Car Rental Market to Grow at a CAGR of 2.50% during 2026-2034 - Industry Analysis by IMARCGroup

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. The market is driven by growing demand for short-term mobility, the rising middle-class population, technology, and the growth of online booking applications. North America is the leading market segment with a 37.8% share by 2025.

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.

Request for a Free Sample Report: https://www.imarcgroup.com/car-rental-market/requestsample

Market Growth Factors

Contributing to the industry are global international tourism growth, urbanization and transport flexibility, as well as business travel. Two major drivers of growth in both the developed and developing car rental markets are the increasing prominence of mobile booking technology and the growing demand for budget and flexible transport. The booming tourism industry also creates a demand for cheap, temporary transport.

In 2025 74.5% of taxi journeys were booked via the internet, technology advances enabled GPS navigation, mobile applications, online booking and databases for managing bookings, managing a fleet of vehicles, setting price, and customer service. Around the world, the number of people using the internet is growing, with 5.52 billion people.

Urbanization drives demand for short term multimodal transport services. The share of population that is urban will increase to 70% by 2050 and this will increase rentals. Short term rentals are found to have the largest share of the market by 2025 (73.9 per cent). This is explained by finding them to be cheaper than car ownership, particularly in urban areas with high levels of traffic congestion and parking problems and high demand for lower emission and ridesharing vehicles.

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 held the largest segment of the rental car market in 2025 with over 37.8% of the overall market share. It is driven by the demand for business travel, established tourism industry, and a tendency towards green vehicle adoption in the region. The US accounts for 85% of the North American market. Demand drivers include urbanization, a large travel industry, and rising electrification, with electric vehicles comprising only 3% of the 2024 rental car fleet.

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 a part of the customization.

Request Customization: https://www.imarcgroup.com/request?type=report&id=2036&flag=E

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.

Contact Us

IMARC Group,

134 N 4th St. Brooklyn, NY 11249, USA,

Email: sales@imarcgroup.com,

Tel No: (D) +91 120 433 0800,

United States: +1-201971-6302