Car Rental Market Report 2026-2034 | Global Demand is Driven by Expanding Tourism

Market Overview

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

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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.

Market Growth Factors
It is good for the car rental business when there is a global boom in tourism, as tourists preparing for their trips will see that car rentals are a reliable mode of transportation. In 2023, the number of international arrivals was approximately 89% of the level that was recorded before the COVID, 19 pandemic. It was a huge recovery since by September 2024, the figures had reached 98%. The international travel market was worth around USD 1.8 trillion in 2023, which is very close to the pre, pandemic levels. Besides providing more freedom to tourists, traveling in a rental car also allows them to visit places where public transport does not go.

Worldwide urbanization is an ongoing process, and it is one of the reasons why the demand for more flexible car transportation methods, such as car rental services, is maintained at a high level. Currently, over half of the world's population lives in urban areas. The figure is expected to rise to nearly 70% by 2050. In large cities, short, term on, demand transportation eliminates all the logistics and expenses associated with car ownership. Especially in already heavily trafficked and parking supply and demand imbalanced areas, Urbanization, especially in places where there is already a lot of traffic and an imbalance between parking supply and demand, has led to an increased demand for short period transportation rental.

The process of renting a car has become more efficient through digital technologies which include GPS systems and online reservation systems and mobile apps and website platforms. The number of internet users worldwide in 2023 was 5.52 billion. The digitalization process throughout the world is advancing rapidly as shown by 151 million new users who joined in 2024. Businesses use data analytics to improve fleet management and establish pricing strategies and enhance their customer support operations. Technological changes which drive consumer demand modifications create steady industry growth according to the current market trends.

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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
The largest car rental market in North America is expected to reach its peak in 2025. The company will control 37.8% of the market. The market develops because of three elements which include tourism and business travel and excellent transportation infrastructure. The United States accounts for 85% of worldwide revenue which makes it the most important market.

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.
• 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.

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

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