Car Rental Market Analysis & Forecast: 2025-2032

Car Rental Market Analysis & Forecast: 2025-2032

Car Rental Market is estimated to be valued at USD 179.77 Bn in 2025 and is expected to reach USD 478.19 Bn in 2032, exhibiting a compound annual growth rate (CAGR) of 15% from 2025 to 2032.

Key Takeaways

• Based on Category, the On-Airport segment is expected to hold the largest share of the market in 2025, driven by tourism recovery and business travelers seeking convenience.
• Based on Car Type, the Economic cars segment is expected to lead the market with 31% share in 2025, favored for affordability, fuel efficiency, and widespread availability across markets.
• Based on Region, North America is set to lead the car rental market with 40% share in 2025. While, Asia Pacific is anticipated to be the fastest growing region.

Market Overview

The global car rental market is expanding steadily, driven by digitalization, urban mobility needs, and rising tourism. Growth is fueled by online bookings, EV adoption, and AI-based fleet management. North America leads in market share, while Asia-Pacific shows the fastest growth, supported by increasing demand for affordable and flexible mobility solutions.

Current Events and Its Impacts on the Car Rental Market

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What is the current consumer behavior towards car rental market?

Digital Bookings

• Over 70% of reservations are digital, with 85% of customers preferring mobile apps or websites over counter bookings.
• Gen Z now represents 12% of bookings, showing younger demographics are increasingly adopting rental services.
• Leisure travelers contribute 57% of U.S. rental revenues, highlighting the importance of digital convenience for tourism.
• Average booking time at counters has dropped to 4.5 minutes due to digital pre-check-ins.

Telematics & AI Fleet Management

• Telematics and AI reduce operational costs by 10–15%, optimizing fuel use, maintenance, and logistics.
• Predictive analytics cut vehicle downtime by up to 20%, ensuring higher fleet availability.
• AI-driven dynamic pricing boosts revenue per vehicle by 8–10%, aligning supply with demand fluctuations.
• Fleet compliance with new mobility regulations (e.g., emissions standards in Europe) are streamlined through automated monitoring.

Short-Term Rentals

• Short-term rentals (1–3 days) account for 60%+ of bookings, reflecting demand for flexible mobility.
• Urban centers drive most trips, with subcompact and compact cars making up 40–45% of rentals.
• Business travelers increasingly prefer short-term rentals for cost efficiency and convenience, especially in airport hubs.
• Short-term rentals align with shared mobility trends, competing with ride-hailing apps but offering more autonomy.

Segmental Insights

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Why do economic cars dominate rentals: affordability, efficiency, or broad availability?

In terms of car type, the economic segment is expected to hold 31% share of the market in 2025, favored for affordability, fuel efficiency, and wide availability. Cost-conscious customers, including tourists and business travelers, prefer these vehicles for short and long trips. Their practicality and accessibility make them the most popular choice, ensuring dominance across diverse markets worldwide.

For instance, in December 2024, Zoomcar has launched "Zoomcar Cabs," which lets people rent cars with drivers at a low cost. The service focuses on convenience, flexibility, and accessibility to attract customers who are concerned about price. It is in the economy car rental market and offers affordable transportation options for both business and leisure travelers. This changes the rental market in India.

What drives on airport rental dominance: tourism recovery or business traveler convenience?

In terms of category, the on-airport rentals segment is expected to lead the market with largest share in 2025, driven by tourism recovery and business travel. Airports provide immediate access to vehicles, making them the most convenient option for travelers. Strong demand from frequent flyers and international visitors ensures this segment remains the largest contributor to global rental revenues.

For instance, in December 2025, for travelers at the airport, CARWIZ International has started its "Fly & Drive" project, which makes it easy for them to get around by offering cars right at the airport parking lots. The program works with Croatia Airlines and tourist boards to boost tourism, lengthen the travel season, and make things easier for travelers by making airport rentals more accessible and user-friendly.

Regional Insights

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North America Car Rental Market Analysis & Trends

North America is dominating the car rental market with 40% share in 2025, due to strong tourism recovery, frequent business travel, and established airport rental hubs. Widespread car ownership culture, advanced infrastructure, and digital platforms enhance convenience. Rising preference for flexible, short-term mobility solutions further drives demand across urban and intercity travel.

For instance, in March 2025, Finalrentals has grown into North America with its opening at Orlando International Airport. The move strengthens its presence around the world and focuses on making it easier for airport travelers to rent cars. This planned expansion shows that the company is serious about growth, making it easier for customers to get to its locations and putting itself in a key U.S. car rental hub.

Asia Pacific Car Rental Market Analysis & Trends

Asia Pacific is anticipated to be the fastest growing region, due to rapid urbanization, booming tourism, and rising middle-class incomes. Digital adoption through mobile apps and self-drive platforms fuels convenience, while growing business travel and government support for smart mobility enhance accessibility. These factors make Asia-Pacific the fastest-growing rental region.

For instance, in October 2025, Enterprise Mobility introduced its car rental brands to Taiwan, which is a step toward expanding its global presence into Asia. This move makes the company more visible around the world and meets the growing need for mobility solutions. Enterprise makes it easier for travelers to get around in Taiwan, helps tourism grow, and puts itself in a good position in the fast-growing Asia-Pacific rental market.

Car Rental Market Outlook Country-Wise

The U.S. Car Rental Market Trends

In 2025, the U.S. car rental market is strong due to tourism is coming back, people are traveling for work extensively, and there are already established airport rental hubs. Digital platforms make things easier, and flexible mobility solutions draw in travelers who want to save money. The U.S. is the most significant market because more people are interested in electric cars and short-term rentals.

For instance, in November 2025, Tesla is officially renting cars for $60 a day in the US, starting in California and spreading to big cities. The program makes it affordable to rent Tesla cars, but only in the state where you live. It was made to increase demand after changes to tax credits. It encourages electric mobility and draws cost-conscious travelers from all over the country.

China Car Rental Market Trends

China's car rental market is in high demand in 2025 due to cities are growing quickly, domestic tourism is booming, and middle-class incomes are going up. Digital platforms and self-driving services make things easier, and government support for smart mobility and electric vehicles speeds up their use.

For instance, in July 2025, In China, Baidu Apollo and CAR Inc. launched the world's first rental service for self-driving cars. This groundbreaking program adds self-driving technology to rentals, giving travelers safe, easy, and futuristic ways to get around. The project is an important advancement forward for the industry and makes China a leader in smart transportation.

Market Report Coverage

Global Car Rental Market: Growth Drivers

• Transfer to online bookings: The growth of the global car rental market is driven by the significant advantage of convenient online booking services. This trend can be attributed to the widespread use of smartphones and the increasing internet usage worldwide. Furthermore, online booking platforms also provide attractive discounts and offers, contributing to the overall expansion of the global car rental market.
• Economic progress in developing countries: The global car rental market is poised for growth due to the rapid GDP expansion in developing countries. This economic progress is expected to boost the consumer spending power, coupled with increased disposable income, is expected to contribute to the market growth of car rental services.

Global Car Rental Market: Opportunity

• Increasing improvement in road infrastructure: Improved Road infrastructure across emerging economies and the rising number of leisure and business trips are projected to provide potential opportunities to the global car rental market. For instance, in December 2025, Maharashtra has set aside ₹1.5 lakh crore for highways, expressways, and urban mobility projects in order to modernize the transportation system. These projects will make it easier to get around, ease traffic, and minimize down on travel time. The investment is expected to boost trade, tourism, and development in the area, which will help the state's economy grow and make it easier for people to get around in cities.

Global Car Rental Market: Trends

• Introduction of mobile apps for car renting facilities: Various industry players are introducing mobile apps for customers in order to ease the booking process and allow consumers to choose the vehicle of their choice from the portfolio. For instance, in October 2025, RentYae released a mobile app in the UAE, which has added to its fleet of cars and yachts. The platform gives users easy, on-demand access to rentals, which shows how digital innovation is changing how people get around. This move shows that there is a growing need for technology-based, flexible solutions in both the luxury travel and everyday transportation markets.

Analyst Opinion (Expert Opinion)

• The car rental market is still extremely robust, due to an increase in traveling, the need for urban mobility, and changes in the way individuals book cars online. North America is responsible for more than one-third of all rental activity around the world. This is owing to its extensive road network, high vehicle availability, and strong demand for rentals at airports. Europe is next, partly due to cross-border travel and short-term rental use. Asia Pacific is seeing faster growth in booking volumes given numerous individuals are traveling for business and pleasure.
• Fleet data show the size of the industry is more than 22 million rental vehicles available around the world. About 40% of the total fleet deployment is made up of compact and economy vehicles. This is since customers want cars that are cheap and get good gas mileage. Airport locations are still the most important demand channel due to they have a lot of transactions and a great deal of passengers, as well as travel services that work together.
• Digitalization is very important for the way the market does. More than 70% of reservations are made through online platforms like mobile apps and aggregator websites. Dynamic pricing tools and fleet optimization software have made it easier to use vehicles and cut down on idle time. Demand seasonality has remained clear, with peak travel times seeing bookings rise by 30–35% compared to off-peak months.
• In general, the car rental market is moving toward operations that are more technology-driven, offer more options for getting around, and make fleets more efficient. This is going to maintain the industry relevant in global transportation systems for a long time.

Global Car Rental Market: Key Developments

• In October 2025, Turo arrived with a new way to own a car that is different from leasing or financing. Its peer-to-peer car sharing platform lets people share cars with each other. This new model makes it easier for people to get cars by making them more flexible and affordable. Turo strengthens its role in modern transportation and changes the traditional car market by combining the ideas of renting and owning.
• In April 2025, Gowheelo recently launched a new car rental business and is also changing its brand name. This is part of its goal to offer more ways to get around. This step puts it in the car rental business, which makes it easier for travelers to get around and strengthens its position in the market. It also encourages new ideas and growth in the changing transportation industry.
• In May 2023, Hertz (American Car Rental Company) and the City of Orlando provides public services launched Hertz Electrifies Orlando, a partnership to accelerate electric vehicle adoption, expand EV rentals and charging infrastructure, and provide education and training opportunities
• In February 2023, Sixt SE (offers vehicle rental services to corporate and individual consumers) inaugurated a new branch at Toronto Pearson International Airport (YYZ) by providing premium car rentals. Sixt is strategically expanding in North America following the establishment of a branch in Vancouver, Canada.

Market Segmentation

• By Category
• • Intercity/Local Usage
  • On-Airport
  • Intra-City/Outstation
  • Others
• By Car Type
  • Luxury Cars
  • Executive Cars
  • Economy Cars
  • SUVs
  • MUVs
• By Region
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Global Car Rental Market: Key Companies
  • Enterprise Holdings
  • The Hertz Corporation
  • Avis Budget Group
  • Europcar Group
  • Carzonrent
  • Sixt SE
  • Al Futtaim Group
  • Localiza - Rent a Car
  • Eco Rent a Car
  • GlobalCARS

Sources

Primary Research Interviews

• Car Rental Service Providers (Global & Regional)
• Fleet Management & Leasing Companies
• Airport & Off-Airport Rental Operators
• Online Travel Agencies (OTAs) & Mobility Platforms
• Automotive OEMs & Fleet Supply Partners
• Telematics & Vehicle Tracking Solution Providers
• Corporate Travel & Mobility Managers
• Others

Databases

• Bloomberg Terminal
• Thomson Reuters Eikon
• IHS Markit
• Euromonitor International
• S&P Global Market Intelligence
• Statista
• Others

Magazines

• Automotive News
• Business Travel News
• Fleet Europe Magazine
• Travel Weekly
• International Car Rental News (ICRN)
• Others

Journals

• Journal of Transport Economics and Policy
• Transportation Research Part A: Policy and Practice
• Journal of Travel Research
• International Journal of Automotive Technology and Management
• Others

Newspapers

• Financial Times
• The Wall Street Journal
• Reuters
• Bloomberg News
• The Economic Times
• Others

Associations

• American Car Rental Association (ACRA)
• European Car Rental Conciliation Service (ECRCS)
• British Vehicle Rental and Leasing Association (BVRLA)
• International Air Transport Association (IATA) – Travel & Mobility Insights
• World Tourism Organization (UNWTO)
• Others

Public Domain Sources

• U.S. Bureau of Transportation Statistics (BTS)
• U.S. Department of Transportation (DOT)
• Eurostat – Transport & Tourism Data
• World Bank Open Data
• International Transport Forum (ITF) – OECD
• National Travel & Tourism Offices
• Others

Proprietary Elements

• CMI Data Analytics Tool
• Proprietary CMI Existing Repository of Information for the Last 8 Years

*Definition: A car rental service is a company that arranges for customers to rent cars at reasonable prices. Typically, this agency is situated close to busy city centers and airports. People who need a car temporarily typically choose car rental services. Additionally, those who own damaged cars and are looking for repairs or insurance compensation could also find car rental services to be ideal. Additionally, car rental services offer extra advantages like child safety seats, entertainment systems, portable Wi-Fi, and navigation systems.