Car hire business in Kenya (2026): licences, insurance, rates and risks

A car hire business rents cars out by the day or week. The customer either drives the car (self-drive) or is driven by your driver (chauffeured). It is a different business from putting a car on Uber or Bolt. Your customers are strangers who take the car away for days, not a driver you know who pays you every evening. That changes the licences, the insurance and, above all, the risks.

Licences you need

1. A registered business. A registered business name or limited company, and a KRA PIN.

2. A county business permit. Every county charges a trade permit. In Nairobi it is the Unified Business Permit (UBP), which combines the county's licences into one permit. The fee depends on the business category and size, so check the county's current schedule when you apply.

3. A TRA licence if you serve tourists. The Tourism (Tourism Enterprises) Regulations, 2025 (Legal Notice No. 200 of December 2025) list tourist service vehicle hire as a Class C tourism enterprise. A "tourist service vehicle" includes private hire vehicles run by a licensed tourism enterprise and used to carry tourists. The fees for Kenyan citizens are:

Non-citizens pay US$100 to apply and US$1,500 a year. If your customers are only residents on errands and weddings, ask TRA in writing whether you need the licence. If you take airport pickups or safari bookings, plan on needing it.

4. For chauffeured hire, PSV papers. A chauffeur-driven car carries paying passengers. Old Mutual, for example, will insure a chauffeur-driven private hire car only if it is "fully compliant with the PSV rules". In practice that means NTSA inspection, and a driver with a PSV badge — see what a PSV driver needs and the NTSA fees.

Insurance: the cover has its own name

A private car policy is written for a car that is not used for hire. Insurers sell separate classes for hire, and Engishu Insurance's commercial motor list shows the three that matter:

• PSV Motor (Self Drive): for cars "used for the insured's business of self-drive rentals".
• PSV Motor (Private Hire — Chauffeur Driven): for cars rented out with a driver.
• PSV Motor (Taxi): for taxis and ride-hailing cars.

Tell the insurer exactly how each car will be used, and get the class written on the policy. The wrong class gives the insurer a reason to refuse a claim. The PSV insurance guide explains the levies and how to check that an insurer is sound.

Hire firms then pass some of the risk to the customer. Bamm Tours, for example, includes a collision damage waiver but caps the hirer's own excess at 10% of the car's value, and excludes tyres, windscreens, wheels, the underside and the interior.

What Nairobi firms charge

Published self-drive rates from Nairobi companies:

Other published terms worth copying:

• Chauffeur fee: Barguts adds KSh 2,500–4,000 a day for a driver.
• Mileage caps: ICABS says most rentals include 100–250 km a day, with extra kilometres charged from KSh 30 (economy) to KSh 120 (premium 4x4).
• Fuel: full-to-full is the norm.
• Who may hire: Bamm Tours rents only to drivers aged 29–70 with at least four years of driving, and asks for a licence, an ID or passport, and a next of kin.

Utilisation: the number that decides profit

A daily rate only earns on the days a car is out. No Kenyan body publishes utilisation figures for hire cars, so work it out from your own bookings. As an example: a Fielder at KSh 4,500 a day earns KSh 67,500 a month if hired for 15 days, and KSh 36,000 if hired for 8. Insurance, the tracker, cleaning, servicing and the loan are due either way.

Compare that with the same car on a ride-hailing daily amount, using the daily amount calculator. Fewer, higher-paid days do not always beat steady lower ones. Check your tax position with the turnover tax calculator.

The real risk: theft and fraud

The DCI lists car hire scams among the ways cars are stolen in Kenya. In a May 2025 operation it arrested 28 suspects and recovered 22 stolen vehicles, many already sold to buyers in Kenya or taken to Uganda and Tanzania. In June 2026 detectives arrested a man accused of hiring a Toyota Fielder in Malindi, changing its number plates, and using it as the getaway car in a violent robbery in Mombasa.

Basic defences:

• Verify the person, not the paperwork. Meet them, see the original ID and licence, take a photo, and call the next of kin before handing over keys.
• Take a real deposit, paid before collection, and do not release a car on a promise.
• Fit a tracker with alerts for leaving town, and set an engine immobiliser where you can.
• Start new customers short. One or two days first, longer hires once they have returned a car on time.
• Never hand over the logbook, and keep copies of every hire on file.

The hire contract

Use a written agreement for every hire, signed before the keys leave your hands. It should name:

• the hirer, their ID and licence number, and any extra drivers allowed
• the car, its plate, mileage and fuel level, with photos of every panel
• dates and times out and back, the daily rate, the late-return charge and the mileage cap
• the deposit, what can be deducted from it, and when it is refunded
• where the car may go (towns, cross-border), and that it may not be used for ride-hailing, sub-hire or carrying goods for pay
• what the hirer pays after an accident, the excess and the exclusions
• what happens if the car is not returned: you will report it to the police as stolen

If a hirer leaves owing money, a demand letter is the first step, and the small claims court the next.

Where Gariboss fits — and where it does not

Gariboss is not booking software for short self-drive hires. It fits when you hire a car out long-term to a ride-hailing driver for a daily amount. You set the amount per car, rest and garage days are not counted as owed, the driver pays into your own M-Pesa till, payments are matched automatically, and you get an evening WhatsApp report of who has paid.