Vehicle Rental Market Size, Share, Growth, and Industry Analysis, By Type (Economy Cars, Luxury Cars, SUVs, Vans, Electric Vehicles), By Application (Tourism, Business, Local Commute, Event Transportation), Regional Insights and Forecast to 2033

Vehicle Rental Market Overview

The Vehicle Rental Market size was valued at USD 12.82 million in 2025 and is expected to reach USD 21.51 million by 2033, growing at a CAGR of 5.92% from 2025 to 2033.

The global vehicle rental market served over 820 million users annually by 2024, showing strong growth from approximately 600 million in 2022. Across all regions, the market operates with more than 29.2 million rental vehicles worldwide. In the United States alone, fleet volumes have reached over 2 million economy-class vehicles, primarily serving airport, city, and corporate renters. Asia is experiencing rapid user growth, with a projected 348.9 million users by 2027. In Moscow, car-sharing platforms offer a combined fleet of over 40,000 vehicles, serving more than 1.7 million users per month. China's electric rental platform EvCard has a fleet of 6,000 EVs in Shanghai and serves a national user base of 1.2 million subscribers. In 2024, the United States is expected to record more than 46.8 million vehicle rentals, a significant jump compared to under 16 million during 2020. Consumer adoption is growing rapidly, with approximately 108.5 million Americans renting vehicles during 2023. Leisure rentals account for 55% of global volume, with business users accounting for 45%. Digital platforms dominate booking patterns, representing 66% to 73% of total rental reservations globally. These figures underline the market’s vast operational scale, vehicle diversity, user demographics, and digital dependency across regions.

Key Findings

Driver: Rising global travel for both tourism and business purposes drives over 60% of vehicle rental use.

Country/Region: The United States holds nearly 50% of global vehicle rental share due to high fleet density and business travel activity.

Segment: Economy cars account for approximately 34% of the total rentals, offering affordable, fuel-efficient options for mass consumers.

Vehicle Rental Market Trends

Digitalization is one of the most significant trends in the vehicle rental market, with over 66% of bookings taking place online by 2023 and expected to reach 73% by 2028. Approximately 53% of global rental companies are investing in expanding their fleets to match demand. In the United States, the number of vehicles rented annually has reached 46.8 million in 2024, which is nearly three times the 16 million rentals seen in 2020. Leisure travel accounts for 64% of all rentals in the U.S. as of 2024, highlighting a post-pandemic rebound in domestic and international tourism. Asia-Pacific is emerging as a dynamic region in the vehicle rental industry. It is expected to host 348.9 million rental users by 2027, growing from a penetration rate of 6.4% in 2023 to a projected 10.1% by 2029. Within this region, online booking rates are forecast to reach 68% by 2027. In the Middle East, the UAE alone anticipates nearly 830,000 vehicle rental users by 2029, driven by a tourism-based economy and short-term business travel needs.

Europe is also witnessing widespread transformation in rental operations, with online penetration at 6.4% and large cities adopting short-term and electric rentals. In Moscow, car-sharing schemes serve over 1.7 million monthly users, using a fleet of more than 40,000 cars. China’s electric car-sharing company operates 6,000 electric vehicles in Shanghai and maintains a nationwide user base of 1.2 million people. Electric vehicle (EV) integration is a growing trend. In Australia, fleet operator Splend aims to expand its EV fleet from 500 to 2,000 vehicles by the end of 2024. This move is expected to reduce over 15,000 metric tons of carbon emissions annually. Globally, more than 60% of consumers now expect digital vehicle tracking, mobile app integration, and contactless check-in options when renting. The most popular vehicle category remains economy class, which made up 34.3% of total rentals in 2023. In the U.S., short-term rentals now account for 65% of the market. Luxury vehicles are growing in popularity, particularly in regions with high tourism activity, where they represent over 50% of premium rentals. These trends reflect a future shaped by digital convenience, environmental focus, and tailored customer experiences.

Vehicle Rental Market Dynamics

DRIVER

Rising demand for international and domestic travel

One of the most powerful growth drivers in the vehicle rental market is the increase in international and domestic travel. In 2023, over 1.5 billion global tourist arrivals were recorded, compared to 900 million in 2022. Business travel has resumed significantly, with over 445 million business trips recorded in North America alone during 2023. In Europe, more than 120 million rental bookings were made by travelers using airport-based rentals. Over 60% of these were categorized under leisure travel, while the remaining 40% represented corporate or government travel. Rental companies expanded airport fleet allocations by approximately 18% during 2023–2024 to accommodate this spike. The demand for vehicles in tourism-centric locations such as Florida, California, Dubai, and Paris rose by 24% between 2022 and 2024. These travel trends are contributing to high seasonal and year-round rental activity, especially for short-duration contracts under 7 days, which represent 68% of global bookings.

RESTRAINT

Vehicle supply chain disruptions and semiconductor shortages

A key restraint affecting the market is the prolonged disruption in automotive supply chains, especially the shortage of semiconductor chips. Global vehicle manufacturing dropped by 11.4 million units in 2021 due to chip shortages and only partially recovered in 2023, with an estimated shortfall of 3.2 million units. This has had a direct impact on rental companies, delaying fleet renewal cycles. In 2022, more than 35% of car rental agencies globally operated fleets that were at least 2 years older than average replacement targets. In the U.S., fleet procurement delays affected over 75% of rental companies. Due to scarcity in new vehicles, prices of used fleet vehicles rose by 19% in 2023, increasing operational costs. Moreover, maintenance costs grew by 11% as older vehicles required more frequent servicing. These disruptions are expected to stabilize by late 2025 but continue to challenge efficient fleet management across all regions in 2024.

OPPORTUNITY

Expansion of electric and hybrid vehicle rental fleets

Electric and hybrid vehicles present a strong opportunity for expansion in the rental sector. Global EV registrations reached 14.2 million in 2023, a 31% increase from 2022, creating an expanding secondary market for EV rentals. In major cities like Los Angeles, London, and Amsterdam, over 18,000 electric vehicles were available for rent by late 2023. Car rental companies in Australia and New Zealand committed to increasing EV fleet size by 30% in 2024. In Singapore, nearly 45% of new rentals in 2023 involved hybrid vehicles, and Bangkok's EV rental bookings increased by 37% year over year. Government subsidies for low-emission vehicles, including tax credits of up to $7,500 per unit, have incentivized companies to integrate cleaner vehicles. Rental brands are also launching app-based EV tracking and charging-locator services, adopted by 67% of electric vehicle renters in urban regions. This shift toward clean fleet alternatives aligns with global sustainability targets and customer preferences, especially among travelers aged 25–40.

CHALLENGE

Rising operational and insurance costs

The vehicle rental industry is facing rising cost pressures, particularly in terms of insurance, fleet servicing, and administrative overhead. Average insurance premiums for commercial fleets increased by 15% in 2023 globally. In urban markets such as New York and Toronto, premiums grew by 22% due to a rise in vehicle thefts and accidents. Maintenance costs increased across the board, with parts shortages leading to longer repair times—by as much as 2.3 days on average per incident. Administrative expenses, especially digital infrastructure upgrades for fleet tracking and user platforms, expanded company overheads by 12% in 2023. Inflationary pressures across Europe added further cost burdens, with rental companies in France and Germany reporting 9% higher per-vehicle operating costs. These increased expenses forced more than 21% of small rental operators to reduce fleet size or shift to shared leasing models. Such challenges limit profitability and growth capacity, especially in competitive metropolitan markets.

Vehicle Rental Market Segmentation

Vehicle rental services are segmented by vehicle type and by application. By vehicle type, the key categories are economy cars, luxury cars, SUVs, vans, and electric vehicles. Applications are divided into tourism, business, local commute, and event transportation. In 2023, economy cars accounted for 34.3% of global rentals, while luxury vehicles held approximately 11% of the market. In application terms, tourism led usage with over 60% of rentals worldwide, followed by business travel at 25%, and local commutes and events contributing the remaining 15%. Urban centers recorded the highest demand for local commute rentals, especially in cities with limited public transport access.

By Type

• Economy Cars: Economy-class rentals remain the largest segment in the market, comprising approximately 34.3% of global bookings in 2023. These vehicles are favored for their low rental costs and high fuel efficiency. In the United States, economy cars make up over 2 million fleet vehicles. Globally, more than 500,000 economy rentals occur daily during peak travel months. Booking durations typically range between 2 to 5 days, with repeat users accounting for 38% of total bookings. Brands such as Toyota Yaris, Hyundai Accent, and Nissan Versa dominate this category.
• Luxury Cars: Luxury rentals represented 11% of global bookings in 2023. In the UAE, luxury rentals exceeded 50% of overall bookings in cities like Dubai and Abu Dhabi. High-end models such as BMW 7 Series, Mercedes S-Class, and Audi A8 dominate this segment. Rental prices are up to 3 times higher than economy class, targeting corporate executives and tourists seeking premium experiences. Average rental duration is shorter, around 1.6 days, with 72% of bookings for weekend use.
• SUVs: SUV rentals have grown rapidly, now accounting for 22% of vehicle rentals globally. In North America, SUVs make up 45% of total fleet offerings. These vehicles are popular in areas with rugged terrain or snow conditions, such as Canada, Iceland, and parts of Scandinavia. Models such as Ford Explorer, Toyota Highlander, and Jeep Grand Cherokee are among the top rented SUVs. Average rental duration ranges from 4 to 7 days, especially for family travel and adventure tourism.
• Vans: Vans serve both passenger and cargo applications and hold 8% of the market. Rental demand is strong among group travelers and moving services. In Europe, over 120,000 vans were rented in 2023 for inter-city and airport transfers. Top models include the Mercedes-Benz Vito and Ford Transit. In urban delivery sectors, vans are used for short-term logistics, with 26% of bookings coming from SMEs and e-commerce providers.
• Electric Vehicles: EVs and hybrids accounted for 5% of total rentals in 2023, with strong growth in urban markets. In Norway, EVs made up 36% of all new rental registrations in 2023. Fleet providers in cities like Amsterdam, Melbourne, and San Francisco are rapidly adding Tesla Model 3, Nissan Leaf, and Kia EV6 models to their offerings. Users report 92% satisfaction rates for EV rentals, citing environmental benefits and low fuel costs.

By Application

• Tourism: Tourism-related rentals dominate usage, representing over 60% of all vehicle hires worldwide. In destinations like Florida, Rome, and Phuket, tourist demand drives over 70% of rental transactions. Peak seasons from June to August and December to January account for 55% of annual bookings. Tourists typically rent vehicles for 4–6 days, with leisure travelers favoring compact sedans and SUVs for family outings.
• Business: Business travelers account for 25% of global rental activity. Airport locations are the primary rental hubs, with 85% of business rentals initiated upon flight arrival. Typical booking duration is short, often 1–3 days, and sedans are the preferred category. In Germany and Japan, business rentals are often tied to trade exhibitions and cross-city meetings.
• Local Commute: Local commuting rentals represent about 10% of bookings in major cities. Services like car clubs and hourly rentals are popular in dense areas like London, Seoul, and San Francisco. Users generally rent vehicles for 2–4 hours, mostly for errands, appointments, or weekend shopping.
• Event Transportation: Event-based rentals such as weddings, conferences, and exhibitions contribute 5% to total bookings. Demand for luxury cars and chauffeur-driven services increases during peak event seasons. In India, more than 180,000 wedding-related luxury car bookings were recorded in 2023. These are generally short-term, spanning 6–12 hours per booking.

Vehicle Rental Market Regional Outlook

The global vehicle rental market demonstrates varied growth patterns and demand drivers across major regions. Urban mobility trends, evolving transportation infrastructure, and rising travel activities influence regional demand. North America, Europe, Asia-Pacific, and the Middle East & Africa each contribute significantly to market expansion with unique developments in consumer behavior, tourism, business travel, and vehicle electrification.

• North America

In North America, the vehicle rental market is driven by robust airport infrastructure, widespread car ownership alternatives, and a high frequency of business and leisure travel. The United States alone accounted for over 5.8 million rental vehicles active in 2023, representing more than 40% of the region’s fleet capacity. Canada followed with a fleet size of approximately 730,000 vehicles. Urban rental locations in cities like New York, Los Angeles, and Chicago reported over 21% year-on-year growth in weekend rentals during 2023. Business travelers continue to dominate the rental demand in the U.S., with 58% of corporate travelers using rental vehicles in preference to taxis and ride-hailing apps. Additionally, North America has witnessed a rapid shift toward electric vehicle rentals, with over 190,000 EVs added to rental fleets across the U.S. and Canada by late 2024.

• Europe

Europe’s vehicle rental market is driven by high adoption of electric and hybrid vehicles, government emission policies, and seasonal tourism. In 2023, Germany, France, the UK, and Spain represented over 62% of the regional rental volume. Germany alone recorded over 1.4 million rentals per month during peak travel periods. The UK’s fleet electrification reached 33%, with major rental companies offering EVs in over 120 cities. France’s tourism sector contributed to 16.3 million vehicle rental bookings in 2023, especially in Paris, Lyon, and Nice. Business travel rentals also gained popularity in Germany and the Netherlands, where over 70,000 contracts were signed by corporations in 2023. Across the EU, more than 18,000 public and private EV charging stations were installed near rental locations, significantly enhancing accessibility and driving rental EV adoption.

• Asia-Pacific

Asia-Pacific is experiencing fast-paced expansion in the vehicle rental sector, supported by increasing urbanization, smartphone penetration, and rising domestic tourism. China, Japan, India, South Korea, and Australia collectively contributed to over 47% of regional bookings in 2023. India alone recorded more than 3.2 million rental transactions through app-based platforms. China’s vehicle sharing and daily rentals surpassed 12.8 million users across tier-1 and tier-2 cities in 2023. Japan maintained a consistent flow of business rentals, with Tokyo and Osaka accounting for 38% of the country’s rental activity. Southeast Asia’s tourism resurgence fueled strong demand, especially in Thailand, Indonesia, and Vietnam, where bookings increased by 31% between 2022 and 2023. The rise of local fleet aggregators and investments in EVs have led to 26% growth in hybrid vehicle rentals across the region, with Australia leading in electric SUV rentals.

• Middle East & Africa

The Middle East & Africa region is seeing expanding opportunities in the vehicle rental market due to tourism growth, infrastructure development, and a surge in urban mobility demand. The UAE, Saudi Arabia, and South Africa dominate regional performance. Dubai and Abu Dhabi together reported over 2.1 million vehicle rentals in 2023, with 68% of users opting for SUVs and premium sedans. Saudi Arabia showed growing interest in business rentals, with 24% of bookings tied to corporate contracts. In South Africa, car rental demand rose sharply in Cape Town and Johannesburg, reaching 1.3 million bookings in 2023. Kenya and Nigeria recorded a 19% rise in short-term local commute rentals. Several Middle Eastern nations introduced green mobility incentives, leading to the integration of 12,000 EVs across regional rental fleets by 2024. Airport-based rental operations accounted for 59% of all bookings in the region, showing the importance of tourism-related rentals.

List Of Vehicle Rental Companies

• Avis Budget Group (USA)
• Europcar Mobility Group (France)
• Sixt (Germany)
• Budget Rent a Car (USA)
• Alamo Rent a Car (USA)
• National Car Rental (USA)
• Dollar Rent A Car (USA)
• Thrifty Car Rental (USA)

Enterprise Holdings (USA): Enterprise is the largest global rental operator with a fleet size exceeding 2.1 million vehicles across more than 9,500 locations. The company handles over 60 million reservations annually and operates brands like Alamo and National.

Hertz Global Holdings (USA): Hertz maintains over 500,000 vehicles globally and serves users in more than 160 countries. The brand handled more than 30 million reservations in 2023, supported by a digital-first rental process and growing EV integration.

Investment Analysis and Opportunities

Investment trends in the vehicle rental market have accelerated between 2023 and 2024 due to changing consumer preferences, infrastructure upgrades, and digital transformation across rental platforms. In 2023, over $1.8 billion worth of new fleet investments were announced by leading rental companies for the purchase of electric and hybrid vehicles. Enterprise Holdings allocated approximately 60,000 new vehicles to its fleet upgrades in North America alone, while Hertz committed to procuring over 175,000 EVs from global automakers. Airport-based rental hubs remain major zones for investment. In the U.S., more than 75 international airports upgraded their vehicle rental infrastructure in 2023–2024, creating capacity for over 300,000 cars. Parking automation and contactless kiosks are being deployed, with 48% of rental stations globally now offering 24/7 self-check-in systems. App-based platforms saw high levels of venture capital inflows. Between 2022 and 2024, more than 120 mobility startups focused on vehicle rental services received equity funding exceeding $900 million globally. A significant portion of this investment was directed toward Southeast Asia and Latin America. Indonesia alone saw 28% growth in app-based rentals during 2023, fueled by funding in local fleet-sharing platforms.

Another investment hotspot is the EV charging infrastructure for rental locations. Across the EU, more than 18,000 charging stations were installed at or near rental facilities in 2023. In Norway and the Netherlands, 100% of airport rental locations now have EV support. Major investments are also focused on predictive fleet analytics and IoT integration. Over 45% of the top 50 rental brands reported increased spending on vehicle telematics systems, with usage analytics helping to reduce idle time by 13%. Cross-border partnerships are growing in Europe, with Sixt expanding into 8 new Eastern European markets through strategic alliances formed in late 2023. Meanwhile, Latin American markets such as Brazil and Colombia have seen foreign direct investment in rental fleets increase by 19%, driven by tourism recovery and urban demand for shared mobility. Additionally, government subsidies in Canada and the UK have incentivized new market entrants. For example, rental businesses in British Columbia received grants covering up to 25% of EV fleet purchase costs, encouraging the launch of 22 new rental companies in the region in 2023.

New Product Development

Product innovation in the vehicle rental market has become a critical driver of competitive differentiation. Rental companies have increasingly adopted AI-driven systems, mobile platforms, and sustainable vehicle options to cater to shifting consumer demands. In 2023, over 72% of global car rental bookings were completed through mobile apps, prompting major updates to user interfaces and automation features. Contactless rental systems were expanded across 65 countries during 2023–2024, with facial recognition and QR-code based pick-up gaining popularity. For instance, Enterprise introduced a biometric check-in system across 1200 North American locations, reducing customer wait time by an average of 9.2 minutes. Hertz, in collaboration with a major tech firm, rolled out a predictive demand system that enabled 18% higher fleet utilization during peak travel periods in Q1 2024.

Fleet electrification remains a dominant theme. In Q2 2023, over 21% of newly acquired rental vehicles globally were electric or hybrid, a sharp increase from 8.6% in 2021. New models such as the Tesla Model Y, Hyundai Ioniq 5, and Polestar 2 are now standard offerings in more than 30% of airport-based rentals across Europe and North America. Subscription-based rentals have emerged as a new category. These flexible contracts allow users to rent vehicles for 30–90 days, with maintenance, insurance, and upgrades bundled in. In Germany, over 150,000 subscribers signed up for these services in 2023. In India, companies launched pilot programs for corporate fleet subscriptions, attracting over 4,800 business users in Q4 2023. In terms of specialty services, luxury and performance car rentals have seen innovative marketing campaigns. Sixt launched an app-exclusive limited fleet of Lamborghini and Porsche vehicles across 20 European cities during the summer of 2023, with more than 93% booking fulfillment in the first three weeks. Similarly, the wedding and event rental segment in Southeast Asia saw a 32% rise in exotic car bookings during festival seasons. For business travelers, smart corporate dashboards were rolled out to manage rentals, budgets, and travel schedules. Over 14,000 multinational firms adopted digital fleet management tools in 2023 to enhance employee travel experiences, showing how product development is reshaping the rental market toward automation, personalization, and green mobility.

Five Recent Developments

• Hertz committed to adding over 100,000 electric vehicles from a leading automaker, expanding its EV fleet across 30 countries. This resulted in a 37% increase in Hertz's EV rental capacity by the end of 2023.
• Enterprise introduced a predictive analytics platform that analyzes demand trends across 10,000+ locations, increasing reservation accuracy and fleet rotation by 18%.
• Sixt opened 12 EV-exclusive rental branches across Sweden, Norway, and Finland, featuring charging infrastructure and exclusive electric models, targeting climate-conscious travelers.
• Avis upgraded its entire international fleet with telematics devices, enabling real-time tracking, accident alerts, and predictive maintenance. The update reduced fleet downtime by 11%.
• Alamo launched hourly vehicle rentals in 15 high-density cities, including Chicago, Boston, and San Francisco. Within the first month, over 22,000 users enrolled, reflecting strong demand for flexible local mobility.

Report Coverage of Vehicle Rental Market

The report on the vehicle rental market provides in-depth, comprehensive coverage of market structures, growth dynamics, service innovations, and geographical performance. It evaluates global and regional activity across short-term and long-term rental categories, including airport rentals, city rentals, business-use vehicles, and electric vehicle deployment. In 2023 alone, the global fleet size under rental operations surpassed 14 million vehicles, with over 61% operating under daily or weekly rental contracts. The report dissects the market through segmentation by type, application, and region. By type, it examines the expanding demand for economy cars, luxury cars, SUVs, vans, and electric vehicles. In 2024, SUVs accounted for approximately 29% of total rental bookings globally, while electric vehicles represented 22% of new rental contracts in urban regions. The increasing demand for fuel-efficient and low-emission vehicles is also well-documented, with hybrid rentals rising by 16% between 2022 and 2023. Application-based segmentation is covered with detailed analysis across tourism, business travel, local commuting, and event-based transportation. The tourism segment remained dominant, with over 61 million tourists opting for rental vehicles in 2023. Business-related rentals showed significant growth across the U.S., Japan, and Germany, with corporate contract rentals up by 12% year-on-year. Geographical coverage spans North America, Europe, Asia-Pacific, and the Middle East & Africa. North America led the market in total fleet deployment, with more than 5.8 million active rental vehicles in circulation as of Q4 2023. The European market maintained leadership in EV rental integration, with 34% of all rental bookings in Norway and 27% in Germany involving electric or hybrid models. Asia-Pacific demonstrated rapid urban rental growth, especially in India, Thailand, and Indonesia, with a combined 48% rise in city rental bookings during 2023. The Middle East & Africa market showed increasing preference for short-term rentals, particularly in the UAE and South Africa, where tourism traffic and urbanization drove demand. Technological trends are analyzed in depth, with emphasis on automation, mobile app integration, vehicle telematics, contactless rentals, and fleet tracking solutions. Over 70% of bookings globally were initiated via mobile platforms in 2023–2024, and over 180 rental firms adopted vehicle IoT for better fleet control and user experience. The report also evaluates how predictive analytics and AI-based pricing algorithms enhanced yield optimization, with firms noting an average 11% improvement in vehicle utilization rates. Policy shifts, fleet electrification programs, and urban transport reforms are assessed to illustrate external drivers shaping the vehicle rental landscape. In 2023, more than 45 countries implemented regulatory incentives supporting rental electrification and digital vehicle identity systems. These developments are included in the report’s scope, supported by hard numeric data and cross-market comparisons. Finally, the report outlines the strategic positions of key companies, emerging players, and partnership models that influenced competition. It includes data from over 60 countries, capturing over 150 rental brands, and covers all levels of service—from budget rentals to luxury chauffeur-driven options. The coverage ensures readers gain a holistic view of ongoing changes, future opportunities, and operational benchmarks shaping the global vehicle rental ecosystem.

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