Car Rental Market

The global car rental market size reached USD 86.1 Billion in 2025. Looking forward, IMARC Group expects the market to reach USD 107.2 Billion by 2034, exhibiting a growth rate CAGR of 2.50% during 2026-2034. North America currently dominates the market, holding a car rental market share of over 37.8% in 2025. The market is experiencing steady growth driven by the escalating need for cost-effective and short-term mobility options, the expanding middle class, and continuous technological advancements, particularly the integration of smart technologies and online platforms.

Car Rental Market Analysis:

• Major Market Drivers: The car rental market is dominated by global tourism growth, urbanization, and the demand for more flexible transportation. Increased business travel, advances in mobile booking technology, and consumers' affinity for convenient and affordable mobility solutions are amongst the major drivers for substantial growth in both developed as well as emerging markets globally.
• Key Market Trends: Present trends in the car rental market are the use of digital booking platforms, inclusion with ridesharing, and offering electric and hybrid cars. Subscription rentals, contactless rental, and bespoke services are picking up popularity, whereas sustainability and eco-friendly mobility solutions are increasingly shaping consumer choices worldwide.
• Competitive Landscape: The market competition of the car rental market is characterized by high levels of rivalry between established players. Strategic mergers, acquisitions, alliances, and expansion into different regions are prevalent. Fleet diversification, adoption of advanced technology, and upgraded customer experience are strategies being employed by companies to remain competitive and consolidate market share across domestic and international markets.
• Challenges and Opportunities: Threats to the car rental market are posed by fuel price volatility, high regulatory compliance, and maintenance of vehicles. Opportunities present themselves through growth in corporate rentals, growing demand for environmentally friendly mobility solutions, emerging markets growth, and advancements in technology like AI-based fleet management and smooth digital interfaces, improving operational efficiency as well as customer satisfaction.

The global car rental market demand is driven by expanding tourism, increasing urbanization, and rising demand for flexible mobility solutions. Digital transformation, including advanced booking platforms and mobile applications, enhances convenience and boosts market adoption. Corporate travel and the need for short-term vehicle access further support growth. In addition, the adoption of eco-friendly vehicles supports sustainability trends, appealing to consumers who are environmentally conscious. In addition, cost-effective alternatives to vehicle ownership, particularly in urban centers, are fueling market expansion. Moreover, strategic partnerships and innovations in fleet management systems enable service providers to meet diverse customer demands, reinforcing the market’s steady growth trajectory worldwide.

The United States is a leading market in the global car rental industry, driven by strong domestic and international tourism, robust urban mobility demand, and a well-developed travel infrastructure. The presence of established rental companies, coupled with widespread adoption of digital platforms, enhances customer convenience. In addition, business travel, combined with growing preference for on-demand services, contributes significantly to the car rental market growth. Furthermore, the rise of eco-friendly vehicles in rental fleets aligns with consumer demand for sustainable options. With consistent innovation and strategic expansions, the United States maintains its position as a key player in the global car rental market. For instance, in July 2024, SIXT USA proliferated its rental services foothold in Texas by launching its new car rental facility at William P. Hobby Airport.

Car Rental Market Trends:

Increasing Urbanization and Mobility Needs

As urbanization continues to rise globally, the demand for convenient and flexible transportation solutions, such as car rentals, is witnessing a significant rise. According to World Bank estimates, more than half of the world's population already resides in cities, and by 2050, that number is predicted to increase to about 70%. The shift towards city living is leading to changing mobility patterns, with more consumers opting for on-demand and short-term transportation options. They cater to the evolving needs of urban dwellers who seek efficient and cost-effective mobility without the long-term commitments associated with vehicle ownership. This trend is particularly pronounced in densely populated areas where owning a car may be impractical due to limited parking, traffic congestion, and environmental considerations. Moreover, the ease of access to rental services, coupled with the ability to choose from a diverse fleet, aligns with the preferences of a mobile and dynamic urban population.

Technological Advancements and Digitalization

The global market has been significantly influenced by technological advancements and the widespread adoption of digital platforms. Industry studies indicate that there are currently 5.52 billion internet users worldwide. Between October 2023 and October 2024, there were 151 million more internet users worldwide, demonstrating strong digitalization prospects. The integration of smart technologies, such as GPS navigation, mobile applications, and online reservation systems, is streamlining the rental process, enhancing user experience and operational efficiency. These innovations simplified the booking and payment processes and enabled real-time tracking, ensuring a seamless rental experience. Additionally, the use of data analytics has allowed rental companies to optimize their fleets, pricing models, and customer services, contributing to overall industry growth. Furthermore, the increasing connectivity and digitalization of services play a pivotal role in expanding the car rental market forecast and meeting the evolving expectations of tech-savvy consumers.

Rising Tourism and Global Travel Trends

The expanding tourism industry and a growing trend of global travel have become key drivers for the market. With an increasing number of people exploring diverse destinations, there is a rising demand for temporary transportation solutions to facilitate convenient and independent travel experiences. In 2023, international visitor arrivals were 89% of pre-pandemic levels, and from January to September 2024, they were 98%, according to data from the United Nations Tourism Agency. According to updated data for 2023, export earnings from foreign travel reached USD 1.8 Trillion, which is essentially the same as it was prior to the pandemic (down 1% in real terms from 2019). Car rentals provide tourists with the flexibility to explore destinations at their own pace, reaching places that may be inaccessible through public transportation. Moreover, the growing popularity of international travel and the rise of the sharing economy are contributing to the globalization of these rental services. Furthermore, the ability to rent a vehicle easily in various locations worldwide is making these rentals an integral part of the travel ecosystem, further fueling the growth of the market.

Car Rental Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global car rental market, along with forecast at the global, regional, and country levels from 2026-2034. The market has been categorized based on booking type, rental length, vehicle type, application, and end-user.

Analysis by Booking Type:

• Offline Booking
• Online Booking

Online booking leads the car rental market share with around 74.5% in 2025, emerging as the largest and most influential segment. The widespread adoption of digital technologies and increasing internet penetration have revolutionized how consumers access car rental services. Online platforms, including websites and mobile applications, offer unmatched convenience, enabling customers to compare prices, explore various vehicle options, and make reservations instantly from any location. In addition, these platforms provide flexibility, often featuring user-friendly interfaces, secure payment methods, and real-time availability updates, which enhance customer experience. Furthermore, the convenience, accessibility, and transparency provided by online booking platforms have solidified their dominance, making them the preferred choice for a majority of customers seeking hassle-free and efficient rental services.

Analysis by Rental Length:

• Short Term
• Long Term

Short term leads the market with around 73.9% of market share in 2025, making it the most dynamic and widely utilized segment. This category caters to urban dwellers, tourists, and business travelers who require flexible transportation solutions for durations ranging from a few hours to a few days. Furthermore, its popularity stems from the growing demand for on-demand, affordable alternatives to vehicle ownership, especially in densely populated urban areas. Short-term rentals also attract customers planning spontaneous trips or fulfilling specific needs, such as business meetings or weekend excursions. In addition, the availability of diverse vehicle options, combined with straightforward booking processes, enhances its appeal. Moreover, the flexibility, convenience, and cost-effectiveness offered by short-term rentals ensure their sustained growth and market leadership.

Analysis by Vehicle Type:

• Luxury
• Executive
• Economy
• SUVs
• Others

Luxury leads the market by vehicle type, firmly establishing itself as the largest and most premium segment in the global car rental industry. This category is designed to cater to a niche clientele seeking exceptional comfort, refined style, and top-tier performance. Moreover, luxury rentals attract affluent tourists, business executives, and individuals celebrating milestone occasions who are willing to invest in an elevated travel experience. In addition, high-end brands dominate this segment by offering vehicles equipped with state-of-the-art features, elegant interiors, and cutting-edge technology. These vehicles symbolize prestige and sophistication, while also serving as a mode of transportation. Furthermore, the rising demand for premium travel options and exclusive driving experiences, coupled with growing disposable incomes, continues to reinforce the luxury car rental market’s dominance in the industry.

Analysis by Application:

• Leisure/Tourism
• Business

Leisure/tourism leads by application segment, serving as the largest and most vibrant segment. This category caters to a diverse customer base, including vacationers, explorers, and leisure travelers, who increasingly are prioritizing convenience and flexibility during their trips. Whether for family vacations, weekend getaways, or solo adventures, the segment offers a wide range of vehicles tailored to various group sizes and preferences. In addition, its significant growth is primarily fueled by rising global tourism, enhanced travel infrastructure, and the increasing popularity of road trips. Moreover, by providing seamless booking experiences and versatile vehicle options, the leisure/tourism rental segment has become an integral part of the global car rental market.

Analysis by End User:

• Self-Driven
• Chauffeur-Driven

Self-driven has emerged as the dominant end user segment for the global car rental market, reflecting the growing global trend toward autonomy and individualized travel experiences. This segment mainly caters to independent travelers, local customers, and tourists who value freedom, flexibility, and control over their itineraries. In addition, self-driven rentals provide an empowering travel option, allowing users to explore destinations at their own pace without any reliance on chauffeurs or public transportation. Moreover, the extensive availability of diverse vehicle options and straightforward booking processes significantly enhances its appeal. Furthermore, the segment heavily benefits from increasing consumer preference for personalized travel solutions, making self-driven rentals a key driver of growth in the global car rental market.

Regional Analysis:

• North America
• United States
• Canada
• Europe
• Germany
• France
• United Kingdom
• Italy
• Spain
• Russia
• Others
• Asia Pacific
• China
• Japan
• India
• South Korea
• Australia
• Indonesia
• Others
• Latin America
• Brazil
• Mexico
• Others
• Middle East and Africa

In 2025, North America accounted for the largest market share of over 37.8%. This dominant regional market is typically driven by escalating requirement from both corporate and leisure travelers. The region's robustly established tourism segment, combined with comprehensive airport infrastructure and road networks, fosters steady growth. For instance, as per industry reports, in May 2024, U.S. residents made 2.1 million visits to Canada, while travelers from overseas countries accounted for 615,600 trips, highlighting robust cross-border and international tourism activity. Moreover, key players in the industry utilize innovative technologies, including fleet management systems and digital booking platforms, to improve both operational efficacy and consumer experience. In addition, the magnifying utilization of hybrid as well as electric vehicles in rental fleets highlights magnifying user shift towards sustainable options. Furthermore, the United States substantially aids regional leadership, with an elevating shift towards on-demand mobility solutions and a robust presence of market leaders. Stable business travel and beneficial economic ecosystem also fortify North America’s domination in the global car rental industry.

Key Regional Takeaways:

United States Car Rental Market Analysis

In 2025, United States accounted for 85.00% of the market share in North America. High levels of urbanization, a strong travel industry, and the growing gig economy are the key drivers of the US car rental business. In 2023, 66.5 million international visitors visited the United States, and many of them needed a rental car to get around, according to the National Travel and Tourism Office (NTTO). Over 85% of domestic travelers make a road trip at least once every year, so car rentals are a very significant market segment for business and leisure travel. Customer adoption has increased due to the simplification of the rental procedure brought about by the growth of on-demand services and app-based reservations. About half of all automobiles rental income comes from airport rentals, which are driven by both business and pleasure travel. The market has been further stimulated by the growing use of electric cars (EVs) in rental fleets, which is being driven by government incentives and environmental consciousness.

Companies like Hertz and Enterprise have increased the range of EVs they provide. According to an American Car Rental Association spokesperson, EVs currently account for about 3% of all rental car fleets in the United States as of 2024. Additionally, subscription-based rental models and corporate partnerships with ride-hailing companies are transforming consumer experiences and market dynamics.

Europe Car Rental Market Analysis

More mobility in metropolitan regions and tourism are fueling the European car rental industry. According to an industrial report, more than 500 million tourists visited Europe in 2023, and car rentals played a big part in meeting their travel demands, especially in nations like Spain, Italy, and France. The rise of low-cost airlines, which makes it easier for travelers inside Europe to rent a vehicle for a brief period of time, is another factor driving demand. Business travelers are a substantial source of revenue, particularly in Germany and the UK. Since hybrid and electric vehicles comprise less than 20% of all vehicles within the leading rental companies, environmental constraints are compelling companies to incorporate EVs in their fleets. Apart from promoting short-term rentals and car-sharing services, urban congestion regulations and car-free zones in cities have also expanded market drivers.

Asia Pacific Car Rental Market Analysis

The Asia-Pacific car rental market trends are growing at a rapid pace, given factors such as urbanization, tourism, and rising disposable income. Middle classes expanding and domestic travels increasing has China and India holding onto around more than 50% of the regional market, as per industry reports. Luxury car rentals are also growing in the region. An unprecedented rise of 40% reservations has been seen by a luxury automobile rental business like Luxorides on busy circuits like Delhi-Rishikesh, Delhi-Vrindavan, Chandigarh-Manali etc. The growth is also owing to foreign and NRI tourists seeking ultra-luxury travel experiences. The demand is increasing at rates of 35% and 40% in Mumbai and Delhi, respectively, followed by 40% in Bangalore, 10% in Pune, and 14% in Udaipur, as per industry news articles. Customer experience is revolutionized by services such as ride-hailing with Grab and Ola that incorporate automobile rental alternatives. Furthermore, international traveling to Thailand, Australia, and Japan has increased demand for airport automobile rentals. Implementations of technology in this region enhance efficiency of services, particularly in the use of digital payment methods and AI-based booking systems. Regional partnerships in tourism promotion are also expected to boost rental volumes in under-served markets.

Latin America Car Rental Market Analysis

Domestic and international travel are driving the car rental market outlook in Latin America. Brazil and Mexico are the largest markets in the region, accounting for more than 50% of total sales, due to their thriving tourism industries and growing middle classes. Airport rentals are an important source of income for foreign tourists. According to industry statistics, Brazil's tourism industry has already surpassed its 2023 total of 5.908 Million foreign tourists by November 2024, reaching 5.967 Million. Furthermore, the demand for car rentals has increased because of the rise in eco-tourism and self-driving vacations in countries such as Chile and Costa Rica. Customer accessibility is being improved through online booking platforms and competitive pricing among major players, which is driving industry expansion.

Middle East and Africa Car Rental Market Analysis

Business and pleasure travel are driving the rise of the car rental sector in the Middle East and Africa. Qatar's tourism business has emerged at the top in the region, as per UN Tourism, which has witnessed 147% growth in tourists during the first half of 2024 compared with the pre-pandemic period. Dubai in the United Arab Emirates has recorded a rise of 11.4% in foreign tourists during the first half of 2024 compared to the previous pre-pandemic records, while Saudi Arabia has been witnessing tremendous growth through a 73% tourism increase, motivated by its visionary Vision 2030. Similarly, the thriving safari and ecotourism sectors increase demand for automobile rentals in South Africa. The popularity of ride-hailing services that have the option to rent and an increasing expatriate population are some other key drivers.

Competitive Landscape:

The key players in the market are strategically adapting to evolving consumer preferences and technological advancements. These companies are investing significantly in digitalization, enhancing their online platforms and mobile applications to streamline the booking process and improve customer experience. Additionally, the integration of smart technologies, such as GPS navigation and data analytics, allows for better fleet management and operational efficiency. Many players are also expanding their vehicle fleets to include a diverse range of options, including electric and eco-friendly models, aligning with the growing demand for sustainable transportation. For instance, BLive, an India-based EVs rental startup that has operations spanning more than 25 cities in the nation, has sold around 3,000 EVs, integrated over 1,000 EVs into fleet services, and collaborated with around 60 companies to provide diverse options and enhance affordability in the electric vehicle market. Moreover, competitive pricing strategies, loyalty programs, and partnerships with other travel service providers remain focal points as companies seek to maintain and expand their car rental market share in a dynamic and competitive industry.

The report provides a comprehensive analysis of the competitive landscape in the car rental market with detailed profiles of all major companies, including:

• Al-Futtaim Group
• Avis Budget Group, Inc.
• Bettercar Rental LLC
• Carzonrent India Pvt. Ltd.
• ECO Mobility
• Enterprise Holdings Inc. (The Crawford Group, Inc.)
• Europcar Mobility Group
• Fastrental India Private Limited
• Localiza
• Sixt SE
• The Hertz Corporation

Key Questions Answered in This Report

1.What is car rental?

2.How big is the car rental market?

3.What is the expected growth rate of the global car rental market during 2026-2034?

4.What are the key factors driving the global car rental market?

5.What is the leading segment of the global car rental market based on the booking type?

6.What is the leading segment of the global car rental market based on rental length?

7.What is the leading segment of the global car rental market based on vehicle type?

8.Which application had the largest market share in the car rental market?

9.What is the leading segment of the global car rental market based on end user?

10.What are the key regions in the global car rental market?

11.Who are the key players/companies in the global car rental market? Show more