Car Rental Market
Report ID: SQMIG25C2196
Report ID: SQMIG25C2196
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USA +1 351-333-4748
Report ID:
SQMIG25C2196 |
Region:
Global |
Published Date: July, 2025
Pages:
174
|Tables:
171
|Figures:
71
Global Car Rental Market size was valued at USD 106.41 Billion in 2024 and is poised to grow from USD 110.88 Billion in 2025 to USD 154.1 Billion by 2033, growing at a CAGR of 4.2% during the forecast period (2026–2033).
The global car rental market is expected to see a steady increase as a result of urbanization, increases in tourism, and increases in the use of on-demand mobility. Technology such as digital platforms and mobile apps can simplify the booking process and as awareness of shared mobility continues to grow, the need for individual's car ownership decreases. The car rental market is evolving and examples include contactless rental, creating electric vehicle fleets, and subscription-based models for customer ease, to capture potential value from business that could otherwise be lost by an increasingly large number of options across developed and emerging economies.
One important driver in all of this is the post pandemic recovery of tourism and business travel, especially in locations such as North America and Europe. International tourists are increasingly renting cars out of convenience and hygiene considerations and flexibility. Another driver of growth is the capability of combining rental services with digital platforms using technology to provide real-time tracking of cars as well as app-based booking, GPS capabilities, and non-linear pricing. All of this and it can help rental companies on their path to increasing utilization and operational efficiencies for companies, the majority of them will still be using a computer and a call center.
But its no surprise that the high cost of operating a rental company can include the cost of the vehicle itself, costs of insurance, maintenance, and fuel. Fuel prices have been erratic of as of late and inflation has increased the costs involved in running a rental company with further cost cuts to profitability. There are also a number of compliance requirements for rental operators to navigate through and understanding the local licensing, local taxes, restrictions from urban traffic, etc. can vary from jurisdiction to jurisdiction becoming even more complex. Vehicle supply shortages, particularly for new models and electric vehicles, continue to disrupt fleet expansion and limit service availability in key high-demand markets.
How is Artificial Intelligence Reshaping the Landscape of Car Rental?
AI-fueled systems are changing how fleets manage operations by making vehicle utilization more efficient, embracing predictive maintenance and enabling dynamic pricing. Where real-time tracking paired with telematics helps the companies project demand patterns - allowing businesses to make improvements for fleet availability by minimizing idleness, predictive analytics lead to early detection of mechanical problems. This results in fewer breakdowns and a reduction of more than 30 % on maintenance costs for fleet operators. Chatbots powered by AI support 24/7 reservation booking and customer service inquiries, allowing human resources to focus on value-added activities. The outcome is true integration of machine learning techniques, automation and telematics to achieve more revenue, greater operational efficiency, increased customer satisfaction and reduced costs throughout the rental lifecycle.
Car Inc entered into collaboration with Baidu’s Apollo on the launch of an autonomous car rental service - a market first. The rental company offers reservations 24/7 with for autonomous vehicles equipped with Apollo technology that can seat up to three passengers over a duration of 4 hours to 7 days. This is a significant advancement towards achieving driverless technology as a mainstream rental vehicle offering, creating new options and convenience for both car rental customers and clients - while creating challenges to regulatory and safety constraints of automated mobility.
Market snapshot - 2026-2033
Global Market Size
USD 102.12 billion
Largest Segment
Economic Vehicle
Fastest Growth
Economic Vehicle
Growth Rate
4.2% CAGR
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Global Car Rental Market is segmented by Vehicle Type, Booking Type, Rental Duration, Service Type, Customer Type, Application and region. Based on Vehicle Type, the market is segmented into Luxury Cars, Economy Cars, SUVs and Others. Based on Booking Type, the market is segmented into Offline and Online. Based on Rental Duration, the market is segmented into Long-term and Short-term. Based on Service Type, the market is segmented into Self-Driven and Chauffeur-Driven. Based on Customer Type, the market is segmented into Individual and Corporate. Based on Application, the market is segmented into Leisure/Tourism, Business/Corporate, Daily Commuting, Airport Transport, Outstation Travel and Others. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
How the Economy Cars are dominating the market?
The economy cars segment includes compact and fuel-efficient vehicles like Toyota Corolla, Hyundai i10, or Honda Fit, widely preferred for their affordability and practicality. These cars are ideal for budget-conscious travelers, solo commuters, and small families, making them the most rented category in the market. Economy cars are highly favored for daily commutes, short business trips, and leisure travel due to their lower rental rates and operating costs. Their compact design makes them suitable for urban driving and parking. The segment benefits from growing tourism, increasing ride-hailing activities, and rising demand for cost-effective mobility solutions in emerging and developed markets.
How the Luxury Cars are fastest growing segment of the market?
The luxury cars segment in the car rental market includes high-end vehicles such as BMW, Mercedes-Benz, Audi, and Lexus, which offer advanced features, superior comfort, and a premium driving experience. These vehicles are primarily rented by corporate clients, business travelers, and tourists seeking enhanced comfort or prestige. This segment thrives in urban areas, airport rentals, and tourist hotspots. Luxury car rentals are often chosen for special occasions like weddings, executive events, or VIP travel. The rising trend of experiential travel and increasing disposable income among consumers is fueling demand for short-term access to high-performance and stylish vehicles.
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What makes North America the top market for Car Rental in 2024?
North America leads in car rental thanks to advanced digital infrastructure, extensive travel networks, and strong tourism industry. Major providers leverage integrated mobile apps and loyalty programs, boosting fleet utilization and customer retention. The blend of business travel and leisure demand drives volume. Travel-friendly regulations and airport hub expansions reinforce growth, enabling seamless pickup/drop‑off services and margin optimization across diverse vehicle segments.
The United States Car Rental Market
In the U.S., car rental giants like Enterprise and Hertz dominate. The rise of fast-track digital rental kiosks at airports and app-based seamless pickups have enhanced customer convenience. In mid‑2024, Hertz introduced contactless rental lockers at six major airports, reducing wait times and operational overheads. This innovation aligns with evolving traveler preferences for speed and hygiene. Meanwhile, business travel recovery has boosted weekday utilization rates, pushing providers to scale hybrid and electric vehicle fleets to meet both sustainability goals and modern traveler demands.
Canada Car Rental Market
Tourism and intercity travel corridors linking provinces make up the car rental industry in Canada. Businesses have invested in making their digital platforms bilingual and have offered rental options for elevated electric vehicles (EV) for eco-friendly tourists. In late 2024, Avis Canada launched their first fully electric rental fleet in Vancouver and Montreal with Tesla Model Y and Nissan Leaf rental models. This pilot program aims to determine how often customers use car rental charging infrastructure and the level of customer engagement and adoption in 2024. There is also a notable increase in fleet turnover in the warmer summer months with hotel vacations and Ontario and provincial parks that also support building further rural garages and networks for remote pickup and drop-off capacity on holiday weekends.
How are Government Policies in the Asia-Pacific Driving the Growth of the Car Rental Market?
APAC car rental is surging with growing middle classes, digital adoption, and tourism rebounds. New mobility platforms, contactless solutions, and EV integration are advancing urban and leisure segments. Government support for EV growth, smart city initiatives, and increasing inter-regional travel are fueling rapid expansion, especially in urban tech-forward markets.
Japan Car Rental Market
Japan’s demand is fueled by inbound tourism and domestic road trips. Alignment between rental firms and smart city initiatives is accelerating digital transformation. In April 2025, Toyota Rent a Car introduced AI-powered kiosks in Tokyo and Osaka, enabling voice‑activated bookings, multilingual support, and instant vehicle-to-driver assignment. This enhances the experience for international visitors. Investment in plug‑in hybrid and electric models reflects long-term sustainability goals. Combined with new highway rest areas equipped with fast chargers, Japan is setting benchmarks in frictionless and green rental mobility.
South Korea Car Rental Market
South Korea’s rental market is growing rapidly due to urban micro-mobility initiatives and tourism. Rental companies are integrating rental options into ride‑hailing apps and national smart city transportation platforms. In February 2025, Lotte Rent‑a‑Car launched a mobile-only subscription service for Kia EV6 vehicles, allowing users to rent electric cars for flexible short-term periods. The service includes integrated payment, insurance, and charging via a single app. This flexible, subscription-based EV model caters to both tech-savvy millennials and international tourists in major cities like Seoul and Busan.
China Car Rental Market
China’s rental landscape is developing rapidly via technology-driven rental platforms, coupled with the omnipresence of electric vehicles. In cities, Car Inc and Turo-style services dominate the rental space; on July 2025, Car Inc partnered with Baidu Apollo to deploy its first fleet of Level-4 autonomous rental vehicles in Shanghai, enabling customers to summon self-driving vehicles via an app. The pilot project exhibits high-tech rentals with autonomous vehicles, as well as support for first/last mile airport and business district connectivity. This development represents an indicator of China’s foresight to transform car rentals into a high-tech autonomous mobility experience.
How is Europe Maintaining Its Position in Car Rental Market?
Europe’s car rental thrives on tourism connectivity, urban connectivity, and high EV adoption. Emphasis on sustainability, digitalization, and multi-modal integration is pushing providers to expand EV fleets, app platforms, and partnerships with public transit systems across major markets.
Germany Car Rental Market
Germany remains a key rental hub, particularly in auto‑heavy regions and drive-centric tourism. Rental providers are partnering with OEMs to offer electric vehicle fleets. In early 2025, Sixt introduced a fleet of fully electric Polestar 2 and Tesla Model 3 vehicles across ten major German airports, complete with fast‑charging stations. Their app now supports real-time EV range mapping and integrated charging payments. This aligns with Germany’s environmental goals and caters to tech‑savvy travelers seeking seamless EV options.
France Car Rental Market
Strong demand is returning to the French rental market due to the influx of tourists and road trips to ski season. Also, after emphasizing digital conveniences and eco-travel options through ski rentals, firms have been increasingly focused on expanding the range of their rental offerings. In late 2024, Europcar announced its subscription service for Peugeot e-208 EVs in Paris and Lyon, where it will offer weekly and monthly packages with charging cards included. Automating vehicle pick-up through a QR code gates is also being added at city bulletin board style car rental locations. There is unmistakably continued demand from this type of eco-friendly, flexible and innovative type of mobility by urban population and travelling tourists.
UK Car Rental Market
The UK rental market sees growth in city‑center and airport sectors. Demand for flexible booking and EV access is rising. In May 2025, Enterprise UK launched a pop-up EV hub at London Heathrow, stocking MG ZS EVs and leasing 12‑hour modular rental plans for tourists and business travelers. Their app provides predictive parking spot availability and pre-booked charging slots. This reflects a blend of digital convenience and green mobility approach, serving both eco-conscious customers and global travel patterns tied to London’s hub status.
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Car Rental Market Drivers
Surge in Tourism and Business Travel
Rise of App-Based and Contactless Rentals
Car Rental Market Restraints
High Operating Costs and Depreciation
Regulatory and Urban Access Barriers
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Global companies dominate the car rental industry. In the U.S the global car rental companies like Enterprise, Hertz, and Avis are moving faster to integrate EVs with many digital tools as they can to stay ahead of competition. Hertz for example has partnered with Uber and Tesla to deploy over 25,000 EVs in the US to rent. They also accelerated their efforts to cultivate a fully connected fleet through partnerships and mobility-as-a-service (MaaS) platforms in Europe. Regional competitors are finding ways to diversify to meet an ever-changing consumer demand with subscriptions and short-term EV leasing.
Top Player’s Company Profiles
Recent Developments in Car Rental Market
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected using Primary Exploratory Research backed by robust Secondary Desk research.
SkyQuest’s study suggests that the car rental market is changing rapidly due to the expansion of autonomous and electric vehicle fleets (e-fleets). First, the disruptive tendencies in the market are reflected through the use of artificial intelligence and digital platforms. These allow use of app-based rentals which offer keyless access, predictive pricing, real-time tracking of the fleet, and a more seamless rental experience overall. Second, the established high maintenance and operational costs such as maintaining the cars, insurance, and unpredictability of fuel cost continue to be a challenge moving forward. North America has the biggest market share as a result of the strength in tourism and business travel, supporting car rental companies' adoption of digital platforms and the challenge of maintaining fleets in response to the country's continued investment in digital infrastructure. Short-term app-based rentals are the quickest growing rental segment supported by on-demand demand and urbanization, especially for airport and urban companies which are labelled to the use of app-based rules and access. A second major trend highlighting possible car rentals is the growing sustainable mobility trend that has led more car rentals to electrify their fleets to put pressure on EV makers and contribute to erasing emissions goals across the globe.
| Report Metric | Details |
|---|---|
| Market size value in 2024 | USD 106.41 Billion |
| Market size value in 2033 | USD 154.1 Billion |
| Growth Rate | 4.2% |
| Base year | 2024 |
| Forecast period | 2026-2033 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
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| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
Methodology
For the Car Rental Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Car Rental Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
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Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Car Rental Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Car Rental Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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