Driving Growth: Car Rental Market Set for 2.6% CAGR, Reaching $105.7B by 2033

IMARC Group, a leading market research company, has recently released a report titled "Car Rental Market Size, Share, Trends and Forecast by Booking Type, Rental Length, Vehicle Type, Application, End User, and Region, 2025-2033". The study provides a detailed analysis of the industry, including the global car rental market share, trends, size, and industry trends forecast. The report also includes competitor and regional analysis and highlights the latest advancements in the market.

Report Highlights:

How Big Is the Car Rental Market?

The global car rental market size reached USD 83.9 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 105.7 Billion by 2033, exhibiting a growth rate CAGR of 2.6% during 2025-2033. North America currently dominates the market, holding a car rental market share of over 37.8% in 2024. 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.

Market Key Highlights:

Market Growth: The car rental market is experiencing steady growth, driven by rising travel demand, urban mobility trends, and tourism recovery.
Target Demographics: Widely used by business travelers, tourists, urban commuters, and customers seeking temporary vehicle solutions.
Service Variety: Offers short-term, long-term, luxury, airport, and peer-to-peer rental options to suit various customer needs.

Technology Trends: Integration of digital booking platforms, GPS tracking, and contactless rentals is enhancing user convenience and service efficiency.
Distribution Channels: Services are delivered through airport counters, local rental agencies, mobile apps, and online booking platforms.

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The Future of Car Rentals: Key Trends

Technology will be crucial in improving the customer experience. Digital platforms are making the rental process smoother with features like mobile booking, contactless check-ins, real-time vehicle tracking, and personalized service. Simultaneously, sustainability is a major priority. Rental companies are adding more electric and hybrid vehicles to their fleets to align with eco-friendly values and regulations.

Subscription-based rental models are also gaining traction, offering flexible alternatives to traditional car ownership. These models are especially popular with urban consumers and younger generations who value access and convenience over owning a vehicle long-term.

As the market continues to evolve, rental companies that embrace innovation, digital transformation, and environmentally responsible practices will be best positioned for success. The outlook for the car rental market is positive, with strong growth potential for businesses that are adaptable and customer-focused.

Market Dynamics

Shift Toward Sustainable Mobility Solutions

Environmental awareness is fundamentally changing the car rental market, leading to a higher demand for low-emission transportation. Rental companies are increasingly incorporating electric and hybrid vehicles into their fleets to meet consumer expectations and global sustainability goals. By 2025, sustainability is expected to be a key competitive advantage in the industry, influencing both customer choices and regulatory compliance.

To support this shift, companies are investing in EV infrastructure, such as charging stations at rental locations, and partnering with electric vehicle manufacturers. Some are also collaborating with local governments to promote the adoption of clean-energy vehicles. As travelers become more mindful of their environmental impact, they are actively seeking greener rental options. This trend is pushing providers to rethink their fleet strategies and develop environmentally responsible offerings that align with both consumer demand and environmental regulations.

Rise of Technology-Driven Services

Digital transformation is at the heart of the car rental industry's evolution. Customers now expect seamless, on-demand service experiences that rival the convenience of ride-sharing platforms. Mobile apps, AI-powered platforms, and cloud-based solutions are making booking, managing, and modifying rentals more efficient and user-friendly. By 2025, advanced digital capabilities are expected to dominate the market, creating highly personalized and frictionless rental experiences.

Technologies like AI, machine learning, and data analytics are enabling companies to predict demand, optimize pricing, and tailor services to individual user preferences. Features such as digital identity verification, contactless vehicle access, and automated customer support are quickly becoming industry standards. Rental firms that leverage these tools will benefit from increased customer loyalty, streamlined operations, and enhanced competitive advantage. As customer expectations continue to evolve, embracing smart technologies will be essential for sustained market leadership.

Growth of Subscription-Based Rental Models

The traditional concept of car rentals is expanding with the rise of subscription-based models. These services offer a flexible, all-inclusive alternative to ownership, appealing particularly to urban dwellers and younger consumers who prioritize mobility over possession. By 2025, subscription-based rentals are expected to account for a growing share of the market, reflecting broader shifts in consumer behavior and lifestyle.

Under these models, customers pay a recurring monthly fee for access to a vehicle, often bundled with services such as maintenance, insurance, and roadside assistance. This not only simplifies vehicle use but also reduces the administrative burden associated with car ownership. Rental companies are increasingly adopting tiered subscription plans to cater to different user needs-from daily commuters to occasional drivers. The growing popularity of these models reflects a broader cultural movement toward flexibility and convenience, marking a key transformation in how consumers approach personal mobility.

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Car Rental Market Report Segmentation:

By Booking Type:

• Offline Booking
• Online Booking

Family travelers dominate the market, as they typically opt for comprehensive travel insurance that covers multiple members and a wide range of potential risks during their trips.

By Rental Length:

• Short Term
• Long Term

The short-term segment held the largest market share, driven by strong demand for car rentals for business travel, weekend trips, and other short-duration needs.

By Vehicle Type:

• Luxury
• Executive
• Economy
• SUVs
• Others

Luxury emerged as the leading segment, driven by the preference of high-income individuals and travelers for premium vehicles that offer superior comfort, status, and a more refined travel experience.

By Application:

• Leisure/Tourism
• Business

The leisure and tourism segment holds the largest market share, driven by the high number of tourists and vacationers who prefer renting cars for convenient and flexible travel.

By End User:

• Self-Driven
• Chauffeur-Driven

The self-driven segment held the largest market share due to its enhanced flexibility, privacy, and control over travel schedules, making it a preferred choice for both leisure and business travelers.

Regional Insights:

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East and Africa

North America leads the market due to its robust tourism sector, high levels of disposable income, and well-established transportation infrastructure that facilitates car rental services.

Competitive Landscape with Key Players:

The competitive landscape of the car rental market size has been studied in the report with the detailed profiles of the key players operating in the market.

Some of These Key Players Include:

• Avis Budget Group, Inc.
• Carzonrent India Private Limited
• Eco rent a car
• Enterprise Holdings, Inc.
• Enterprise Rent-A-Car
• Europcar
• Localiza
• Sixt SE
• The Hertz Corporation

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Key Highlights of the Report:

• Market Performance (2019-2024)
• Market Outlook (2025-2033)
• Market Trends
• Market Drivers and Success Factors
• Impact of COVID-19
• Value Chain Analysis

If you need specific information that is not currently within the scope of the report, we will provide it to you as a part of the customization.

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IMARC Group is a leading market research company that offers management strategy and market research worldwide. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses.

IMARC's information products include major market, scientific, economic and technological developments for business leaders in pharmaceutical, industrial, and high technology organizations. Market forecasts and industry analysis for biotechnology, advanced materials, pharmaceuticals, food and beverage, travel and tourism, nanotechnology and novel processing methods are at the top of the company's expertise.

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This release was published on openPR.