising. In the beginning, he went to other body shops and offered special deals to get more business, but “now I’m so busy that I don’t need to do that,” he says.

Dabish estimates he’s taken a third of his main competitor’s business, which has three neighboring rental locations. Not realizing Dehko is co-owner of Rent A Ride, the competitor tried to win back the business. “They went to my partner and said, ‘Why aren’t you using us?’” Dabish says. “They started taking him to lunch. And then he said, ‘We own the company.’”

Business Basics

Dabish is able to buy the vehicles outright with profits from his other businesses instead of financing. “That extra percentage of interest that you’re paying for all these cars is extra profit,” he says.

Dabish says he and Dehko make sure to run each vehicle as a separate profit center. “Basically, Rent A Ride is being run and operated by me. My partner comes in when I need him,” says Dabish.

CONTINUED:  Taking a Chunk of the Replacement Market
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