Car Rental Market size to cross USD 247.4 Billion by 2034

The global car rental market was estimated at USD 141.6 billion in 2024 and is expected to grow from USD 149.3 billion in 2025 to USD 247.4 billion by 2034, at a CAGR of 6.5%, according to the latest report published by Global Market Insights Inc.  

The steady growth in domestic and international travel is a significant driver of the car rental market. As more people explore new destinations for leisure or business, the need for flexible and convenient transportation solutions rises. Rental cars offer travelers the freedom to explore at their own pace without relying on public transit schedules or costly taxis.  

Key Insights:

Market Size & Growth:

• 2024 Market Size: USD 141.6 billion
• 2025 Market Size: USD 149.3 billion
• 2034 Forecast Market Size: USD 247.4 billion
• CAGR (2025–2034): 6.5%  

Regional Insights:

• Largest Market: North America
• Fastest Growing Market: Asia Pacific
• Emerging Countries: Poland, Romania, India, Indonesia, UAE, and Brazil  

Key Growth Drivers:

1. Growing preference for convenience and flexibility: Consumers favor car rentals for short-term use, offering flexibility without the commitments of ownership, especially in urban areas.  
2. Expansion of business travel: The growth in corporate travel increases demand for rental cars, as businesses often prefer rental services for employee mobility.  
3. Technological advancements and mobile booking: Online platforms and mobile apps simplify the booking process, making car rentals more accessible and appealing to tech-savvy customers.  
4. Urbanization and rising population in metropolitan areas: Limited parking and traffic congestion encourage people to rent cars rather than own them in crowded cities.  
5. Emergence of electric vehicle rentals: The increasing availability of electric vehicles in rental fleets caters to eco-conscious consumers and supports sustainability initiatives.  

Key Players:

• Enterprise Holdings led the market with over 22% share in 2024.  
• Some of the top players in this market include Sixt, Hertz, Enterprise Holdings, Localiza, Avis Budget Group, which together held a 40% share in 2024.  

Key Challenges:

1. High operational and maintenance costs: Managing a large fleet involves significant expenses for vehicle maintenance, repairs, and depreciation, which can impact profitability.  
2. Intense competition and price wars: The car rental industry is highly competitive, leading to aggressive pricing strategies that often reduce profit margins for companies.  
3. Regulatory and compliance issues: Navigating diverse regulations related to vehicle safety, emissions, and insurance across different regions complicates operations and increases costs.  
4. Impact of ride-sharing services: The growing popularity of ride-sharing platforms like Uber and Lyft offers convenient alternatives, challenging traditional car rental businesses.  
5. Seasonal demand fluctuations: Demand for rental vehicles can be highly seasonal, with peak travel periods followed by slow seasons, creating challenges in fleet management.  

Browse key industry insights spread across 230 pages with 170 market data tables and figures from the report, “Car Rental Market Size - By Booking, By Rental Length, By Vehicle, By Application, By End Use, Growth Forecast, 2025 - 2034” in detail, along with the table of contents:

https://www.gminsights.com/industry-analysis/car-rental-market  

Rising Demand in the Online Segment

The online segment held a notable share in 2024, driven by offering customers seamless, convenient booking experiences through websites and mobile apps. This segment benefits from rising internet penetration and smartphone usage, allowing users to compare prices, select vehicles, and manage reservations in real time. Companies are investing heavily in digital platforms to enhance user interface, integrate AI-driven personalization, and provide instant customer support.  

Increasing Prevalence of Short-Term Rentals

The car rental market from short-term car rental segment generated significant revenues in 2024, backed by travelers and urban customers seeking flexible, short-duration vehicle use without the burden of ownership. This segment’s growth, driven by increasing tourism and business travel, is supported by rising consumer preference for convenience and affordability. Rentals spanning from a few hours to several days allow users to meet immediate transportation needs efficiently. Market players focus on offering competitive pricing, diverse fleet options, and quick vehicle access to capture this segment.  

Increasing Adoption of Luxury Cars

The luxury car rental segment held a sizeable share in 2024, propelled by growing disposable incomes and rising demand for premium experiences among affluent consumers. Luxury rentals offer advanced features, superior comfort, and brand prestige, attracting customers who prioritize status and exclusivity. Rental companies are strengthening their market foothold by partnering with luxury car manufacturers, offering personalized services, and leveraging digital platforms for targeted marketing to upscale clientele.  

North America to Emerge as a Lucrative Region

North America car rental market will witness robust growth through 2034, driven by a combination of rising domestic travel, expanding business sectors, and technological innovation. Companies are leveraging data analytics and mobile technology to enhance customer experience, optimize fleet management, and introduce contactless rentals. Strategic collaborations with ride-sharing platforms and the introduction of electric vehicles in rental fleets are further strengthening market positions.  

Major players in the market are Movida, Advantage Rent-a-car, Uber, Sixt, Europcar, CAR Inc., Hertz, Localiza, Avis Budget Group, and Enterprise Holdings.  

Companies operating in the car rental market are implementing a range of strategic initiatives to strengthen their market position and meet evolving customer expectations. A major focus is on digital transformation, with investments in mobile apps, online booking platforms, and AI-powered customer service tools to enhance convenience and streamline the rental experience. Many firms are expanding their vehicle fleets, offering a wider variety of options—from economy to luxury and electric vehicles—to cater to different customer segments.