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

The international tourism boom has a positive effect on the car rental business as the tourists look for reliable means of transportation. The number of international arrivals in the year 2023 was around 89% of the level recorded before the COVID-19 pandemic. The recovery was excellent, as by September 2024 the figures got to 98%. The international travel market made approximately USD 1.8 trillion in 2023, which was very close to the pre-pandemic levels. Travelling by rental cars not only gives tourists more liberty but also enables them to visit places where public transport does not reach.

The urbanization process continuous at global scale, so the need for more flexible means of car transport such as the car rental services keeps growing. More than half of the world population lives in urban areas. By 2050, this figure will almost reach 70%. In cities, short-term on-demand transportation gets rid of all the associated logistics and costs of owning a car. Urbanization, particularly in places where there is already significant congestion and imbalance between parking supply and demand, has resulted in a higher demand for short period transportation rental.

Digitalization has brought about efficiency in the process of renting a car in different ways; GPS, online booking, mobile applications, and websites. The internet users worldwide in 2023 were 5.52 billion. In 2024, 151 million new users were added, which indicates the very rapid growth of digitalization globally. Data analytics are used to optimize the fleet, set prices, and offer better customer services. The steady growth of the industry is also supported by the changes in technology that lead to changing consumer needs.

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 worldwide is expected to be in 2025. It will have a 37.8% market share. The main factors behind the market are tourism, business travel, and good infrastructure. The United States generates 85% of the total global revenue.

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

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