Press release
How Is the Car Rental Market Driven by the Rising Demand for Cost-Effective Mobility and Ongoing Tech Advancements?
Driven by the escalating need for cost-effective and short-term mobility options.
The global car rental market reached a size of USD 86.1 Billion in 2025 and is forecasted to expand to USD 107.2 Billion by 2034. This represents a compound annual growth rate (CAGR) of 2.50% during the forecast period from 2026 to 2034. Growth is driven by rising tourism, urbanization, and demand for cost-effective, flexible mobility options, with technological advancements like digital platforms playing a key role.
Study Assumption Years
• Base Year: 2025
• Historical Year/Period: 2020-2025
• Forecast Year/Period: 2026-2034
Car Rental Market Key Takeaways
• Current Market Size: USD 86.1 Billion in 2025
• CAGR: 2.50% during 2026-2034
• Forecast Period: 2026-2034
• North America dominated the market with over 37.8% share in 2025.
• The market is propelled by growing tourism, increasing urbanization, and a rising middle-class population.
• Technological progress, including online booking and smart technologies, enhances customer experience and operational efficiencies.
• The United States drives much of North America's market with 85% share and increased adoption of electric vehicles.
• Luxury vehicle rentals lead by vehicle type, and online booking is the leading booking type segment.
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Market Growth Factors
International tourism spurs growth for the car rental industry since tourists want flexible transport options. International arrivals in 2023 reached about 89% of pre-COVID levels. They had recovered to 98% by September 2024. The international travel market created about USD 1.8 trillion in 2023, near levels from before the pandemic. Rental cars allow tourists to increase independence and to travel with flexibility to areas not easily accessed via public transportation.
As the world urbanizes, flexible means of car transport such as car rental services grow more needed. Over half the world population live in urban areas. This will increase to nearly 70% by 2050. In urban areas, short-term on-demand transportation eliminates the need for the associated logistics and costs of car ownership. Urbanization, especially in areas already experiencing meaningful congestion and an imbalance between parking supply and demand, has created demand for short-term transportation rental.
Digitalization improved efficiency in renting a car through GPS, with online booking, through mobile applications, and via websites. In 2023, 5.52 billion people were using the internet worldwide during 2024, with 151 million new internet users showing the global rapid growth of digitalization. Data analytics benefit fleet optimization, pricing, and customer services. Consumer needs driven by changing technology also support steady industry growth.
Market Segmentation
Booking Type:
• Offline Booking: Traditional booking channels, serving customers without digital access.
• Online Booking: Dominates market with around 74.5% share in 2025, offering instant reservations via websites and apps, providing convenience, transparency, and flexible payment options.
Rental Length:
• Short Term: Leading segment with approximately 73.9% share in 2025, favored for its flexibility and affordability, catering to spontaneous and urban users.
• Long Term: Extended rentals typically for longer durations, less dominant than short-term counterparts.
Vehicle Type:
• Luxury: Largest and premium segment, attractive for affluent customers seeking comfort and advanced features.
• Executive: Mid to high-end vehicles catering to business and professional clients.
• Economy: Cost-efficient vehicles popular among budget-conscious users.
• SUVs: Sport utility vehicles serving varied customer preferences.
• Others: Includes other vehicle categories not explicitly defined.
Application:
• Leisure/Tourism: Largest and most vibrant segment, supporting vacation and leisure travelers prioritizing convenience.
• Business: Serving corporate clients needing reliable transport solutions.
End User:
• Self-Driven: Dominant segment, catering to independent travelers preferring freedom and control.
• Chauffeur-Driven: Rentals with drivers for clients seeking comfort and convenience.
Regional Insights
North America has the largest car rental market worldwide in 2025. It holds a 37.8% share. Tourism, business travel, and its well-developed infrastructure serve as the main drivers in this market. The US accounts for 85% of global revenue in total. Digital innovations in addition to hybrid and electric-vehicle uptake and demand for on-demand mobility solutions propel growth. Regional dominance reflects strong economic activity through travel.
Recent Developments & News
• October 2024: Enterprise Mobility began renting from Flex-E-Rent a customizable truck rental service, supplemented the fleet by using electric vehicles, and improved customers via AI and connected car technology.
• Uber Rent launched in Australia during July 2024. This enables users to rent a car through its app. Users can take a road trip or make an airport transfer.
• In June 2024 Turo added more than 70 updates including Limitless Search and Turo Host Services to improve the car sharing experience.
• In June 2024, Zoomcar partnered with Air India Express, offering self-drive rentals at 19 airports throughout India.
• March 2024: Eco Mobility expanded into ten more cities in India, and it moved people in budget-friendly and eco-friendly ways.
• IndusGo raised USD 11.75 million in March 2023 toward fleet size increase and toward technology.
• Avis Budget Group and SK Group opened electric vehicle charging stations at Houston Airport in January 2023.
• In January 2023 Hertz announced it would supply 25,000 EVs to Uber drivers in Europe before 2025.
Key Players
• 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
Customization Note
If you require any specific information that is not covered currently within the scope of the report, we will provide the same as part of the customization.
Ask Our Expert & Browse Full Report with TOC & List of Figures: https://www.imarcgroup.com/request?type=report&id=2036&flag=E
Contact Us
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Email: sales@imarcgroup.com,
Tel No: (D) +91 120 433 0800,
United States: +1-201971-6302
About Us
IMARC Group is a global management consulting firm that helps the world's most ambitious changemakers to create a lasting impact. The company provide a comprehensive suite of market entry and expansion services. IMARC offerings include thorough market assessment, feasibility studies, company incorporation assistance, factory setup support, regulatory approvals and licensing navigation, branding, marketing and sales strategies, competitive landscape and benchmarking analyses, pricing and cost research, and procurement research.
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