Car Leasing Market Size - By Vehicle Type (Hatchback, Sedan, SUV, Crossover), By Lease Type (Open-ended, Close-ended), By Propulsion (ICE, Electric), By End Use (Commercial, Individual) & Forecast, 2024 - 2032

Car Leasing Market Size

Car Leasing Market size was valued at USD 107.8 billion in 2023 and is anticipated to register a CAGR of over 5% between 2024 and 2032. The market experiences a trend with the rising demand for electric vehicles (EV). As environmental concerns grow and governments incentivize clean energy adoption, consumers increasingly opt for EV leases. This trend reflects a shift towards sustainable transportation solutions and underscores the evolving preferences in the leasing sector.
 

For instance, in December 2023, France initiated a novel "social leasing" initiative enabling low-income individuals to lease electric vehicles for as little as 43 USD. This program aims to enhance EV accessibility, offering no down payment and six months of complimentary charging. This initiative is expected to bolster the car leasing market by increasing demand for electric vehicle leases among low-income drivers.

The partnership between automakers and leasing firms is fueling growth in the car leasing sector by presenting enticing lease offers, thereby enhancing the accessibility of their vehicles. This collaboration enables automakers to expand their market presence, showcase their newest models, and adapt to evolving consumer tastes. For instance, in February 2024, Arval, a leading provider of vehicle leasing and mobility solutions, forged a strategic alliance with BYD (Build Your Dreams), a renowned electric vehicle manufacturer. This partnership, formalized through a Memorandum of Understanding (MoU), seeks to augment Arval's electric vehicle (EV) leasing offerings for corporate fleets and individual customers alike.
 

A significant downside in the car leasing market is the potential for additional fees and hidden costs, often undisclosed or overlooked during the leasing process. These fees may include excess wear and tear charges, disposition fees upon lease termination, and penalties for exceeding mileage limits. Consumers may face unexpected financial burdens, eroding the perceived affordability of leasing. Clear communication and transparency regarding all associated costs are essential to mitigate this pitfall and maintain trust between leasing companies and customers.
 

Car Leasing Market Trends

A market growth in the car leasing industry is the increasing demand for short-term and flexible leasing options. Consumers seek shorter lease terms and the ability to adjust their vehicle commitments based on evolving needs and preferences. This trend reflects a growing desire for convenience and adaptability in the leasing process. For instance, in February 2024, Toyota unveiled a subscription-based offering for its latest electric vehicle, the bZ4X, available in countries such as Japan and Australia. This service enables customers to lease the electric vehicle for a predetermined duration, typically three years, with all operational expenses included in a monthly fee. The subscription model seeks to alleviate concerns regarding electric vehicle depreciation while enhancing the affordability of electric car ownership.
 

Government incentives play a pivotal role in shaping the car leasing landscape, particularly in the promotion of eco-friendly vehicles. With an emphasis on reducing carbon emissions and combating climate change, many governments offer incentives such as tax credits, subsidies, and rebates for leasing electric and hybrid vehicles. These incentives not only lower the initial cost of acquiring such vehicles but also incentivize consumers to opt for more sustainable transportation options. Consequently, there is a noticeable increase in the adoption of electric and hybrid leases, driving the overall growth of the market while contributing to environmental conservation efforts.
 

Car Leasing Market Analysis

Based on vehicle type, the market is divided into hatchback, sedan, SUV, and crossover. The sedan segment accounted for around 30% market share in 2023. An observable shift in the car leasing landscape pertains to the evolving demand for sedans. Despite the increasing popularity of SUVs and crossovers, sedans are experiencing a resurgence in leasing preferences. This resurgence is driven by factors such as advancements in sedan design, improved fuel efficiency, and competitive leasing offers from manufacturers. Consumers are increasingly considering sedans for their practicality, comfort, and affordability, signaling a nuanced shift in leasing preferences within the automotive sector.
 

Based on propulsion, the car leasing market is categorized into ICE and electric. The ICE segment held around 73% market share in 2023, due to the widespread availability of ICE vehicles, established infrastructure for gasoline refueling, and the familiarity and reliability of conventional combustion engine technology among consumers. ICE vehicles often offer a broader selection of models, ranging from compact cars to SUVs, catering to diverse needs and preferences. Also, the reliability and familiarity of ICE technology contribute to consumer confidence, as many drivers are accustomed to the performance and maintenance requirements of traditional combustion engines.
 

North America held a dominant car leasing market with a revenue of USD 32.5 billion in 2023. In North America, there is surge in demand for flexible leasing options among non-luxury vehicle segments. Consumers prioritize affordability and practicality, opting for shorter lease terms and customizable plans. This trend reflects a shift towards accessibility and convenience in leasing choices across the region. For instance, In June 2023, Ford and Uber unveiled the Ford Drive program, a pilot project offering flexible leases on Mustang Mach-E models to Uber drivers in California. This initiative aligns with Uber's ambition to transition to a zero-emission platform across North America.
 

Car Leasing Market Share

ALD Automotive, BNP Paribas SA and Ford Motor Credit hold a significant market share of over 11% in the car leasing industry. ALD Automotive, a global leader in fleet management and vehicle leasing, leverages its extensive expertise and wide-ranging services to cater to both corporate and individual clients.
 

BNP Paribas SA, a prominent banking institution, has a strong foothold in the car leasing sector, offering tailored leasing solutions, and financing options to customers worldwide. Ford Motor Credit, the financial services arm of Ford Motor Company, plays a pivotal role in facilitating vehicle leasing for customers purchasing Ford vehicles, providing competitive rates and flexible terms.
 

Car Leasing Market Companies

Major companies operating in the car leasing industry are:

• ALD Automotive
• Ally Financial
• Avis Budget Group
• BNP Paribas SA
• Chase Auto Finance
• Deutsche Leasing AG
• Ford Motor Credit
   

Car Leasing Industry News

• In August 2023, Renault Group's Mobilize Financial Services acquired a 36.6% stake in UK-based Select Car Leasing, launching a new brand, Select Lease by Mobilize, in the UK fleet market. This partnership aims to broaden leasing offerings for both private and business customers, with a focus on multi-brand car and van solutions.
   
• In June 2023, SAIC's MG brand introduced a fresh electric vehicle (EV) leasing opportunity in France, allowing drivers to lease an EV for USD 107 per month. This initiative is a result of a collaboration with MG Motor's French banking partner, Credit Agricole Consumer Finance.
   

The car leasing market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue ($Bn) from 2021 to 2032, for the following segments:

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Market, By Vehicle Type

• Hatchback
  • ICE
  • Electric
• Sedan
  • ICE
  • Electric
• SUV
  • ICE
  • Electric
• Crossover
  • ICE
  • Electric

Market, By Lease Type

• Open-ended
• Close-ended

Market, By Propulsion

• ICE
• Electric

Market, By End Use

• Commercial
• Individual

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America
• MEA
  • UAE
  • South Africa
  • Saudi Arabia
  • Rest of MEA